Divided across Russia, the G20 focuses on food security and debt

A group of 20 finance chiefs began official meetings in Bali on Friday over progress on food security and debt problems, as tensions over Russia hampered prospects for a broader deal.

East Indonesia is urging G20 members to pledge more concrete measures to respond to food insecurity, including sharing data on commodity stocks, and better coordination of macroeconomic policies, according to a person familiar with the discussions.

Amid increasingly desperate moves by officials this week to stamp out inflation through off-cycle adjustments and jumbo interest rate hikes, finance ministers and central bank governors struggled to find areas of cooperation amid a growing list of risks to global economic stability.

The G20 talks have been “very difficult but sometimes fruitful,” Sri Mulyani Indrawati, Indonesia’s finance minister, said in his opening remarks for Friday’s meetings. “Despite all our different positions, we were able to make tangible progress on a few critical points.”

Indrawati cited “an alarming increase in food security risks” caused by the war in Ukraine and its aftermath on top of the pandemic problems. “The war and the rise in commodity prices could exacerbate global inflationary pressures and further increase social instability.”

US Treasury Secretary Janet Yellen on Friday once again directly admitted the blame for commodity price inflation and food security concerns on Russian officials, attributing them to “terrible consequences” and an “enduring human and economic toll.”

Russia’s destruction of farm facilities, theft of farm equipment and blockades of ports have amounted to using “food as a weapon of war,” Yellen said at an afternoon seminar on food security.

She and other officials, including Indrawati and Saudi Arabian Finance Minister Mohammed Abdullah Al-Jadaan, called on the G20 to take action to alleviate the crisis, particularly in low-income countries – and to propose solutions such as identifying and distributing scarce fertilizer stocks, to bring them down costs and to avoid associated inflation in staples like rice.

About 14 percent of the world’s food is lost between harvest and retail, and another 17 percent is wasted from retail to consumer, Al-Jadaan said, adding that reducing food loss and waste “can make a big contribution.” , to support food security and also alleviate industrial pollution.

Yellen called on the international community to step up and speed up aid to Ukraine, saying earlier Friday the war had made it even more important for officials to unite on global challenges, including tighter financial conditions and slowing growth in the big economies.

The message was underscored by weaker-than-expected data from the world’s No. 2 economy on Friday. China expanded in the second quarter at the slowest pace since early 2020, when Covid first hit Wuhan.

Yellen was scheduled to speak later on Friday on developing policy tools to address threats to global macroeconomic stability, according to a Treasury Department official.

A series of central bank decisions this week, some of which were unscheduled, have underscored the need for officials to keep their own domestic political conditions front and center. At the same time, G20 meetings are increasingly emphasizing the dangers of ignoring instability in the more vulnerable areas of the world economy, including countries that are on the brink of sovereign default – or are already, like Sri Lanka.

Indonesia is trying to make progress on debt treatment for countries like Zambia, the person said. She also wants to include a mention of the energy transition mechanism in the written agreement of the G20. The ETM is a platform for developing countries to obtain funding for coal plant decommissioning from a variety of investors, including government, multilateral and private, rather than seeking bilateral funding.

According to a press release from Indonesian officials, 17 of the 20 finance ministers and 11 central bank governors attended Friday’s meetings. Russia was represented by its deputy finance minister, while Ukraine’s finance minister dialed in virtually. Despite the tensions, there were no blackouts at the morning sessions, said a person familiar with the talks.

https://www.independent.ie/business/world/divided-over-russia-g20-focuses-on-food-security-and-debt-41841755.html Divided across Russia, the G20 focuses on food security and debt

Fry Electronics Team

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