Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Russia, China water down G20 text on geopolitical tensions

Economy Feb 18, 2022 08:36PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
3/3 © Reuters. Head of delegates prepare for a meeting on the last day of the G20 finance ministers and central bank governors meeting in Jakarta, Indonesia, February 18, 2022. Mast Irham / Pool via REUTERS 2/3

By Gayatri Suroyo and David Lawder

JAKARTA/WASHINGTON (Reuters) -Russia and China watered down a G20 finance leaders' statement on geopolitical risks to the global economy as a contentious meeting ended on Friday, deleting a reference to "current" tensions as financial markets fretted over the prospect of war in Ukraine.

The gathering of finance ministers and central bank governors from the Group of 20 major economies was one of the most fractious since the start of the COVID-19 pandemic in 2020, according to people familiar with the discussions.

Canadian Finance Minister Chrystia Freeland strayed from the G20 economic script to issue an impassioned plea to her Russian counterparts to not invade Ukraine, warning that such action would hurt the global economy and bring "crushing" sanctions against Russia, according to two sources familiar with her remarks.

Other sources familiar with the meeting said China and Russia had objected to the reference to "current tensions" in an earlier draft communique, as well as disagreements on debt restructuring for poor countries and carbon pricing.

The group's final communique simply said: "We will also continue to monitor major global risks, including from geopolitical tensions that are arising, and macroeconomic and financial vulnerabilities."

As the meeting concluded, U.S. and European stocks fell on worries that a Russian invasion of Ukraine was imminent after Russian-backed separatists announced a surprise evacuation of their breakaway regions in eastern Ukraine.

DEBT RELIEF STANDSTILL

The G20 talks, held virtually and in the Indonesian capital, Jakarta, were also marked by disagreements over the group's stalled debt restructuring framework.

The final communique failed to endorse International Monetary Fund and World Bank proposals for an immediate debt service suspension for poor countries that seek restructurings and an expansion to include some middle-income countries.

Instead, finance officials reiterated their "commitment to step up our efforts" to implement the framework in a "timely, orderly and coordinated manner" without any specifics.

Earlier, a source at the talks said China, by far the world's largest bilateral creditor, had baulked at the idea of accepting outright haircuts on debt.

World Bank President David Malpass said at the Munich Security Conference after the finance meeting that he was concerned the G20 "is not identifying the steps forward" to deal with a massive and growing debt overhang in developing countries.

"The G20 discussions on debt were really disappointing," said Eric LeCompte, executive director of the Jubilee USA Network, a faith-based organization campaigning for debt relief for poor countries. He said China was resisting steps to strengthen the bankruptcy-like G20 debt framework "so that they can cut deals on the side" with debtor countries.

CREDIBILITY QUESTIONS

Indonesia's finance minister, Sri Mulyani Indrawati, said other sticking points involved the reticence of some countries to endorse carbon-pricing as a tool to tackle climate change and how to help low-income countries such as Chad, Zambia and Ethiopia struggling with debt burdens made yet more unsustainable during the coronavirus pandemic.

"This also concerns the reputation and credibility of the G20 as a group of countries with the biggest economies to help countries that are in an uneasy situation," she said.

On other subjects, the final draft of the G20 text pledged to use "all available policy tools to address the impacts of the pandemic," while warning that future policy space was likely to be "narrower and uneven."

"Central banks will act where necessary to ensure price stability in line with their respective mandates, while remaining committed to clear communication of their policy stances."

The diverging pace of recovery from the pandemic is complicating the policy path for central banks. Expected steady interest rate hikes by the U.S. Federal Reserve have drawn attention to the potential fallout for emerging markets.

While cases of the Omicron variant of COVID-19 are receding in many wealthy countries, they are still rising in many developing nations including host country Indonesia.

The G20 text also pledged to ensure that a landmark deal last year setting a global minimum level of corporate tax could be put into force in 2023. [nL1N2UT0JV]

Russia, China water down G20 text on geopolitical tensions
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
Franco Dominguez
Franco Dominguez Feb 18, 2022 10:33PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
china made some health utilities dnt forget that
Todd Gray
Todd Gray Feb 18, 2022 8:55PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Perhaps they watered it down, because it's time to wash the hog of the smelly stuff it's been flinging all around the world? I'm long China, and adding to it on Monday.
Shep De
Shep De Feb 18, 2022 9:26AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Glossing over Ukraine-Russia plus saying inflation is only a result mainly of supply chain disruptions.No care (competency?) to say the consumer is vastly wealthy CURRENTLY, has 167 TRILLION in USA alone, is working in healthy job market, yet, we're moving toward 10% inflation by early spring?Why not?The consumer is fueling the supply chain woes, why not mention them as source of inflation spiraling out of control with no Peak Inflation # in sight?
Tre Hsi
Tre Hsi Feb 18, 2022 5:44AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
G20, is that still a thing???
Don Getty
Don Getty Feb 18, 2022 5:44AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
yes time to toss china and russia - if your manipulating the image for your benefit time to go - personally i don't know of any made in russia products but nothing made in china will come thru our doors for a very long time
William Carnell
William Carnell Feb 18, 2022 5:44AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Economic warfare is a silent hack. US' good old fantasy of a "free market" facilitates China's continued growth...and China knows exactly how to manipulate. Republicans can't fix it, anyone promoting strong Fed Gov action is a RINO; lose votes! Dems can't fix it...it would just be seen as another heavy-handed political power grab...lose votes! (The Police, Spirits in the Material World.)
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email