Virendra Pandit
New Delhi: A day after the ongoing Russian invasion of Ukraine entered the second year on Thursday, a meeting of finance chiefs of the Group of 20 (G-20) countries may have failed to arrive at a consensus over the devastating war and the debt burden of the “Global South.”
Russia, a member of the G-20 but not the G-7, claims its action in Ukraine is a “special military operation,” and avoids calling it an invasion or war.
The media reported on Saturday that the financial heads of the world’s 20 biggest economies found it challenging to strike a consensus over the Russian-Ukraine conflict and on resolving the debt burden of distressed developing nations.
The key meeting of finance ministers and central bank chiefs of the G-20 member-nations, hosted in Bengaluru, might end later in the day without issuing a joint communique for want of a consensus on how to describe the conflict in Ukraine.
The United States and its allies in the Group of Seven (G-7) wealthiest countries sought to squarely condemn Russia for the invasion of its neighbor, but the Russian and Chinese delegations blocked the proposal.
US Treasury Secretary Janet Yellen was quoted as saying: “I think there has to be a statement in the communique condemning Russia’s war…It’s something that I think is absolutely necessary.
“And I think the G-7 is certainly united on that, so it’s something that I would expect and I think is necessary and appropriate,” she added.
But Yellen admitted that, until then, there were no “deliverables” from the meeting, which was mostly organizational.
The G-20 host, India, which holds this year’s presidency of the group, is pressing the meeting to avoid using the word “war” in any communique and has kept a largely neutral stance on the conflict. New Delhi has avoided blaming Russia for the invasion, sought a diplomatic solution, and multiplied its purchases of Russian oil.
India and China were among the nations that abstained on Thursday when the United Nations voted overwhelmingly to press Moscow to withdraw its troops from Ukraine and stop fighting.
Besides the G-7 member-nations, the G-20 bloc also includes Australia, Brazil, Saudi Arabia, and other countries.
Therefore, a consensus on the G-20’s communique was unlikely except for a last-minute surprise, and the meeting might end with a statement by the host summarising the discussions.
On the sidelines of the G-20, the International Monetary Fund (IMF) also held a meeting on Saturday with the World Bank, China, India, Saudi Arabia, and the G-7 on restructuring debt for distressed economies.
But here also, disagreements surfaced among members.
“We just finished a session in which it was clear that there is a commitment to bridging differences for the benefit of countries,” IMF Managing Director Kristalina Georgieva, who co-chaired the roundtable with Indian Finance Minister Nirmala Sitharaman, said.
The reports said pressure has been building on China, the world’s largest bilateral creditor, and other nations to take a significant haircut in loans given to struggling developing countries.
Chinese Finance Minister Liu Kun reiterated Beijing’s position that the World Bank and other multilateral development banks participate in debt relief by taking haircuts alongside bilateral creditors.
Yellen had said before the debt meeting that she would press all bilateral creditors, including China, to participate in meaningful discussions, adding that debt treatment for Zambia and financing assurances for Sri Lanka were “most urgent.”
Zambia owed Beijing nearly USD 6 billion of total external debt of USD 17 billion at the end of 2021, while Ghana owes Beijing USD 1.7 billion, according to the International Institute of Finance, a financial services trade association focussed on emerging markets.
Sri Lanka owed Chinese lenders USD 7.4 billion, or nearly a fifth of public external debt, by the end of 2022.