Indonesia Calls For G20 Cooperation After Recent Conflicts

The Ukraine crisis dominated a meeting of finance ministers from the world’s top 20 countries that began on Thursday. Indonesian President Susilo Bambang Yudhoyono has warned that “now is not the time” to add new risks to the world’s already fragile economy. Russia’s military presence on Ukraine’s borders has sparked one of the worst East-West conflicts in decades; it shook financial markets and added to the headwinds confronting a global economy still recovering from the COVID-19 epidemic.

The G20 finance chiefs’ conference will likely focus on geopolitical threats and the economic consequences of the epidemic and growing global inflation, and tighter monetary policy in some countries.

President Joko Widodo of Indonesia, the host country, encouraged G20 countries to focus on collaboration to recover a global economy that is “still rocked” by the epidemic. “This is not the time for rivalry in a circumstance like this,” he said in his opening remarks at the G20 summit, which many ministers are watching online because to the epidemic.

Impacts on Developing Countries

After their two-day meeting on Friday, the G20 finance chiefs will release a communiqué. The G20 financial chiefs should call on major central banks to explain their objectives clearly to avoid generating large market fluctuations as the US Federal Reserve considers raising interest rates, with some of its colleagues expected to follow suit. According to a document with the agreed stance of European G20 members, G20 policymakers are also likely to advise developing countries to prepare for potential market repercussions from monetary tightening in developed economies.

“Different economic recoveries may have important ramifications,” Indonesian Finance Minister Sri Mulyani Indrawati told the G20 finance chiefs. “Global cooperation, including a debate on an exit strategy, will be crucial in this area,” she stated. The G20 is faced with the tough issue of guiding policy in the light of worldwide disparities in the pandemic’s recovery speed. COVID-19 Omicron variant instances are down in many developed countries. However, they are still rising in many developing countries, including Indonesia, the study’s host. On Wednesday, the International Monetary Fund cautioned that negative risks remained dominant, with increasing mobility restrictions in some countries and supply-demand mismatches expected to stifle GDP.

As default risks rise and requests for lighter loan terms rise, the IMF has stated that it would seek assistance from the G20; it wants to strengthen a debt restructuring mechanism for impoverished nations. According to a US Treasury official, US Treasury Secretary Janet Yellen would push her G20 counterparts to help international organizations resolve bottlenecks in vaccine distribution and support investment in pandemic prevention.

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