U.S. Treasury Secretary Janet Yellen accused Russian officials attending a G20 finance leaders meeting of being “complicit” in atrocities in Russia’s invasion of Ukraine, while host India avoided mentioning the year-long war in inaugural remarks. Indian Prime Minister Narendra Modi urged the financial leaders to focus on the world’s “most vulnerable citizens”, making no direct reference to the war, although the conflict and its effect on the global economy are likely to dominate the two-day meeting. Modi said the COVID-19 pandemic and “rising geo-political tensions in different parts of the world” had led to unsustainable debt levels in several countries, disruptions to global supply chains and threats to food and energy security. “I would urge that your discussions should focus on the most vulnerable citizens of the world,” he said, adding that stability, confidence and growth had to be brought back to the world economy. In remarks on the first anniversary of the Russian invasion, Yellen called on G20 counterparts to “redouble their efforts to support Ukraine and restrict Russia’s capacity to wage war.” Leaders of the wealthy G7 democracies are expected to announce new sanctions against those aiding Russia’s war effort, following a virtual meeting with Ukrainian President Volodymyr Zelenskiy later on Friday. And ahead of that meeting, Britain issued more sanctions against Russia, including export bans on every item it has used on the battlefield and import bans of iron and steel goods. The G20 bloc includes the G7 countries, as well as Russia, China, India, Brazil and Saudi Arabia, among others. However, Russian Finance Minister Anton Siluanov and central bank governor Elvira Nabiullina were not at the G20 meeting in India, and Moscow was represented by deputies. Yellen said Russian President Vladimir Putin’s “weaponisation” of food and energy has hurt not only Ukraine, but the global economy and especially developing countries. “I urge the Russian officials here at the G20 to understand that their continued work for the Kremlin makes them complicit in Putin’s atrocities,” Yellen said. “They bear responsibility for the lives and livelihoods being taken in Ukraine and the harm caused globally.” French Finance Minister Bruno Le Maire told Reuters that G20 financial leaders must condemn Russia’s aggression against Ukraine and that Europe was working on new sanctions against Moscow. India, which holds the current G20 presidency, does not want the bloc to discuss additional sanctions on Russia and is also pressing to avoid using the word “war” in G20 communique language to describe the conflict, G20 officials told Reuters. New Delhi has maintained a neutral stance on the conflict, vastly increasing its purchases of cheaper Russian oil. Russia calls its actions in Ukraine a “special military operation”. Yellen said the communique was still under discussion and she hoped to see a strong condemnation of Russia’s invasion and the damage it has caused Ukraine and the global economy.
GLOBAL ECONOMY IMPROVES
The meeting comes amid signs that the global outlook has improved from the last G20 summit in October, when a number of economies were teetering on the brink of recession amid energy and food price spikes caused by the war. Yellen highlighted the improvement, saying the global economy “is in a better place today than many predicted just a few months ago”. The International Monetary Fund has forecast global GDP growth for 2023 at 2.9%, up from a 2.7% forecast in October, but still well below the 3.4% achieved in 2022. Yellen attributed the improvement in part to cooperation among G20 central banks and governments over the past year in taking strong action to quell inflation, even at the expense of growth. Inflation in the United States and other countries has eased alongside lower energy prices, but Yellen added that such efforts needed to continue and more work was needed to mitigate spillovers from the war, such as easing food shortages and holding down energy prices and Russian revenues. The G20 meeting is also expected to hold talks on debt relief for distressed countries, with pressure building on China, the world’s largest bilateral creditor, and other nations to take a large haircut in loans. In a video address to the meeting, Liu Kun, China’s finance minister, reiterated Beijing’s position that the World Bank and other multilateral development banks participate in debt relief by taking haircuts alongside bilateral creditors. International financial institutions and commercial creditors should follow the principle of “joint action, fair burden”, Liu said.
