Russia and China tone down the G20 text on geopolitical tensions

Russia and China have watered down a statement drafted by the heads of the Group of 20 (G20) major world economies to remove a reference to “current” geopolitical tensions clouding the economic outlook, according to sources at the talks.

The talks were held both online and in person in Jakarta, and the final communiqué will be published after the meeting.

An early draft of the final statement seen by Reuters no longer contained any direct mention of Western concerns about Russia invading Ukraine, saying only that the G20 would monitor risks, “including those stemming from (current) geopolitical tensions.”

The drafters of the statement use parentheses for language that has not been agreed upon by everyone at the table. The sources told Reuters that both Russia and China asked for the word “current” to be removed.

Sri Mulyani Indrawati, Indonesia’s finance minister, told local reporters it had taken time to get to the final wording “because, of course, there were countries involved in the mentioned geopolitical tension in the room at the same time.”

The latest English draft seen by Reuters said that “we will also continue to monitor major global risks, including those stemming from emerging geopolitical tensions, and macroeconomic and financial vulnerabilities.”

This vaguer language contrasts sharply with the warning by G7 finance ministers on Monday that Russia would face “massive” economic consequences if it decided to invade Ukraine. Neither Moscow nor China are members of the G7.

Sri Mulyani said the most difficult sticking points were the reluctance of some countries to support carbon pricing as a tool to tackle climate change, and how to help poor countries whose debt burdens have worsened during the coronavirus pandemic. coronavirus.

“In this case, the process is not over,” German Economy Minister Christian Lindner said.

In the draft, the finance chiefs of the world’s major economies pledged to use “all available monetary policy tools to deal with the impacts of the pandemic”, while warning that future regulatory space will likely be ” narrower and more uneven.

Inflation is currently at elevated levels in many countries due to supply disruptions, a mismatch between supply and demand, as well as rising raw material and energy costs, according to the draft statement.

The diverging pace of the recovery from the pandemic is complicating the direction of central banks’ monetary policies. The expected constant rises in interest rates by the US Federal Reserve have drawn attention to the possible consequences for emerging markets.

Although cases of the omicron variant of COVID-19 are declining in many rich countries, they continue to rise in many developing nations, including the meeting’s host country, Indonesia.