US Treasury Secretary Janet Yellen at the G20 Finance Summit in Bangalore
Disputes over the war in Ukraine prevented the G20 of central bankers and economics ministers from presenting a joint final communiqué. At the end of the Bengaluru (Bangalore) Summit, which started Friday and ended yesterday, the Indian Presidency was only able to release a “summary and conclusion document” in seventeen points, two of which were unsigned by Russia and China. These paragraphs are taken entirely from the final declaration by the G20 leaders at the Bali summit and contain an explicit condemnation of Russia.
In the first, “the G20 strongly regrets the aggression of the Russian Federation against Ukraine and demands its full and unconditional withdrawal from the territory of Ukraine.” The second reiterates that “it is essential to uphold international law and the multilateral system which secures peace and stability,” and this includes “defending all the purposes and principles enshrined in the Charter of the United Nations and respecting the humanitarian… international law, including protection of civilians and infrastructure in armed conflict”.
For a long time it looked as if India would also side with Moscow. Last Thursday, the Indian representative at the United Nations Assembly, along with his Chinese counterpart and those of thirty other countries, abstained from voting on the resolution calling for the withdrawal of Russian forces from Ukrainian territory and for a “just and lasting” peace hopes. In the end, however, India relented and even admitted to using the word “war” in reference to the invasion of Ukraine. Instead, upon her arrival in Bangalore, Janet Yellen, former chair of the Federal Reserve and current US Treasury Secretary, immediately made it clear to Washington and also to the others in the G7 that it was “absolutely necessary” to include a “condemnation of the war in Of Ukraine”. The pressure obviously did something.
While ministers and central bankers met in Bangalore, Chancellor Olaf Scholz met Prime Minister Narendra Modi in New Delhi to persuade him to relax relations with Moscow. On the table of the meeting are free trade between India and the European Union and the sale of six conventional submarines from ThyssenKrupp for five billion euros. A similar attempt with China is currently unthinkable. Federal Economics Minister Christian Lindner described Beijing’s decision to side with Russia as “regrettable”. For Italy, Minister Giancarlo Giorgetti emphasized that “the upheavals in Ukraine and above all the climate challenge complicate and reinforce the differences. Energy security and food insecurity split the world in two,” he said, but was also “pleased” with progress on the international taxation and health protection fronts.
The central financial issue at the summit was supposed to be the debt of poor countries, but the divisions actually prevented meaningful progress. The International Monetary Fund organized a meeting with the World Bank, the G7, China, India and Saudi Arabia: nothing more than a “commitment to overcome differences for the good of nations,” as Kristalina Georgieva, director of the IMF, said. China, the world’s largest creditor, is under pressure to agree to forego some of its loans to developing countries. Beijing is asking for the involvement of the World Bank (awaiting likely new President Ajay Banga) and other multilateral banks. But the details of the possible options have not even been discussed: they will be discussed at the spring meetings of the IMF and World Bank in April.
India has instead achieved some consensus on the need for more cryptocurrency regulation. On this point, at least, everyone at the G20 seems to agree.