Conflicts and war: G20 Finance Ministers analyzes current global economic scenario

New Delhi , Oct 13, 2023, IANS

The fourth G20 Finance Ministers and Central Bank Governors (FMCBG) meeting has noted with "deep concern the immense human suffering and the adverse impact of wars and conflicts around the world".

In a communique issued after the first day of the two-day deliberations in Marrakesh on Thursday, the FMCBG on the Ukraine war said that "In line with the UN Charter, all states must refrain from the threat or use of force to seek territorial acquisition against the territorial integrity and sovereignty or political independence of any state. The use or threat of use of nuclear weapons is inadmissible".

"In this context, emphasizing the importance of sustaining food and energy security, we called for the cessation of military destruction or other attacks on relevant infrastructure. We also expressed deep concern about the adverse impact that conflicts have on the security of civilians thereby exacerbating existing socio-economic fragilities and vulnerabilities and hindering an effective humanitarian response," it noted.

"We call on all states to uphold the principles of international law including territorial integrity and sovereignty, international humanitarian law, and the multilateral system that safeguards peace and stability. The peaceful resolution of conflicts, and efforts to address crises as well as diplomacy and dialogue are critical.

"We will unite in our endeavour to address the adverse impact of the war on the global economy and welcome all relevant and constructive initiatives that support a comprehensive, just and durable peace in Ukraine that will uphold all the purposes and principles of the UN Charter for the promotion of peaceful, friendly, and good neighbourly relations among nations in the spirit of ‘One Earth, One Family, One Future’. Today’s era must not be of war," the communique stated.

Reaffirming that the G20 is the premier forum for international economic cooperation and recognising that while the it is not the platform to resolve geopolitical and security issues, the communique said "we acknowledge that these issues can have significant consequences for the global economy".

"We highlighted the human suffering and negative added impacts of the war in Ukraine with regard to global food and energy security, supply chains, macro-financial stability, inflation and growth, which has complicated the policy environment for countries, especially developing and least developed countries which are still recovering from the ovid-19 pandemic and the economic disruption which has derailed progress towards the SDGs. There were different views and assessments of the situation," it added further.

The FMCBG appreciated the efforts of Turkey and UN-brokered Istanbul Agreements consisting of the Memorandum of Understanding between Russia and the Secretariat of the UN on promoting Russian food products and fertilizers to the world markets and the Initiative on the safe transportation of grain and foodstuffs from Ukrainian ports (Black Sea Initiative), and called for their full, timely and effective implementation to ensure the immediate and unimpeded deliveries of grain, foodstuffs, and fertilizers/inputs from Moscow and Kiev.

"This is necessary to meet the demand in developing and least developed countries, particularly those in Africa," it noted.

The FMCBG also expressed "anguish" over loss of lives in Morocco and Libya due to natural disasters and extended its condolences to the bereaved families.

On the global economic scenario, the FMCBF said that it has shown resilience to recent shocks.

"However, the outlook remains subdued, uneven and increasingly divergent. While headline inflation rates have eased in several countries, risks remain and core inflation is elevated and persistent. The balance of risks continues to be tilted to the downside given, geo-economic tensions, extreme weather events, natural disasters, and the tightening in global financial conditions which could worsen debt vulnerabilities, among other factors," it noted.

These risks are further constraining the available policy space, particularly for many low and middle-income countries.

To address these challenges, we reiterate the need for well-calibrated monetary, fiscal, financial, and structural policies to promote growth, reduce inequalities and maintain macroeconomic and financial stability, the communique said.

"We reaffirm our commitment to the policy actions and approaches agreed to in July 2023 and called for by Leaders in September 2023. We remain committed to pursuing ambitious efforts to evolve and strengthen multilateral development banks (MDBs) to address the global challenges of the 21st century with a continued focus on addressing the development needs of low and middle-income countries and reiterate the call by our leaders to deliver better, bigger and more effective MDBs by enhancing operating models, improving responsiveness and accessibility, and substantially increasing financing capacity to maximise development impact.

"We re-emphasise the need for an additional push for continued and further impetus for ambitious implementation of the recommendations of the G20 Independent Review of MDBs," it noted.

It welcomed the positive developments in FATF towards revising its standards on asset recovery and reinforcing global asset recovery networks so as to enhance global efforts to recover criminal proceeds promptly and effectively.

The FMCBG committed itself towards taking forward the actions mandated by its leaders in the New Delhi Leaders’ Declaration on Finance Track issues.

"We welcome the upcoming 2024 G20 Presidency of Brazil and look forward to continuing our work on enhancing global economic cooperation to achieve strong, sustainable, balanced and inclusive growth," it concluded.

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