Janet Yellen says Russians have ‘no place’ at G-20 session in Bali

TREASURY Secretary Janet Yellen (picture) said Russian government officials had “no place” at the upcoming meetings for finance chiefs from the world’s leading economies in Bali, Indonesia.

“Russia’s actions are not the actions of a government that upholds international norms and laws,” Yellen told reporters when discussing Russia’s war in Ukraine. “Representatives of the Putin regime have no place at this forum.”

Yellen said she hopes India and China will see the benefits of a proposal to cap the price paid for Russia’s oil exports, adding that the lack of a price-cap plan would be worse for Russia. She said a decision on an oil price-cap level hadn’t yet been made.

Energy-related price growth was responsible for almost half of the US inflation surge, Yellen said. Consumer inflation is “unacceptably high” and the Biden administration supports the Federal Reserve’s efforts to curb it, she told reporters.

Yellen argued that officials from the Group of 20 (G-20) should put more pressure on China over debt issues, including working to restructure debt for lower-income countries such as Sri Lanka.

Yellen spoke on the eve of two days of meetings on the Indonesian resort island. An impasse on how to characterize the economic fallout from Russia’s invasion of Ukraine is hanging over prospects for agreement at the G-20 meetings.

Impasse

Meanwhile, an impasse on how to characterize the economic fallout from Russia’s invasion of Ukraine is hanging over prospects for agreement on it and related issues as finance chiefs gather for the G-20 meetings in Bali.

Disagreements on the causes and ways to alleviate supply-chain and inflation crises stemming from the war are set to complicate efforts to settle on a communique at the end of the gathering on Saturday, according to people familiar with the matter.

Indonesia is pushing for a communique with a draft being worked on, but the host nation’s officials aren’t optimistic over its prospects and might resort to a chair’s statement summarising the talks at their conclusion, according to one of the officials.

A preliminary list of issues on the table for G-20 ministers to agree on is more notable for what it excludes than what it mentions. It doesn’t contain any references to Russia, war, inflation, or supply chains, according to a person familiar with the communique drafting.

Finance ministers and central bank governors from the world’s biggest economies are gathering under increasingly fragile global conditions, as officials desperately try to wrangle inflation and avert recession. Meantime, lower-income countries are staring down rising risks of sovereign debt default and social unrest that could trigger widespread destabilisation.

Russia’s participation at the meetings has been a fault line on which host country Indonesia has tried to tread delicately while trying to assemble productive discussions around topics like digital banking and inclusion, climate risk mitigation, and common tax standards.

During a sideline conference Thursday, the Treasury’s acting undersecretary for international affairs, Andy Baukol, dodged a question on whether US President Joe Biden will attend the G-20 leaders summit in November.

“I certainly hope so,” Baukol said. “Obviously there’s broader context to the G-20 this year, which is difficult, but my minister is here today, Secretary Yellen. She’ll fully participate tomorrow and the next day.”

Russia’s presence in the G-20 has hindered cooperation more broadly, including at a meeting of foreign ministers last week. The US strategy has been to forge side agreements with like-minded countries on issues like food and energy rather than a focus on achieving consensus with nations like China and Russia.

An early version of the communique includes a deal to set up a creditors committee to discuss treatment of Zambia’s debt, while leaving out any mention of Chad and Ethiopia — unlike the agreement released in February.

The draft also contains an agreement to collaborate on addressing the food and fuel crisis, while publishing a separate “G-20 Presidency Note” to coordinate exit strategies.

Official meetings of the finance officials are set to be held Friday and Saturday, while side events are underway Thursday, also featuring speakers from across the G-20 grouping and observer economies.

Among highlights from the side events Thursday:

* A roundtable on sustainable finance included Indonesian Finance Minister Sri Mulyani Indrawati, Indian Finance Minister Nirmala Sitharaman and the US Treasury’s Baukol, addressed the need to accelerate investment in projects aimed at meeting emissions-reduction targets. They focused, in particular, on incentivizing private sources of funds, since financing needs far outstrip public spending capacity.

* A separate panel of top Southeast Asia central bankers highlighted developments on linking cross-border payments systems in the region, with Bank Negara Malaysia Governor Nor Shamsiah Mohd Yunus touting linked QR systems with Indonesia and Thailand and talks with Singapore and Philippines. Monetary Authority of Singapore MD Ravi Menon said the city-state has linked to Thailand and was forging similar partnerships with Malaysia, India, and Indonesia. The officials emphasized global inter-operability and the benefits of these transactions for remittances flows and small-business finance. – Bloomberg