G-20 warned of Ukraine threat to global recovery

[JAKARTA] The crisis in Ukraine is a serious threat to the global economy's post-pandemic recovery, Indonesia's leader on Thursday (Feb 17) warned a meeting of finance chiefs from the G-20 nations.

The Group of 20 - which brings together the world's top economies including the US, China and some European nations - is holding talks in hybrid format in the Indonesian capital Jakarta.

Opening the 2-day meeting, Indonesian President Joko Widodo warned of the risks to the fragile recovery from the crisis in Ukraine, where fears are growing that Russia is set to invade.

"This is not the time for rivalries and creating new tensions that disrupt the... recovery, let alone endanger the safety of the world, as is happening in Ukraine", said Widodo, whose country currently holds the G-20 presidency. "All parties must stop the rivalry and tension". He urged the G-20, which includes Russia, to instead focus on "collaborating" to help boost the global economy.

The threat of a Russian invasion of its ex-Soviet neighbour presents a fresh challenge for a world already struggling to keep a recovery from the coronavirus pandemic on track as inflation surges.

Also on the agenda at the meeting - originally due to take place on holiday island Bali before being moved due to an Omicron virus wave - was how to reform global health systems to be better prepared for future pandemics.

'Mobilise funds'

US Treasury Secretary Janet Yellen, speaking via video-link, said that "we must act urgently to strengthen the global health architecture so that we have the tools to prevent, prepare for, and respond to future health crises". "We must also focus on mobilising the funding needed to address gaps in the system".

Calls have been growing for new funding systems, especially following the challenges in producing and distributing Covid vaccines.

Financing needs are "undeniable", with estimates of the amount required running to US$75 billion over the next 5 years, Yellen said.

Indonesian Finance Minister Sri Mulyani Indrawati said the G-20 was discussing establishing a fund to combat future health crises, which would be coordinated by the World Health Organization (WHO).

Efforts to strengthen the global health architecture can only succeed if they bolster the WHO's role, the body's chief Tedros Adhanom Ghebreyesus stressed.

"It's clear that at the centre of this architecture, the world needs a strong and sustainably financed WHO... with its unique mandate, unique technical expertise and unique global legitimacy", Tedros told the talks.

Another key topic was skyrocketing global inflation, and how central banks in developed nations proceed with hiking rates and withdrawing massive pandemic stimulus without causing shocks in developing countries.

Withdrawing stimulus will "potentially create tighter global financial conditions and may induce capital outflows from emerging markets", warned Perry Warjiyo, governor of the Indonesian central bank. AFP