SONY TUMBELAKA | SWIMMING POOL | AFP via Getty Images World leaders begin a meeting on Tuesday on the Indonesian holiday island of Bali as the global economy grapples with a looming recession, huge interest rate hikes by central banks and historically high inflation. The annual meeting of leaders from the world’s major economies, known as the Group of 20 nations, also comes as Russia’s war in Ukraine drags on and relations between Washington and Beijing remain strained. The gathering of officials representing more than 80% of global GDP and 75% of global exports marks the 17th meeting since the platform was launched after the Asian financial crisis in 1999 as a meeting for finance ministry officials and central bank leaders.
Who is attending?
Nineteen countries and one economic region, the European Union, will attend this year’s two-day G-20 meeting. This year’s list of personal contributors has come under the spotlight as Russian President Vladimir Putin continues his unprovoked war in Ukraine. Putin will not attend the summit and will be represented by Foreign Minister Sergei Lavrov, who walked out of the G-20 foreign ministers’ meeting in July as his global counterparts called for an end to the war in Ukraine. Reuters reported that Putin may join virtually. US President Joe Biden is also scheduled to hold a bilateral meeting with his Chinese counterpart Xi Jinping ahead of the G-20. Other attendees include newly appointed UK Prime Minister Rishi Sunak and Saudi Crown Prince and de facto leader Mohammed bin Salman, who recently led an OPEC+ initiative to cut oil production by 2 million barrels per day to support prices .
Expectations ‘not too high’
Not much progress is expected from the Biden-Xi meeting, according to Andrew Staples, Asia-Pacific director of Economist Impact, the policy and insights arm of The Economist Group. “Expectations are not very high,” he told CNBC’s Martin Song, adding that ongoing geopolitical tensions are dragging down global growth. He pointed to China’s stance on the war in Ukraine as one of many signs of eroding US-China relations. “There’s a lot of concern in the business community worldwide that these geopolitical tensions are negatively impacting … we have in Ukraine, which China has unfortunately been kind of ambivalent about when it comes to President Putin, it’s really hurting the global economy.” he said. “Finding some term in that relationship — what Biden wants to do — will be positive, not only for the business community but also for the global economic climate,” he said.
The role of Russia
Russia’s latest move to continually reverse its stance on the United Nations Black Sea initiative is “likely to overshadow all other negotiations in Bali,” said Laura von Daniels, head of Americas research at the German Institute of International and Security Affairs. in a Council on Foreign Relations report. The agreement, reached earlier this year, sought to ease Russia’s naval blockade and reopen key Ukrainian ports for the delivery of crops through a humanitarian Black Sea corridor. Ends November 19th. “The deal would cost Russia nothing,” von Daniels said. “It would, however, allow both Xi and Putin — as leaders of authoritarian states — to be applauded on the world stage for providing food security.”
Restart strategy
The meeting comes as the vast majority of the world reopens its borders and lifts Covid-related restrictions – leaning into the post-pandemic era with its motto, “Recover Together, Recover Strong”. Members agreed that “policy stimulus should be appropriately withdrawn during the recovery,” the Indonesian G-20 Presidency said in a July memo released ahead of the meeting. He referred to a survey of member states that he conducted. He said the potential long-term impact of the coronavirus pandemic on global growth will be a key topic of meetings in November. “Risks from supply disruptions, rising inflation and weak investment are the top three risks that need to be urgently addressed given the signs from the pandemic,” he said, underscoring the need for global cooperation, including gradual opening borders to support the revitalization of trade transactions. “We all have some version of an inflation problem and also rising interest rates, so everyone is interested in making progress here,” Australian Treasurer Jim Chalmers told CNBC’s Martin Sung. “The conditions are high risk and they are unstable,” he said.
