Indonesian Finance Minister Sri Mulyani (C front) attends the G20 Finance Ministers Meeting in Nusa Dua, on Indonesia’s resort island of Bali, on July 16, 2022.
SONNY TUMBELAKA | POOL | AFP via Getty Images
World leaders are kicking off a gathering Tuesday on the vacation island of Bali, Indonesia as the worldwide economy grapples with a looming recession, central banks’ jumbo rate hikes and historically high inflation.
The annual meeting of leaders from the world’s major economies, generally known as the Group of 20 nations, can also be happening as Russia’s war in Ukraine drags on and relations between Washington and Beijing remain tense.
The gathering of officials that represent greater than 80% of world GDP and 75% of exports worldwide marks the seventeenth meeting because the the platform kicked off after the Asian financial crisis in 1999 as a gathering for finance ministry officials and central bank leaders.
Who’s attending?
Nineteen countries and one economic region, the European Union, will attend this 12 months’s two-day G-20 meeting.
This 12 months’s in-person attendee list has been within the highlight as Russian President Vladimir Putin continues his unprovoked war in Ukraine.
Putin won’t be attending the summit and can as an alternative be represented by Foreign Minister Sergey Lavrov, who walked out of a G-20 foreign minister meeting in July as his global counterparts called for an end to the war in Ukraine. Reuters reported Putin may join virtually.
U.S. President Joe Biden can also be scheduled to carry a bilateral meeting together with his Chinese counterpart Xi Jinping ahead of the G-20.
Other attendees include newly appointed U.K. Prime Minister Rishi Sunak and Saudi Arabia’s crown prince and de facto leader Mohammed bin Salman, who recently led an OPEC+ initiative to chop oil production by 2 million barrels per day to shore up prices.
Expectations are ‘not very high’
Not much progress is anticipated from Biden and Xi’s meeting, in accordance with Andrew Staples, Asia Pacific director of Economist Impact, the policy and insights arm of The Economist Group.
“Expectations are usually not very high,” he told CNBC’s Martin Soong, adding that ongoing geopolitical tensions are dragging down global growth. He highlighted China’s stance on the war in Ukraine as one among many signs of eroding relations between the U.S. and China.
“There’s a whole lot of concern for the business community globally that these geopolitical tensions is impacting negatively … we now have in Ukraine, which China has been unfortunately been somewhat ambivalent about on the subject of President Putin, is basically damaging the worldwide economy,” he said.
“Finding some floor to this relationship — which is what Biden is seeking to do — will probably be a positive, not just for the business community but for the worldwide economic sentiment as well,” he said.
The role of Russia
Russia’s latest move to always flip its stance on the United Nations-led Black Sea Grain initiative is “prone to overshadow all other negotiations in Bali,” Laura von Daniels, head of the Americas research on the German Institute for International and Security Affairs, said in a Council on Foreign Relations report.
The agreement, reached earlier this 12 months, sought to ease Russia’s naval blockade and reopen key Ukrainian ports to deliver crops through a humanitarian corridor within the Black Sea. It expires on Nov. 19.
“To agree wouldn’t cost Russia anything,” said von Daniels. “It will, though, allow each Xi and Putin — as leaders of authoritarian states — to be applauded on the world stage for providing food security.”
Reopening strategy
The meeting takes place as a overwhelming majority of the world reopens borders and lifts Covid-related restrictions — leaning into the post-pandemic era with its slogan, “Get well Together, Get well Stronger.”
Members agreed that “policy stimulus must be withdrawn appropriately through the recovery,” the Indonesia G-20 Presidency said in a July note released ahead of the meeting. It referred to a survey of member states that it conducted.
It said the potential for longer-lasting impact from the coronavirus pandemic on global growth can be a key topic of the meetings happening in November.
“Risks stemming from supply disruption, rising inflation, and weak investment are the highest three risks to be addressed urgently in relation to scarring from the pandemic,” it said, highlighting the necessity for global cooperation including the gradual reopening of borders to support revival of trade.
“We have all got some version of an inflation problem and rising rates of interest as well, so the entire world has an interest in making progress here,” Australia Treasurer Jim Chalmers told CNBC’s Martin Soong. “Conditions are high risk they usually are volatile,” he said.
