G-20 finance leaders consider ways to support pandemic recovery

JAKARTA (AP) — Countries must avoid tensions and cooperate to support a recovery from the pandemic as it lingers in many parts of the world, Indonesian President Joko Widodo said Thursday at a gathering of top financial leaders from the largest economies in the world.

“Winter is coming,” Widodo said as he welcomed finance ministers and central bank chiefs from the Group of 20 industrial nations.

“The pandemic is far from over and the global economy is struggling,” he said. “In this situation, no country could recover alone. All countries are interconnected, no one is isolated.”

The G-20 financial rally comes as many economies tread a precarious path between raising borrowing costs to curb inflation and helping to support the post-pandemic recovery.

Worries about a potential conflict in Ukraine are an additional source of unwanted uncertainty, Widodo said, warning against antagonisms at this time.

“Now is not the time to create new tensions that could affect global recovery, let alone jeopardize world peace as we have seen in Ukraine right now,” he said. “It is necessary for each side to end rivalries and frictions.”

Officials were attending the meetings in person and online, given travel and quarantine concerns due to outbreaks, primarily of the omicron variant of the coronavirus, that plague many countries.

Host Indonesia is among several countries in Southeast Asia that have suffered severe waves of infections, although vaccinations have helped quell the worst outbreaks.

The fourth most populous nation with 274 million people, it has reported nearly 5 million cases and 145,622 deaths. In the past month, 690,518 new cases have been reported.

Speaking at a seminar on strengthening global health systems, US Treasury Secretary Janet Yellen noted that public health is vital for economic growth. She urged countries to provide the $75 billion needed over the next five years to fill the gaps in funding for better health care.

A fund hosted by the World Bank could channel investments to where they are needed most, she said.

“We don’t see this as a reserve of money sitting idle to respond to the next pandemic,” Yellen said. Instead, it would be used to fill existing gaps to prevent and prepare for future crises.

Indonesia is the world’s 10th largest economy and is located in the fastest growing region – at least before the pandemic swept the world, disrupting business and travel while killing nearly 6 million people.

Soaring food and energy prices are among the challenges facing financial leaders as they discuss how best to foster a global economic recovery, Indonesian Finance Minister Sri Mulyani Indrawati said. to G-20 participants.

“Inflation risk remains skewed to the upside, driven by supply chain disruptions, labor market mismatches, wage pressure and rising energy prices,” he said. she said, adding that these issues were “more persistent than expected.”

The International Monetary Fund has forecast global economic growth to slow to 4.4% in 2022, from 5.9% in 2021, after contracting 3.3% in 2020.

Mulyani stressed the need for coordination between countries at different stages of recovery.

The US Federal Reserve is withdrawing its massive support for markets and businesses, preparing to raise interest rates as early as next month to cool inflation which jumped to 7.5% in January, the highest rate in 40 year.

Consumer prices hit a record 5.1% in the 19 countries that use the euro last month and an almost 30-year high in the UK.

The Indonesian central bank has also taken measures to curb inflation. But some other economies have yet to rebound from the devastation wrought by the pandemic.

“Countries’ national macroeconomic policy can also have negative effects on other economies,” Mulyani said. “In this regard, global coordination, including a discussion on the exit strategy, will be essential.”

In the meantime, she noted that ensuring countries have equitable access to vaccines remains an urgent priority to limit new variants of the virus and end the pandemic.

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AP Business Writer Elaine Kurtenbach in Bangkok and Edna Tarigan in Jakarta contributed.