Among supporting developing economies and addressing financial hardship, Treasury Secretary Janet Yellen has stressed redoubling support for war-torn Ukraine as the “single best” option to improve the global economy. In addition, she justified the tradeoff between aid to Ukraine and developing nations, saying that stopping the war is a humanitarian necessity and the most significant thing we can do for the world economy.
Yellen cautioned against premature discussion of lowering tariffs on China and underlined measures to address financial distress experienced by weak nations, bank reform, and a global tax arrangement.
Russia’s invasion of Ukraine sent shockwaves across the global economy, driving up the cost of necessities like food and gas. Finance Minister Shunichi Suzuki of Japan affirmed the G7’s unwavering support for Ukraine, saying that G7-supervised assets owned by Russia would not be transferred until damages to Ukraine and long-term rehabilitation expenses were paid for by Russia. Despite being a member of the Quad with the United States, Australia, and Japan, G20 host India has not criticized Russia’s incursion, making this conversation uncomfortable.
Yellen also said that debt restructuring was proceeding in Zambia, a topic she and Chinese officials had discussed during her visit to Beijing last week, and that she anticipated debt remedies in Ghana and Sri Lanka would soon be finished. She argued that it was too early to relax sanctions imposed on China during the trade war started by President Trump. She cautioned against attempting to de-escalate the situation at this time.
Yellen stated that reforming multilateral development banks like the World Bank and other regional lenders might free up $200 billion over the next decade by alleviating debt distress. More than twice as many low-income nations as in 2015 are in or approaching debt trouble.
Gandhinagar, Gujarat, the birthplace of Indian freedom leader Mahatma Gandhi, will host the upcoming meeting of the Group of Twenty (G20) finance chiefs and central bank leaders. The climate change catastrophe, post-pandemic recovery efforts, the war in Ukraine, and the lack of progress in the battle against poverty are all examples of what World Bank head Ajay Banga called “deep mistrust” between the Global North and South. The IMF has stressed the need for concerted action to strengthen the world economy, including measures such as cryptocurrency rules and helping poor countries have better access to credit to counteract and adapt to the effects of climate change.