In spite of the strong disagreements within their respective nations regarding Israel’s actions in Gaza, finance officials from the Group of 20 major economies are ready to put aside political differences and concentrate on worldwide economic matters during their upcoming meeting in Sao Paulo, Brazil.
Brazil is aiming for a productive meeting with consensus on important economic priorities. They have suggested a shorter closing statement, which has been discussed and agreed upon with other members, as stated by a source from the Brazilian government and another source familiar with the draft.
The country in South America currently holds the presidency of the G20.
According to sources, the most recent version of the draft, which is still being worked on, discusses the dangers of worldwide division and conflicts in broad terms, but does not specifically mention Russia’s invasion of Ukraine or the Israel-Gaza conflict.
Officials from the United States, China, Russia, and other major economies will gather in Sao Paulo to discuss the current state of the global economy. They will address concerns such as slowing growth, rising debt levels, and persistently high interest rates amidst fears that inflation is not under control.
Last month, the International Monetary Fund stated that there was a higher likelihood of a gentle decrease in inflation without causing a severe global recession, but cautioned that overall economic growth and international trade were below historical norms.
Two years ago, the invasion of Ukraine by Russia caused disruption within the G20, revealing underlying tensions within the group and preventing officials from reaching agreement on a final statement or communique during their meetings.
Before Brazil, India and Indonesia were in charge of the G20 presidency and chose to issue statements summarizing agreements and acknowledging disagreements from countries like Russia. However, even this could be challenging due to the deep divisions caused by the four-month war in Gaza. The conflict began when the ministers last gathered in Marrakech, Morocco in October, causing tensions between the United States and its Western allies, as well as non-Western countries in the G20.
Brazil, Saudi Arabia, and South Africa have strongly opposed Israel’s continuous attacks on Gaza following the surprise attack on October 7 by Hamas, which resulted in the death of approximately 1,200 people and the capture of 253 hostages, as stated by a source from the G7. The retaliatory strikes have led to the deaths of over 29,000 Palestinians, according to the Gaza health ministry.
Last week, the United States vetoed a proposed resolution in the United Nations Security Council regarding the conflict between Israel and Hamas. The resolution called for an immediate humanitarian ceasefire, but the U.S. countered by advocating for a temporary ceasefire that was contingent upon Hamas releasing all remaining hostages.
According to the Brazilian official, the significant disagreements regarding Gaza required a new strategy this year. The official stated that there would be no agreement if the topic was to be included.
To avoid disagreements over Gaza causing delays in addressing economic matters, Brazil suggested a shorter statement that did not refer to any specific conflicts. The United States opposed including language that would criticize Israel, while South Africa and other countries believed it was necessary to hold Israel accountable if the statement also condemned Russia’s actions in Ukraine, according to a source from the G7.
Brazil aims to center this week’s conversations on eradicating inequality, restructuring global taxation, tackling sovereign debt crises, and advancing sustainable development. The upcoming spring meetings of the IMF and World Bank in Washington in April will place a greater emphasis on reforms within multilateral banks and climate finance, as per a source from Brazil.
Mark Sobel, the U.S. chair of the Official Monetary and Financial Institutions Forum (OMFIF), suggested that removing discussions of geopolitics from the communique was logical for a group that traditionally concentrated on economic and financial matters.
He stated that while the disagreement may show conflict, it also demonstrates the overall commitment of finance ministers and central bankers to approach economic and financial issues in a technical manner.
A G7 official suggested that the statement would probably be brief and vague, addressing only topics that all members agree upon.
A senior U.S. official said that Janet Yellen, the U.S. Treasury Secretary, intends to emphasize the significance of the G20 group by emphasizing the joint initiatives taken to tackle worldwide issues like government debt and the COVID-19 crisis.
Yellen is set to meet with the Brazilian Finance Minister Fernando Haddad to commemorate 200 years of diplomatic relations between the U.S. and Brazil. Haddad stated that the event is intended to showcase Brazil’s commitment to avoiding conflict and instead, prioritizing collaboration and positive initiatives.
A key question that remains unanswered is how much influence the U.S., Japan, and Canada will have in pushing for a reference to the economic consequences of geopolitical conflicts in the communique, according to a high-ranking Brazilian official.
The official stated that the omission of the issue from the G20 foreign ministers’ agenda was a significant indication of failure.
The conclusion of the discussion among the sherpas has confirmed our belief that the subject of geopolitics should be omitted from the communique.
Eric Pelofsky, a previous high-ranking U.S. government official who now works at the Rockefeller Foundation, emphasized the importance of gathering for meetings like the G20, even when there are obvious disagreements.
Talking without achieving a desired outcome is still considered communication. This could lead to unexpected connections being made over a cup of coffee, revealing shared ground that was previously unknown.
