The World Health Organization senior advisor of the Director General Bruce Aylward (fourth right) and the World Bank managing director Axel van Trotsenburg (third right), and other participants listen to the opening address by Indonesian President Joko Widodo (on screen) during the opening of the G20 finance ministers’ meeting in Jakarta on Feb 17, 2022. (BAY ISMOYO / POOL / AFP)

JAKARTA/TOKYO – The crisis in Ukraine overshadowed a gathering of finance leaders from the world's top 20 economies that kicked off on Thursday, with host Indonesia's president warning "now is not the time" to create new risks to a fragile global recovery. 

Russia's military presence at Ukraine's borders have led to one of the deepest crises in East-West relations for decades, jolting financial markets and adding to the headwinds facing a global economy still emerging from the COVID-19 pandemic. 

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Geopolitical risks and the economic fallout from the pandemic will likely be among key topics of debate at the G20 finance leaders' meeting, 

as well as rising global inflation and tighter monetary policy in some regions. 

In a situation like now, it is not the time for rivalry. 

Joko Widodo, President, Indonesia

Joko Widodo, president of host country Indonesia, urged G20 nations to focus on collaboration to revive a global economy that is "still shaken" from the pandemic. 

"In a situation like now, it is not the time for rivalry," he said in opening remarks at the G20 meeting, which many ministers are attending online due to the pandemic. 

"It is not the time to create a new tension that disrupts the global recovery, especially one that endangers the safety of the world like what is happening in Ukraine now." 

Analysts, however, warn the diverse membership of the G20 may make policy coordination hard. 

The G20 finance leaders are expected to issue a communique after their two-day meeting ends on Friday. 

As the US Federal Reserve eyes raising interest rates and some of its counterparts seen following suit, the G20 finance leaders are likely to call on major central banks to communicate their intentions clearly to prevent causing big market swings. 

The G20 policymakers are also expected to warn emerging nations to brace for potential market fallout from monetary tightening in major economies, according to a document with the agreed position of European G20 members, seen by Reuters. 

"Divergent economic recovery may have significant implications, since it can lead to a different pace of policy normalization and potentially create a tighter global financial condition," Indonesian Finance Minister Sri Mulyani Indrawati told the G20 finance leaders. 

"In this regard, global coordination, including a discussion on exit strategy, will be critical," she said. 

(SONG CHEN / CHINA DAILY)

The G20 faces the difficult task of navigating policy amid global divergences in the pace of recovery from the pandemic. 

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While COVID-19 Omicron variant cases are receding in many wealthy countries, they are still rising in many developing nations including host Indonesia. 

The International Monetary Fund warned on Wednesday that downside risks continued to dominate, as renewed mobility restrictions in some countries and supply-demand mismatches likely to drag on growth. 

The IMF has said it will seek G20 support for strengthening a debt restructuring framework for poor countries as default risks rise and demands for easier debt terms increase. 

US Treasury Secretary Janet Yellen will urge her G20 counterparts to help international organizations address bottlenecks in the deployment of vaccines, and support investment in pandemic prevention, a US Treasury official said on Tuesday.