Turkey conducts intense diplomacy as G-20 meet ends with few breakthroughs

The Turkish finance minister’s trip to Indonesia was packed with intense diplomatic contact while visiting the country to attend G-20 meetings that ended with few policy breakthroughs.

The two-day summit on the Indonesian resort island of Bali closed on Saturday with pledges to address global food insecurity and rising debt, but failed to bridge differences over Russia’s war in Ukraine.

Turkey’s Treasury and Finance Minister Nureddin Nebati held multiple meetings with his counterparts, including U.S. Treasury Secretary Janet Yellen, to discuss bilateral relations and investments.

“We underlined that efforts should be continued with determination in order to realize the potential of our commercial relations and to further increase our mutual investments,” Nebati wrote on Twitter after Saturday’s meeting.

The talks also focused on developments in the global economy, including the soaring energy and commodity prices, energy supply and food security, according to information provided by the Treasury and Finance Ministry.

Yellen reportedly expressed appreciation regarding Turkey’s efforts on food security, days after Russia, Ukraine, Turkey and United Nations officials met in Istanbul for talks aimed at resuming Ukraine’s grain exports. Turkey announced that the parties would return this week to sign a deal.

The sides said recent high-level contacts had added impetus to the bilateral relations between the two countries, agreeing this momentum should be preserved.

Among others, Nebati held talks with his Canadian counterpart Chrystia Freeland, as well as the finance chiefs of South Africa, Enoch Godongwana, and the United Arab Emirates (UAE), Mohammed bin Hadi Al Husseini.

During the meeting with Freeland, Nebati said they stressed the need to strengthen cooperation between the two allies, as well as the need to increase mutual commercial, political and economic high-level contacts.

Talks with Godongwana focused on economic and trade relations, emphasizing the importance of developing relations, particularly in the fields of industry and technology.

The meeting with Al Husseini stressed the importance of mutual cooperation on bilateral and multilateral platforms as two important countries of the region, Nebati said.

He added that “we stated that working together both on a bilateral basis and in a regional context will make a positive contribution to the prosperity and stability of both our countries and our region.”

G-20 divisions over Ukraine war

Financial leaders of the Group of 20 richest and biggest economies agreed at the meetings in Indonesia on the need to jointly tackle global ills such as inflation and food crises, but made few policy breakthroughs amid divisions over the war in Ukraine.

With questions growing about the effectiveness of the G-20 in tackling the world’s major problems, Yellen said the differences had prevented the finance ministers and central bankers from issuing a formal communique but that the group had a “strong consensus” on the need to address a worsening food security crisis.

As G-20 host this year, Indonesia has sought to bridge divisions between G-20 members over Russia’s invasion, but enmity over the conflict was evident even as the finance ministers and central bank chiefs concurred on other global challenges that have been worsened by the war.

All involved agreed the meeting took place “under a very challenging and difficult situation because of the geopolitical tensions,” Indonesian Finance Minister Sri Mulyani Indrawati said Saturday.

She said delegates had “expressed sympathy that Indonesia has to manage this situation.”

Indrawati and Indonesian central bank Governor Perry Warjiyo said Indonesia would later release a G-20 chair’s statement that would include two paragraphs describing areas where the participants failed to agree.

There were still issues that could not be reconciled, “because they want to express their views related to the war,” Indrawati said. In the statement “related to the war there are still views that are different within the G-20,” she said.

Indrawati outlined a range of areas where the members did agree, including the need to improve food security, support the creation of a funding mechanism for pandemic preparedness, prevention and responses, on working toward a global tax agreement and on facilitating the financing of transitions toward cleaner energy to cope with climate change.

“The progress is more than expected,” Warjiyo said.

With inflation running at four-decade highs – U.S. consumer prices were up 9.1% in June – Warjiyo said participants were “strongly committed to achieving price stability.”

“There is a commitment among the G-20 to well-calibrated macroeconomic policy to address inflation and slowing growth,” he said.

The meetings in Bali follow a gathering of G-20 foreign ministers earlier this month that also failed to find common ground over Russia’s war in Ukraine and its global impacts.

During the talks that began Friday, Yellen condemned Moscow for “innocent lives lost and the ongoing human and economic toll that the war is causing around the world.”

“Russia is solely responsible for negative spillovers to the global economy, particularly higher commodity prices,” she said.

“This is a challenging time because Russia is part of the G-20 and doesn’t agree with the rest of us on how to characterize the war,” Yellen said, but stressed that disagreement should not prevent progress on pressing global issues.

Russia’s finance minister attended the meeting virtually while his deputy attended in person. Ukraine’s finance minister addressed the session virtually too, where he called for “more severe targeted sanctions.”

Canada’s Freeland likened the attendance of Russian officials at the meetings to having “an arsonist joining firefighters.” War is waged by economic technocrats, as well as generals, she said in a post on Twitter.

Russian officials reportedly blamed Western sanctions over the war for worsening inflation and food crises.

Indrawati said the closed-door G-20 talks did not include discussion of proposals for a price cap on Russian oil – one of Yellen’s key objectives as the U.S. and allies seek to curb Moscow’s ability to finance its war.

Such discussions would have occurred on the sidelines of the meeting, she said.

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