Berliner Boersenzeitung - Brazil urges 'new globalization' at G20 meet overshadowed by Ukraine war

The Ukraine war took center stage even before finance ministers from the Group of 20 nations opened their first meeting of the year in Sao Paulo, as Western countries met on the sidelines to discuss shoring up their support against Russia's invasion.

Officials said the meeting of the Group of Seven countries -- Britain, Canada, France, Germany, Italy, Japan and the United States, plus the European Union -- focused largely on plans to use frozen Russian assets to increase aid for Kyiv, which US Treasury Secretary Janet Yellen said Tuesday was "necessary and urgent."

Yellen, German Finance Minister Christian Lindner, IMF chief Kristalina Georgieva and other top economic policy-makers are in the Brazilian economic capital for the two-day meeting -- although there are some notable absences, including the Chinese, Indian and Russian finance ministers.

Brazilian Finance Minister Fernando Haddad, the host, addressed the meeting by video conference, after coming down with Covid-19.

Haddad sought to put the focus on Brazil's priorities for its rotating presidency of the G20 this year: fighting poverty and climate change, alleviating low-income nations' crushing debt burdens, and giving developing countries more say at institutions like the International Monetary Fund and World Bank.

"We need to understand climate change and poverty as truly global challenges to be confronted with a new globalization," Haddad said.

"It is time to redefine globalization. We need to create incentives to ensure international capital flows are no longer decided by immediate profit but by social and environmental principles."

International taxation will also feature on the agenda, amid global wrangling on how to deal with a so-called "race to the bottom" where some countries woo corporations and the super-rich with ultra-low tax rates.

The meeting, which follows one by foreign ministers in Rio de Janeiro last week, will lay the economic policy groundwork for the annual G20 leaders' summit, to be held in Rio in November.

- G7 targets Russian assets -

The G7 meeting focused on bolstering flagging Western support for Ukraine, which is desperate for more aid to fend off Russia.

The G7 looks close to announcing plans to jointly set up a fund for Ukraine using profits generated by an estimated $397 billion in Russian assets frozen by the West over Moscow's invasion.

But French Finance Minister Bruno Le Maire said more work was needed to seize the assets themselves, as some top officials, including Yellen and British Prime Minister Rishi Sunak, have proposed.

"We need to take any action to make sure that the conflict in Ukraine will lead to a victory for the Ukrainian people," Le Maire told journalists.

But "I want to be very clear: We don't have the legal basis for seizing the Russian assets now. We need to work further... The G7 must act abiding by the rule of law," he added.

"We should not add any kind of division among the G20 countries... at a time when we need more unity to support Ukraine."

Ukraine has warned it is in dire need of more military and financial assistance, with a fresh $60 billion US package stalled in Congress.

Founded in 1999, the G20 accounts for more than 80 percent of global gross domestic product (GDP), three-quarters of world trade, and two-thirds of the world's population.

In reality, it has 21 members: 19 of the world's biggest economies -- including both industrialized nations and emerging powers -- plus the European Union and, participating as a member for the first time this year, the African Union.

(H.Schneide--BBZ)