This mechanism provides financial assistance to middle and low-income countries, exchanging skills and establishing partnerships with them to help them assume an increasingly important role in this basic mechanism of the global industry, according to a statement issued by finance ministers from the seven countries after a three-day meeting in Niigata, central China.
The mechanism, the main lines of which were revealed in April, will be implemented in cooperation with the World Bank and other relevant international organizations, according to the press release.
Japanese Deputy Finance Minister Masato Kanda told reporters that the amount of money that will be allocated to the mechanism of “strengthening a resilient and inclusive supply network” or “Rise” according to his initials in English has not yet been determined.
In practice, Rise is supposed to help countries, for example, not only extract raw materials for industry, but also give them the ability to process them locally, which will, to some extent, avoid having to resort to China. to perform such services.
This policy is based on a concept common to the seven countries which aims to reduce the risks on the supply networks without causing a “decoupling” with China.
The seven finance ministers did not portray the new instrument as anti-China, nor did they mention China in their statement.
Preparatory meeting for the Hiroshima summit
“Diversifying supply networks can help protect energy security and help us maintain macroeconomic stability,” the G7 finance ministers said.
Japan’s Finance Minister Shunichi Suzuki told a press conference that “the (Covid-19) pandemic has shown us the drawbacks of the high concentration of supply networks in one place”, after the prolonged quarantine and lockdown measures in China last year caused great confusion. in the global industry.
The seven ministers reaffirmed their “unwavering” support for Ukraine, condemning the “illegal and unjustified war of aggression” waged by Moscow.
They announced an increase in financial and economic support for Ukraine to 44 billion dollars (40 billion euros) for the years 2023 and the beginning of 2024, from 39 billion dollars (35.5 billion euros), according to figures released in February.
They underlined their countries’ determination to “face any attempt” to circumvent the economic and financial sanctions they have imposed on Russia, without announcing any new specific measures in this regard.
The Niigata meeting, which was also attended by central bank governors from the seven countries and officials from major organizations such as the International Monetary Fund and the World Bank, touched on a number of other topics, including concerns about the banking sector and the fight against climate change heating up.
The meeting was overshadowed by the current stumbling blocks in the negotiations in the United States Congress on raising the American public debt ceiling, which raise fears that Washington will pay off its debt for the first time this summer, without this file being one of the topics that was discussed.
The three-day meeting served mainly as a forum for informal exchange of views ahead of the Group of Seven leaders’ summit at the end of next week in Hiroshima, western Japan.
The summit will be dominated by issues of support for Ukraine, the continuation of sanctions against Russia, relations with China and the resilience of the economy.
Anticipation is centered on the question of financing the G7 so that developing countries support them, particularly in their energy transition, and help them limit the consequences of global warming on their economies and their peoples.
In this regard, an international summit is planned to adopt a global “new financial pact” to deal with the climate challenge at the end of June in Paris, in an important station to create momentum in this area before the Conference of the Parties on the climate “COP 28”. scheduled for the end of the year.
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