NIIGATA: The G7 is planning to start a partnership scheme for the diversification of supply chains this year, the group’s finance chiefs said in Japan ahead of a big summit next week.
The finance ministers did not directly cite a desire to decrease reliance on trade with Russia or China as motivation for the scheme focusing on clean energy technology. But the United States (US) has led a push for export restrictions on the chip components to China, citing national security reasons, and US Treasury Secretary Janet Yellen has talked about recent shocks to the world economy.
She told reporters that spillovers from the Russia-Ukraine war and disruptions caused by the Covid-19 pandemic had clarified the necessity of diversified and resilient supply chains. Japan’s Finance Minister Shunichi Suzuki also said the pandemic had revealed the downside of supply chains being too concentrated in one place.
Finance Ministers, central banks’ heads statement
In a joint statement, the G7’s finance chiefs and central banks’ heads said they hoped to start the partnership in collaboration with the World Bank (WB) by the end of 2023 at the latest. The initiative, dubbed RISE (Resilient and Inclusive Supply-chain Enhancement) is based on guidance released in April and would offer interested developing nations knowledge, finance, and partnerships. It has not been disclosed how much would be spent on the scheme?
The 3-day meeting in Niigata took place a few days before the leaders of the big developed economies — including Germany, Britain, Canada, France, Italy, and the European Union (EU) — gathered in Hiroshima.
Support for Ukraine and the G7’s ties with China are likely to be high on the agenda at the summit, which will run from 19 to 21 May, along with action on climate change and nuclear disarmament. –AFP
