Finance ministers and central bank governors from the Group of 20 (G20) nations are convening in Bangkok, Thailand, to address the economic challenges posed by the ongoing US-Israel conflict with Iran. The meetings, which coincide with the annual gatherings of the International Monetary Fund (IMF) and the World Bank from October 12 to October 18, are taking place amid heightened global economic uncertainty and rising energy prices.

The conflict has significantly disrupted economic activities across the Middle East, particularly affecting shipping routes in the Strait of Hormuz, a critical passageway for global oil supplies. As a result, crude oil prices have surged above $100 a barrel for much of the past eight months, impacting government budgets and household expenses worldwide, especially in the Gulf region and Asia.

The absence of US Treasury Secretary Scott Bessent, who cited “domestic engagements” for his decision not to attend, is notable, given the United States’ role as the world’s largest economy and the current G20 chair. Instead, the US delegation is led by Deputy Secretary Francis Brooke and Undersecretary for International Affairs Erin Browne. Bessent’s absence could influence the discussions, particularly as the US has been vocal about addressing global trade imbalances, which it attributes partly to China’s state-driven economic policies.

Australia’s Treasurer Jim Chalmers has expressed intentions to use the G20 platform to advocate for an end to the Middle Eastern conflicts and the reopening of the Strait of Hormuz, emphasizing the global economy’s need for stability. “The war in the Middle East is having a devastating economic impact and is pushing up fuel prices, inflation, and interest rates around the world,” Chalmers stated.

The agenda for the G20 meetings is expected to focus heavily on the economic repercussions of the conflict, including the rising debt levels of several G20 countries, such as the US, Canada, Japan, Italy, and France, where debt exceeds 100 percent of GDP. IMF Managing Director Kristalina Georgieva has warned that mounting debt poses a significant threat to the global economy, suggesting that governments may need to consider tax hikes or spending cuts to manage their fiscal challenges.

The discussions in Bangkok are also expected to address other pressing issues, such as the impact of “non-market policies and practices” on global trade, a topic highlighted by Bessent in his recent statement to the IMF. The US has long criticized China’s trade surplus, which reached $938 billion in September, as evidence of unfair trade practices that disadvantage American manufacturers.

The G20 meetings are a precursor to the leaders’ summit scheduled for December 14-15 in Miami, Florida, where further discussions on these critical economic issues are anticipated. The outcomes of the Bangkok meetings will likely influence the agenda and priorities for the Miami summit.

As the global economy grapples with the fallout from the US-Israel war on Iran, the G20 meetings in Bangkok represent a crucial opportunity for international cooperation and dialogue aimed at mitigating the economic disruptions and fostering stability in the global market.