Finance Minister Taro Aso on Monday called for cooperation among leaders of the world’s leading economies to stem the flow of illicit funds to terrorist groups, following the recent murder of Japanese nationals Haruna Yukawa and Kenji Goto at the hands of Islamic State militants.
Speaking to reporters after the first day of the two-day G-20 gathering in Istanbul, Aso said: “I told (the G-20 finance chiefs) that it is necessary for each country to ramp up efforts” to deal with illegal financial activities.
The G-20 meeting in Istanbul is the first since the terrorist attacks in Paris, and the first since the killing of the two Japanese hostages in the Middle East.
The G-20 proposals for tackling terrorism are based on reports by the Financial Action Task Force, an intergovernmental body aimed at eliminating terrorist financing, sources close to the matter said.
Ahead of the meeting, Aso held talks with and thanked Turkish Deputy Prime Minister Ali Babacan for his country’s support in dealing with the hostage crisis, Japanese government officials said.
Turkey played a key role in negotiations, as it is located close to both Syria and Iraq, parts of which are under Islamic State control.
In separate talks, Aso and French Finance Minister Michel Sapin also agreed on the need for extra measures to cut off funding for terrorism, officials said.
Aso, meanwhile, announced that Japan is planning to supplement its humanitarian support for refugees in the Middle East with additional shipments of food and medical supplies.
On the macroeconomic front, G-20 finance chiefs discussed how to prop up growth at a time when a slowdown in the eurozone economy and a plunge in crude oil prices have soured the outlook for the global economy.
It is speculated that G-20 finance ministers as well as central bank governors are likely to agree on measures aimed at accelerating economic growth strategies hammered out late last year in Australia.
The G-20 members are meeting after the International Monetary Fund in January cut its 2015 growth forecast for the world economy to 3.5 percent, down 0.3 percent on a previous estimate.
The eurozone in particular has been struggling to prevent its economy from deteriorating further in the wake of the anti-austerity Syriza party’s victory in Greek elections — an event that sent shock waves through the EU.
At the G-20 gathering, Europe is likely to be asked to persuade Greece to remain in the eurozone, as its departure would have a great impact on the global economy and financial markets, the sources said.
Since crude oil prices started to slide last year, many G-20 members, including EU member states as well as Japan, China, Russia and Australia, have adopted monetary easing, as inflation expectations have significantly fallen.
Some G-20 nations might express wariness about “competitive currency devaluations,” which may increase volatility in financial markets and trigger rapid inflation worldwide, the sources said.
Bank of Japan Gov. Haruhiko Kuroda told reporters earlier Monday that he is “not worried at this point” that credit easing by central banks such as the BOJ and the European Central Bank would have a negative effect on the global economy.
The benchmark contract of Brent crude oil futures has sunk by over 50 percent from a peak of about $110 in June last year.
The G-20 countries are also expected to exchange views on geopolitical risks in the Middle East and Ukraine during the two-day meeting.
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