The crisis in Ukraine overshadowed a gathering of finance leaders from the world's top 20 economies that kicked off on Thursday, with host President Joko “Jokowi” Widodo warning "now is not the time" to create new risks to a fragile global recovery.

Russia's military presence at Ukraine's borders have led to one of the deepest crises in East-West relations for decades, jolting financial markets and adding to the headwinds facing a global economy still emerging from the COVID-19 pandemic.

Geopolitical risks and the economic fallout from the pandemic will likely be among key topics of debate at the G20 finance leaders' meeting, as well as rising global inflation and tighter monetary policy in some regions.

Jokowi urged G20 nations to focus on collaboration to revive a global economy that is "still shaken" from the pandemic.

"In a situation like now, it is not the time for rivalry," he said in opening remarks at the G20 meeting, which many ministers are attending online due to the pandemic.

"It is not the time to create a new tension that disrupts the global recovery, especially one that endangers the safety of the world like what is happening in Ukraine now."

Analysts, however, warn the diverse membership of the G20, consisting of the United States and its allies but also rivals China and Russia, may make policy coordination hard.

The G20 finance leaders are expected to issue a communiqué after their two-day meeting ends on Friday.

As the US Federal Reserve eyes raising interest rates and some of its counterparts seem to be following suit, the G20 finance leaders are likely to call on major central banks to communicate their intentions clearly to prevent causing big market swings.

The G20 policymakers are also expected to warn emerging nations to brace for potential market fallout from monetary tightening in major economies, according to a document with the agreed position of European G20 members, seen by Reuters.

"Divergent economic recovery may have significant implications, since it can lead to a different pace of policy normalization and potentially create a tighter global financial condition," Finance Minister Sri Mulyani Indrawati told the G20 finance leaders.

"In this regard, global coordination, including a discussion on exit strategy, will be critical," she said.

The G20 faces the difficult task of navigating policy amid global divergences in the pace of recovery from the pandemic.

While COVID-19 Omicron variant cases are receding in many wealthy countries, they are still rising in many developing nations including host Indonesia.

The International Monetary Fund warned on Wednesday that downside risks continued to dominate, as renewed mobility restrictions in some countries and supply-demand mismatches were likely to drag on growth.

The IMF has said it will seek G20 support for strengthening a debt restructuring framework for poor countries as default risks rise and demands for easier debt terms increase.

Also at the meeting, US Treasury Secretary Janet Yellen urged G20 members to back a proposed fund to invest in pandemic prevention and preparedness, warning that failure to close gaps in global health systems could result in "devastating" costs.

Yellen told finance ministers and central bankers from the world's 20 top economies that the new financial intermediary fund – to be hosted at the World Bank – would help channel the estimated $75 billion in investments needed to reduce global vulnerabilities to future pandemics.

"While the human and economic trauma of the pandemic is fresh in our minds, we have a political window to act to address the deficiencies in our global health architecture," she said, according to a text of her prepared remarks. "The cost of not doing so could be devastating."

In the remarks to be delivered remotely at the meeting, Yellen sought to dispel reservations raised by some G20 countries about the proposed fund, arguing that it would not siphon off funds needed to strengthen the World Health Organization, or create a new multilateral organization.

"We don’t see this as a pool of money that sits idly waiting to respond to the next pandemic," she said, adding that the new fund would help incentivize countries to invest in disease detection and surveillance systems to prepare for future crises.

Other investments could flow into research laboratories or help strengthen countries' healthcare workforces, she said.

The new fund's flexibility would also allow countries to mobilize additional resources from non-government sources for pandemic preparedness, she said.

"We should begin our work now to set up this fund so that it is ready to go as soon as possible," she said.

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