In an effort to shore up the sagging global economy, G20 finance ministers and central bank chiefs began talks on Monday on debt restructuring deals, multilateral bank reform and finance to tackle climate change.
The meeting was held in Gandhinagar city of Gujarat under the chairmanship of Indian Finance Minister Nirmala Sitharaman. AFP informed of.
Addressing the meeting, Sitharaman said: “It is our responsibility to steer the global economy towards strong, sustainable, balanced and inclusive growth.”
Speaking to reporters along with US Treasury Secretary Janet Yellen, Sitharaman said the key issues on the two-day agenda would be “facilitating consensus on the complex issues surrounding rising indebtedness”.
The talks will also focus on “important global issues such as strengthening multilateral development banks and coordinated climate action”, Sitharaman said.
“As part of our work to strengthen the global economy, the world looks to the G20 to make progress on key challenges such as climate change and the pandemic,” Yellen said.
He also cited work done to address the debt crisis among the world’s poorest countries, noting progress on debt restructuring in Zambia, which he discussed during a visit to Beijing this month.
Italian Finance Minister Giancarlo Giorgetti said targeted interventions should “protect the most vulnerable sections of the population and boost investment to increase the capacity of our economies against the risk of recession”.
Officials said China, the world’s second-largest economy and a major lender to many stressed, low-income countries in Asia and Africa, has so far resisted a common multilateral understanding on the issue.
Yellen said on Sunday that the Zambia deal “took too long to negotiate”, and that she hoped debt treatment for Ghana and Sri Lanka “can be finalized quickly”.
“Instead of starting from scratch each time, we must apply the general principles that were agreed upon in the case of Zambia to other cases,” Yellen said. “And we must move fast.”
More than half of all low-income countries are close to debt or in distress, Yellen said, double the case in 2015.
Many economies are struggling after the double whammy of the COVID pandemic and the fallout from Russia’s war in Ukraine – which hit global fuel and commodity prices.
China is a major creditor in some of these cases and has faced criticism for its stance on debt restructuring of nations.
The Group of 20 major economies will also discuss reform of multilateral development banks, cryptocurrency regulations, and access to finance to mitigate climate change impacts and facilitate adaptation.
“In the global answer, climate change means cutting emissions,” World Bank chief Ajay Banga said in an op-ed ahead of the meeting.
“But in the Global South, it is a matter of survival, as storms are more powerful, heat-resistant seeds are in short supply, drought is destroying farms and towns, and floods are washing away decades of progress.”
A newly agreed first step on the fair distribution of tax revenue from multinationals by 138 countries last week is also set to be delivered.
Multinational companies, especially technology companies, are currently able to easily shift their profits to countries with low tax rates, even if they only conduct a small portion of their activities there.
But there are also concerns that advanced G7 member focus on Russia’s invasion of Ukraine could derail the final consensus agreement, although Yellen has said she will “bounce back” on criticism that Kiev and developing countries are being sidelined. There was an agreement between the aid.
Any discussion on Ukraine is strange for India, which has not condemned Russia’s aggression but is also part of the Quad grouping along with Australia, the United States and Japan.