G20 Finance Ministers Meet to Discuss Climate Action in Gujarat and Debt Restructuring

To support a flagging global economy, G20 finance ministers and central bank governors began discussions on debt restructuring agreements, multilateral bank reform, and financing to combat climate change on Monday. The summit’s chair and host, Finance Minister Nirmala Sitharaman, opened by reminding the attendees of their obligation to “direct the global economy toward strong, sustainable, balanced, and inclusive growth.”

Sitharaman and US Treasury Secretary Janet Yellen told reporters earlier on Monday that “facilitating consensus to intractable issues associated with rising indebtedness” will be a major focus of the two-day meeting. Sitharaman stated that discussions would also center on “critical global issues like bolstering the multilateral development banks and taking coordinated climate action.”

Yellen also emphasized efforts to alleviate financial distress in the world’s poorest nations, pointing to Zambia’s success in debt restructuring, which she had also mentioned during her visit to Beijing earlier this month.

China, the second-largest economy in the world and a significant lender to a number of struggling, low-income nations in Asia and Africa, has so far opposed a general international consensus on the matter, according to officials.

On Sunday, Yellen said the Zambia agreement had taken “too long to negotiate” and expressed her hope that the debt relief plans for Ghana and Sri Lanka could be “quickly finalized.” In other circumstances, Yellen added, “we should apply the common principles we agreed to in the case of Zambia, rather than starting at zero every time.” We must advance more quickly.

The number of low-income nations that are close to or in financial trouble has doubled since 2015, according to Yellen. There has been a “not so encouraging response” from Beijing on the shared debt agreement, according to a senior official from G20 chair India.

Following the combined blow of the coronavirus epidemic and the effects of Russia’s conflict in Ukraine, which affected the price of commodities and petroleum globally, some economies have suffered. In several of these situations, China is a significant creditor and has come under fire for its stance on countries’ debt restructuring.

Climatology Finance

The reform of multilateral development banks, cryptocurrency laws, and facilitating access to funding to lessen and adapt to the effects of climate change will also be on the agenda for the Group of 20 major countries.

In an opinion piece written before the conference, World Bank President Ajay Banga said that “climate change means emissions reductions in the Global North.”

However, in the Global South, it is a question of survival due of greater storms, a lack of heat-resistant seeds, a drought that is killing cities and farms, and floods that are wiping out decades of advancement.

Additionally, a first step toward a fairer allocation of tax income from multinational corporations will be provided that was recently agreed upon by 138 nations.

Even if they only conduct a tiny portion of their operations abroad, multinationals, particularly internet companies, are already able to move earnings to nations with low tax rates with ease.

Although Yellen has said she would “push back” on allegations that there was a tradeoff between assistance to Kyiv and poor nations, there is also fear that the developed G7 member countries’ attention on Russia’s invasion of Ukraine may jeopardize a final consensus accord.

Shunichi Suzuki, the finance minister of Japan, said on Sunday that the G7 “reconfirmed its unwavering support” for Ukraine, adding that Moscow should “pay long-term reconstruction costs.”