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Business News/ News / India/  G20 agree on debt resolution of weak countries; Russia, China do not back condemnation of war on Ukraine
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G20 agree on debt resolution of weak countries; Russia, China do not back condemnation of war on Ukraine

With the two nations not agreeing on two paragraphs on the war taken from the G20 Bali Leaders’ Declaration last November, which highlighted the war's impact on global economic recovery

India's Finance Minister Nirmala Sitharaman speaks during a news conference at the end of G20 finance ministers' and Central Bank governors' meeting (REUTERS)Premium
India's Finance Minister Nirmala Sitharaman speaks during a news conference at the end of G20 finance ministers' and Central Bank governors' meeting (REUTERS)

G20 finance ministers and central bank governors on Saturday agreed on the language for debt resolution of vulnerable countries and decided to set up a panel to review multilateral development banks but China and Russia did not agree on parts of the meeting's outcome document condemning Russia's war on Ukraine, finance minister Nirmala Sitharaman who co-chaired the meeting told reporters.

With the two nations not agreeing on two paragraphs on the war taken from the G20 Bali Leaders’ Declaration last November, which highlighted the war's impact on global economic recovery, the leaders opted for a 'G20 chair’s summary and outcome document' rather than a communique.

The Bali declaration had said that most members strongly condemned the war in Ukraine and stressed it was causing immense human suffering and exacerbating fragilities in the global economy. The declaration had said the war was constraining growth, increasing inflation, disrupting supply chains, heightening energy and food insecurity, and elevating financial stability risks.

"With a footnote, certainly a communique cannot go out, and therefore it had to be a chair summary and outcome document," Sitharaman said.

"One of the successes of the negotiations, particularly for the chair summary and outcome document, was to have arrived at a common position on the debt language.... It is important to emphasise on that because vulnerable countries are looking at some solutions so that their debt stress can be relieved," Sitharaman said.

"I think the G20 is now standing up to meet the challenges of debt stress which many countries are facing. Four countries would get benefit from a quick response from international institutions," the minister said.

Sitharaman said that Chad, Ghana, Suriname and Sri Lanka will benefit from the G20 agreement on the language on debt resolution and that work is already on in the case of these countries.

Finance ministers from China, Mexico, Russia and Turkey virtually attended the two-day finance ministers and central bank governors meeting which concluded in Bengaluru on Saturday.

Sitharaman said that India has always tried to make efforts to be the voice of the global south and that Prime Minister Narendra Modi had held consulted the global south countries on virtual mode.

Sitharaman also said Modi had urged the leaders, custodians of the leading economies and monetary systems of the world, to bring back stability, confidence and growth to the global economy.

G20 leaders discussed the issue of strengthening multilateral development banks so that they can attend debt vulnerabilities, mobilise timely and adequate finance.

The meeting also focused on sustainable development goals for which mobilising finance, especially for climate action, was the main focus. Digital public infrastructure, sustainable cities for tomorrow, financial inclusion and productive gains were also discussed by world leaders.

"Ministers and governors reiterated the need for well calibrated, monetary, fiscal, financial and structural policies to promote macroeconomic and financial stability and to maintain growth momentum," Sitharaman said.

On debt vulnerability, a roundtable was hosted on the sidelines. The objective was to bring together a diverse set of stakeholders to collaborate. Participants comprised official bilateral creditors, debtor countries and private creditors.

India got support for its proposal for an expert panel to provide an updated vision of multilateral development banks capable of dealing with trans-boundary challenges. The panel is mandated to give its report in three months so that it can be considered in July.

Although there was only an outcome statement and no communique, Sitharaman said, the meeting still made progress.

The finance ministry said in a social media post that it was a significant achievement by G20 under India's Presidency, on subjects ranging from global debt crisis, multilateral development bank reforms, climate finance, global approach on cryptos, digital public infrastructure, financial inclusion, financing cities of tomorrow, and taxation.

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ABOUT THE AUTHOR
Gireesh Chandra Prasad
Gireesh has over 22 years of experience in business journalism covering diverse aspects of the economy, including finance, taxation, energy, aviation, corporate and bankruptcy laws, accounting and auditing.
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Published: 25 Feb 2023, 09:21 PM IST
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