GANDHINAGAR, India: G20 finance and central bank chiefs are set to start discussions today (Monday), with a focus on debt restructuring agreements and the establishment of more equitable international tax arrangements.
The primary objective is to consolidate global economy that has been languishing in recent times.
Under the guidance of India’s Finance Minister, Nirmala Sitharaman, the conference will encompass a wide range of topics, including an assessment of the global economy’s health and deliberations on “sustainable finance and infrastructure,” as highlighted by the event’s hosts, according to a local newspaper.
A crucial item on the two-day agenda will be addressing the distress caused by mounting debt, primarily affecting the world’s poorest nations, which are currently grappling with the global debt crisis. Paradoxically, these countries require more financial resources than ever to combat the urgent issue of climate change.
However, officials have revealed that China, the second-largest global economy and a significant lender to numerous economically strained, low-income nations across Asia and Africa, has thus far resisted the idea of a collective multilateral agreement to tackle this matter.
During the G20 talks held in the Indian city of Gandhinagar on Sunday, US Treasury Secretary Janet Yellen expressed optimism about the progress made in debt restructuring negotiations in Zambia, a topic she had discussed during her recent visit to Beijing. Yellen noted, though, that the negotiations in Zambia had taken an exorbitant amount of time, emphasizing the importance of promptly finalizing debt treatments for Ghana and Sri Lanka.
Yellen stressed the necessity of adhering to the common principles established during Zambia’s case in order to expedite the resolution of similar situations in the future, rather than starting from scratch each time. She urged for swift action, stating, “And we must go faster.”
Yellen further revealed that more than half of all low-income countries are currently on the brink of or experiencing severe debt distress, doubling the figures from 2015.
A senior official from the host country, India, expressed disappointment over China’s lukewarm response regarding a collective understanding of shared debt. This tepid stance by Beijing comes at a time when numerous economies are teetering on the edge due to the dual impact of the ongoing COVID-19 pandemic and the repercussions of Russia’s conflict in Ukraine, which have adversely affected global fuel and commodity prices. In many instances, China stands as a major creditor and has faced criticism for its position on debt restructuring for nations in need.
