New Delhi: Finance Minister Nirmala Sitharaman said that discussions during the meeting of the G20 Finance Ministers and Central Bank Governors (FMCBG) had gained momentum in the second round held April 12-13 and expressed pleasure over the progress made regarding several of the key issues.
However, she did specify that there were no final takeaways as yet, instead referring to the outcomes as “possible takeaways”.
The FMCBG’s second meeting was held on the sidelines of the 2023 Spring meetings of the International Monetary Fund (IMF) and the World Bank, for which Sitharaman is in Washington. The first meeting of the FMCBG was held in Bengaluru, on 24-25 February.
The Finance Minister presented a wide range of topics that could be part of the final takeaways including the regulation of crypto assets, the restructuring of debt for low- and medium-income countries, international taxation frameworks, financial inclusion and climate finance.
“On this issue of takeaways, this is not final,” Sitharaman said during a press conference following the conclusion of the second meeting, late Thursday night India time. “As I stand today, the issue being discussed with a momentum being gained between February and now itself tells me that these could be possible takeaways. I am not saying they are the final takeaways.”
Also Read: Why India’s border standoff with China reveals Modi weakness. It’s the economy, stupid
Potential takeaways
Regarding the “possible takeaways”, the Finance Minister said the first one was about debt vulnerabilities.
“I am glad that it is moving fairly fast,” she said. “The Ministers and the Governors recognised the need to address debt vulnerabilities, including strengthening multilateral coordination towards addressing the debt distress in the low-income and middle-income countries.”
“The Global Sovereign Debt roundtable has brought in an avenue for people to talk about how we all will have to work towards addressing the issues of distress in so many countries,” she added. “A current global debt landscape is emerging, which is what I think is the first takeaway that I would put before you.”
The Global Sovereign Debt Roundtable (GSDR) met on 12 April, with Sitharaman representing India as the G20 President. IMF Managing Director Kristalina Georgieva and World Bank President David Malpass were co-chairs of the meeting.
“The discussion focused on the actions that can be taken now to accelerate debt restructuring processes and make them more efficient, including under the G20 Common Framework,” the Roundtable said in a statement.
“We agreed on the importance of urgently improving information sharing including on macroeconomic projections and debt sustainability assessments at an early stage of the process,” it added. “The IMF and World Bank will rapidly issue staff guidance on information sharing at each stage of the restructuring process.”
The second potential takeaway from the FMCBG meeting was the process of reforming the multilateral development bank setup, something India has been driving towards under its G20 Presidency. This endeavour, Sitharaman said, was “very well appreciated”.
“The issue of strengthening the multilateral development banks has received a lot of warmth and hopefully by July, we should have something on the table for members (of the FMCBG meeting) to discuss,” she said.
The third takeaway, the Finance Minister explained, was to do with climate finance and sustainable financing of climate and climate related matters. This included talks on bringing in private finance and ensuring the Sustainable Development Goals are also met.
“This discussion on climate finance is also moving in a very positive direction, not just the current flow, but also the quantum that is required for meeting current climate challenges, and also looking at transitional costs,” she said.
The fourth potential takeaway was the possibility of a global partnership for financial inclusion, in which Digital Public Infrastructure (DPI) has found a lot of traction, Sitharaman said.
“We have had a discussion in Bengaluru (during the first meeting), and had discussions here as well,” she said. “Leveraging DPI for achieving global financial inclusion is a subject which every country has taken keen interest in and people are looking at how best they can catch up in bringing inclusion through the use of technology.”
The Finance Minister expressed her gratitude to Singapore for bringing up, during the meeting, the agreement that it has with India over cross-border payments.
“The fifth possible takeaway is the international taxation issue so that we achieve a fair, sustainable and modern international tax system,” Sitharaman said. “That was also discussed among members today. The progress we are making in this area is also to bring in greater transparency in international taxation reforms.”
The sixth and final potential takeaway was about crypto assets, their regulation, and potential macroeconomic issues relating to them.
“The issue of crypto assets not being backed by a sovereign currency is a limitation, the money trail, the linkage to any terror and terror-related financing and drug and drug-related financing have all been discussed,” Sitharaman said.
“More importantly, the discussion on crypto highlighted the fact that it’s not going to be confined to one part of the world,” she added. “Its implications can affect the emerging market economies as well. So, even as we are talking about crypto, the impact it can have on developed economies and emerging market developing economies have also been taken on board.”
(Edited by Geethalakshmi Ramanathan)
Also Read: Serving, ex-officers spar over democracy & governance at event, Amitabh Kant defends G20 spending