India Voices Concerns of Global South at G20 Finance Ministers Meeting

Indian Finance Minister Nirmala Sitharam hosted the 3rd Meeting of Finance Ministers and Central Bank Governors of the G20 in Gandhinagar from 17 to 18 July 2023.

Unfortunately, no consensus statement could be issued at the end of the meeting, but an outcome document was issued, summarizing the meeting and noting the differences.

According to document which was made public, China and Russia objected to paragraphs stating that the war in Ukraine is causing “immense human suffering” and “exacerbating existing fragilities in the global economy.”

Several G20 members also condemned Russia for not extending the deal to allow the export of Ukrainian grains through the Black Sea.

On the subject of debt, US Treasury Secretary Yellen underscored that half of low-income countries are in or near debt distress, which is double the number in 2015. IMF Chief Kristalina Georgieva agreed that there is an urgent need for a more effective debt restructuring process.

World Bank President Ajay Banga echoed the concerns by underlining that lack of progress in debt management is fanning distrust between the Global North and Global South. A call for reforms at the Bretton Woods institution appears to be not only necessary but extremely urgent. A Multi-Lateral Convention (MLC) is under discussions with some countries still debating certain specific terms.

During the meeting, other issues were discussed, including Financial Inclusion, Digital Currencies and Global Minimum Tax. The OECD is the one leading the global tax reforms with a so-called Two Pillar Solution where companies will have to pay a certain level of tax where they operate.

India has taken a neutral stance on the Ukraine-Russia conflict but has voiced concerns over the negative impact that the prolonged war is having on the world economy. Janet Yellen hammered in the point by stating that ending the war in Ukraine would be “the single best thing we can do for the global economy.”