Debt and default: G-20’s finance chiefs to discuss more loans “Global South”
Virendra Pandit
New Delhi: With many countries in the “Global South” experiencing a cash crunch, debt burden, and the risk of default, the global finance chiefs will meet in Gandhinagar, Gujarat, next week, as part of the ongoing Group of 20 (G-20) events, to discuss increasing loans to developing nations from multilateral institutions, reforming the international debt architecture and regulations on cryptocurrency.
The finance ministers and central bank governors from the G-20 nations will also discuss a multilateral agreement on taxing conglomerates with cross-border operations, while the Russian war in Ukraine may also come up for discussion, the media reports, quoting officials, said on Thursday.
The July 17-18 meeting in Gandhinagar will be the third finance chiefs’ meeting under India’s G-20 presidency and will set the tone for a leaders’ Summit in New Delhi in September.
Among those expected to attend the Gandhinagar meeting included U.S. Treasury Secretary Janet Yellen, the World Bank’s newly-appointed President Ajay Banga, and the International Monetary Fund’s Managing Director Kristalina Georgieva.
Senior treasury officials from Russia and China may also attend.
India is trying to keep the focus of member nations on discussing issues of debt and other economic matters, and not push for any consensus on the Ukraine war.
The G-20 members may discuss a “substantial” increase in annual loans to developing countries from multilateral institutions as recommended by an independent panel formed in March, the reports said.
This panel, headed by economists Lawrence Summers and N.K. Singh was commissioned by the G-20 to propose reforms to multilateral development banks with a focus on increasing funding for sustainable development goals and climate change, among others.
It will continue to work towards resolving differences in helping low-income countries manage their debt burdens and free up funding for climate financing.
Nations like Zambia and Ghana have been waiting for big creditors to make progress in providing debt relief under the “Common Framework,” led by the G-20.
Global creditors, debtor nations, and international financial institutions agreed in April 2023 to galvanize the Common Framework, a platform expected to speed up and simplify the process of getting over-stretched countries back on their feet.
Although Zambia, locked in default for almost three years, struck a deal last month to restructure USD 6.3 billion in debt owed to governments abroad including China, many challenges remain.
The finance ministers and treasury heads will also discuss the agreement on the principles of managing cryptocurrencies in their respective geographies.
The first volume of a report and a “guidance note” to develop a globally coordinated framework for regulation and supervision of crypto assets will also come up for discussion in Gandhinagar, India’s Economic Affairs Secretary Ajay Seth said on Wednesday.
At the first meeting of the finance chiefs in February, the IMF endorsed New Delhi’s position that crypto assets would require global and coordinated regulation while giving sovereigns the option to ban such assets.
The G-20 may also discuss the key differences in taxation of large multinational companies under a framework put forward by the Organization for Economic Co-operation and Development (OECD), which, agreed on Wednesday to defer levying taxes on large multinational companies by one year to 2025 until a common framework is in place.
