G20 two-day meet: Participants discuss debt, multilateral development banks

A two-day meeting of the G20 International Financial Architecture Working Group concluded here on Tuesday with participants discussing issues pertaining to strengthening multilateral development banks and how to address challenges associated with debt.

Around 100 delegates from the G20 countries, invitee countries and international organisations participated in the meeting, Anu P Mathai, adviser, the Ministry of Finance, said while addressing the media here.

The discussions during the two-day meeting were jointly steered by the ministry of finance and the Reserve Bank of India along with France and Korea who are the co-chairs of the International Financial Architecture Working Group.

Matahi said the meeting was conducted over two days and the aim was to seek views of the G20 member countries and the invitee countries on the agenda of this group under the Indian presidency.

"The subjects that were discussed over the last two days were how to strengthen multilateral development banks and how to address challenges associated with this the G20 common framework for debt treatments, which is a previous achievement of G20 for helping the very poor countries with the debt.

"The focus of this group in 2023 is to support a global action for enhancing financing for development while at the same time, strengthening international financial institutions to support vulnerable countries," she said.

There will be more meetings of this group, she further said.

To a question on India's views on global debt, Parveen Kumar, Director, Ministry of Finance, said, "The first and foremost point which India raised is that we need more international and global cooperation to ensure economic stability so that everybody enjoys the fruits of strong and sustainable growth. Now, what are the impediments to economic stability is a matter of analysis".

Kumar said that India invited many international organisations like the IMF, the World Bank and seven to eight regional development banks.

"Some people (countries) are affected by capital outflows and some of the countries whose policies affect capital outflows. There is a wide variety of spectrum available around the table.

"The whole idea is to converge into some sort of solutions and agreements where countries agree that... these are the things which we all agree and we can all act on this and that the overall global financial stability is maintained. That is the core purpose of this group," he said.

To a question about the meeting, Mathai said it was the first of many meetings and the G20 is primarily a forum for discussing the issues that are key challenges of the day.

"Debt has been a problem for some years now and it is increasing. It is too early to have an outcome of this meeting. This issue will be discussed over the next few meetings so that members can decide what is the best way to improve the way the debt situation we have been having," she added.

Regarding a question on countries facing debt burden, Mathai said there are many countries in Africa like Zambia, Ghana; Central America and Latin America. There are several very poor countries which are facing a tremendous debt burden. Now, many middle-income countries like Sri Lanka are also facing a debt burden.

To a question on narrowing of divergences between the countries on key issues like reform of multilateral development banks and the global safety net, Mathai said it will take some time.

"These were all issues on the agenda and now everybody recognises the importance of these issues. One is the need to strengthen multilateral development banks to address new challenges that arise. So far, their focus has been on development financing. So, the resources of these MDBs need to be increased and they need to be strengthened to be able to face challenges. There is quite a convergence on the issues," she said.

She further said the work plan of this working group has been agreed upon by consensus.

Replying to a question, Baldeo Purushartha, joint secretary, the Ministry of Finance, said in the first meeting of the group, the agenda is set.

All the members have expressed their consensus on the agenda, said Purushartha.

The International Financial Architecture Working Group is dedicated to discussing solutions to vulnerabilities in the international financial system, enhancing financing for development and strengthening the international financial architecture.

India assumed the G20 presidency for one year on December 1, 2022. The G20, or Group of 20, is an intergovernmental forum of the world's major developed and developing economies.

It comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Italy, Indonesia, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the UK, the US and the European Union (EU).