GANDHINAHAR: The G20 finance chiefs concluded their talks in India on Tuesday with a lack of consensus regarding Russia’s war in Ukraine, limited advancements in debt restructuring, and concerns over deepening poverty due to divisions between rich and poor nations.
The Group of 20 major economies failed to reach an agreement on a joint statement “because we still don’t have a common language on the Russia-Ukraine war,” stated Indian Finance Minister Nirmala Sitharaman. Despite this, some progress was made on key issues during the two-day summit of finance ministers and central bank governors in Gandhinagar.
The conflict in Ukraine has had a severe global economic impact, resulting in surging food prices and diplomatic tensions between Russia and the West. International Monetary Fund (IMF) chief Kristalina Georgieva noted that the world is currently more vulnerable to shocks caused by climate change, pandemics, and the Ukraine crisis.
Russia’s Refusal to Extend Ukraine Grain Deal
US Treasury Secretary Janet Yellen emphasized the importance of supporting war-stricken Ukraine as the best way to aid the global economy, rejecting the notion that there is a tradeoff between assistance to Kyiv and developing nations.
Meanwhile, Russia’s refusal to extend a deal allowing critical Ukrainian grain exports through the Black Sea has sparked outrage from the United Nations. This move is likely to impact food prices, particularly in poorer nations.
The growing divide between rich and poor nations was highlighted by the new head of the World Bank, Ajay Banga, who expressed concerns that it could deepen poverty in the developing world. Banga urged for unity between the Global North and South, emphasizing the need to address issues such as resource allocation, energy rules, and poverty reduction.
Debt Restructuring for Developing Nations
Debt restructuring for low-income nations was also a significant focus during the G20 discussions. China, a major lender to several stressed, low-income countries, has resisted adopting a uniform debt restructuring formula. The G20 called for multilateral creditors to handle debt issues fairly, and Chinese response was deemed “encouraging” by Sitharaman.
However, IMF chief Georgieva highlighted the need for a faster and more effective debt restructuring process, as the delay disproportionately affects the most vulnerable countries.
The G20 finance ministers also deliberated on tax regulations, cryptocurrency regulations, climate change adaptation finance, and reforming multilateral development banks. The United States emphasized the potential for unlocking $200 billion over the next decade through reform efforts.
