NEW DELHI :After decades of integration, the global economy is seeing increasing fragmentation, making it one of the biggest challenges for multilateralism and addressing shared economic objectives, finance minister Nirmala Sitharaman said.
Speaking at a G20 event in Mumbai, Sitharaman said that India’s presidency has so far ensured that geopolitical differences don’t supersede the core mandate of international cooperation.
“Indian presidency has ensured that common ground is reached in all economic issues while maintaining a forward-looking agenda in G20 in 2023,” Sitharaman said.
“Discussions have been centred around finding solutions to existing challenges and forestalling emerging problems,” she added.
Notably, last month, countries of the G20 grouping could not agree on a joint statement at the end of a meeting of their finance ministers and central bank governors, as the grinding war in Ukraine continued to polarize the bloc, which counts Russia, China, and the US as members.
Sitharaman emphasized that the Indian G20 presidency’s main focus is to strengthen multilateral development banks (MDBs) to address mounting debt issues among developing economies.
“MDBs need to expand their scope of operation to address the needs of emerging economies,” she said.
“By restructuring existing debt and providing sustainable finance, the international community can contribute to releasing financial resources for vulnerable countries to shield their populations from economic hardships,” she added.
Sitharaman also pointed out that MDBs are currently not equipped well enough to address these demands adequately and will need to evolve.
“MDBs are facing increasing pressure from donor and borrowing countries to expand their lending operations beyond their core development mandate,” she said. She said G20 under the Indian presidency is working on solutions that can constructively contribute to the efforts that MDBs are undertaking.
Sitharaman said that India has voiced the concerns of the global south.
“The international community must collaborate in stronger ways to coordinate debt structuring for low income and middle income vulnerable countries facing debt distress,” she added.
Meanwhile, the Indian government’s chief economic advisor, V. Anantha Nageswaran, who spoke after Sitharaman, said that the ongoing geo-economic distress is harming the emerging and developing economies that are more reliant on integrated global economy and developed on globalization.
“These challenges are global in nature for which we need global solutions,” he added.
The priorities of the finance track of G20 under Indian presidency are strengthening international finance architecture, financing for global public goods, managing global debt and vulnerabilities, addressing macro economic impact of food and energy security, and financing sustainable and resilient cities of tomorrow.
