BENGALURU: The Russia-Ukraine war presented to India its first arduous challenge of its G20 presidency so far this year. It led to the two-day meeting of finance ministers and central bank governors in Bengaluru on February 24-25 ending without a joint communique. Unanimity among members on the joint communique could not be achieved as two major powers – Russia and China – opposed any reference to the war in Ukraine.
The challenge, however, came with a silver lining – it presented an opportunity for India to use its growing influence in the geopolitical arena. India steered through the headwinds and was able to issue a chair summary nonetheless and bring consensus about resolving the debt of vulnerable countries as well as reforms in multilateral development banks.
The lack of consensus among G20 members on a joint communique meant “chair’s summary and outcome document”, which summed up the two days of talks and noted disagreements, had to be issued.
Both Russia and China objected to two paragraphs – “Para 3 and 4” condemning the war that had been included in the Bali G20 summit declaration in November last year. Russia also wanted the G20 to include its concerns on the sanctions imposed on it and their impact on its people, which was not acceptable to other members.
“One of the successes was arriving at a common position on the debt language… It is important for us to emphasise because vulnerable countries are looking at G20 to find some solution to relieve their debt stress”Nirmala Sitharaman Finance Minister, India
Debt stress acknowledged
“One of the successes was arriving at a common position on the debt language… It is important for us to emphasise because vulnerable countries are looking at G20 to find some solution to relieve their debt stress,” India’s finance minister Nirmala Sitharaman said after the conclusion of the two-day meeting in Karnataka.
“Strengthening multilateral coordination by official bilateral and private creditors is needed to address the deteriorating debt situation and facilitate coordinated debt treatment for debtdistressed countries,” said the chair summary and outcome statement. Arguing in favour of reforms, Sitharaman said that it was the need of the hour, multilateral banks and international finance institutions needed to adjust to the realities of today and be better attuned to the requirements of developing countries.
Expert panel on reforms
Former United States treasury secretary Larry Summers and 15th Finance Commission member NK Singh have been tasked to head an expert panel. They have been given a time frame of three months to submit their recommendations on how multilateral development banks could be reformed.
On one of the most anticipated issues – the future of crypto assets and currencies, India’s stand that crypto currency cannot be legitimised unless it is “sovereign-backed”, was “acknowledged” by many G20 countries. “I am glad that India’s position is getting acknowledgement from so many members. Several have spoken about the risks of crypto in summary.
Unless sovereign backed, it cannot be currency and they have to be regulated,” said the finance minister.
Sitharaman said discussions on crypto assets have been proposed at the International Monetary FundWorld Bank spring meeting in April in Washington. Further, in July the Financial Stability Board (FSB) paper on crypto assets regulation will be tabled so that it could be discussed at the next meeting of the finance ministers and central bank governors, she said.
