G20 Finance Ministers Meet: Macroeconomic Concerns, Debt Sustainability On Agenda

Discussions on macroeconomic concerns, debt sustainability and climate financing will be part of the first G20 Finance Ministers and Central Bank Governors meeting in Bengaluru on Friday.

"This is a big responsibility and opportunity for India," Ajay Seth, secretary at the Department of Economic Affairs, said at a press conference.

Though the concern around global growth has tapered down in the recent weeks, persistent inflation and a tough external environment continue to be a challenge for many countries.

According to Seth, coordination among major economies is vital amid high Inflation and he expects it to form a major part of the discussion.

"Growth is slowing at the global level. That will have an impact on global trade, even though the conditions are not as tough as they were a few months back," he said.

Debt vulnerability of countries and finding lasting solutions to tackle them are also expected to be discussed in the meet, Seth said.

"While we are all concerned about the debt situation in many countries, we also have to think about the ways we can forestall them," said Anantha Nageswaran, India's Chief Economic Adviser. "The discussion will be both on handling these situations before they arise and after they arise."

The role of multilateral development banks and their reform is also expected to be discussed.

Seth said the global community, working through multilateral development banks, could come together to address some of the long-term challenges, including reaching sustainable development goals and financing of climate action measures.

According to Nageswaran, dealing with climate change is a global concern. "One has to keep in mind that changes to human behaviour, changes to energy consumption will also entail a short-term economic cost."

Creating sustainable infrastructure in cities, as urbanisation unfolds globally, and digitisation of the economy are some of the other topics that are expected to be taken up.

The urban infrastructure aspect is relevant for developing countries as well as developed countries, Seth said. Developed countries could also gain by building less energy-intensive cities, he said.

Three seminars are expected to be conducted on the sidelines of the event. These include building consensus on the regulation of crypto assets, on digital public infrastructure and its role in financial inclusion, and on fast payment systems.

The international taxation topic—which was taken up in the December meeting—and the framing of an inclusion framework led by the Organisation for Economic Cooperation and Development have also seen progress, said Seth.

The next step will be the signing of the agreement by countries, which is expected to happen later this year.

The FMCBG meet will be preceded by a meeting of the G20 Finance and Central Bank Deputies on Wednesday. It will be co-chaired by Seth and RBI Deputy Governor Michael Patra.

The G20 discussions over the week are expected to see the participation of 70 delegations and over 500 dignitaries.