G20 finance ministers and central bank chiefs opened talks Monday on debt restructuring deals, multilateral bank reform and finance to tackle climate change, as they aim to bolster a sagging global economy.

Indian Finance Minister Nirmala Sitharaman, chair and host of the summit in Gandhinagar, began by telling finance leaders of “the responsibility we have… to steer the global economy towards strong, sustainable, balanced and inclusive growth”.

Key on the two-day agenda will be “facilitating consensus to intractable issues associated with rising indebtedness”, Sitharaman said earlier on Monday, speaking to reporters alongside US Treasury Secretary Janet Yellen.

Talks will also focus on “critical global issues such as strengthening the multilateral development banks and taking coordinated climate action”, Sitharaman added.

Yellen said: “The world is looking to the G20 to make progress on key challenges like climate change and pandemics as part of our work to strengthen the global economy.”

She also cited work to tackle debt distress among the world’s poorest countries, noting debt restructuring progress in Zambia, which she had discussed when visiting Beijing this month.

– ‘Go faster’ –

China, the world’s second-largest economy and a major lender to several stressed, low-income countries in Asia and Africa, has so far resisted a common multilateral understanding on the issue, officials said.

Yellen on Sunday said the Zambia deal had taken “too long to negotiate”, and added she hoped debt treatments for Ghana and Sri Lanka could be “finalised quickly”.

“We should apply the common principles we agreed to in Zambia’s case in other cases, rather than starting at zero every time,” Yellen said. “And we must go faster.”

More than half of all low-income countries are near or in debt distress, double the case in 2015, Yellen added.

A top official from G20 chair India said there had been a “not so encouraging response” from Beijing on shared debt understanding.

Several economies have struggled following the double blow of the coronavirus pandemic and fallout from Russia’s war in Ukraine — which hit global fuel and commodity prices.

China is a major creditor in some of these cases and has faced criticism for its stand on nations’ debt restructuring.

– Climate finance –

The Group of 20 major economies will also discuss multilateral development banks’ reform, cryptocurrency regulations, and making access to financing to mitigate and adapt to the impact of climate change easier.

“In the Global North, climate change means emissions reductions,” World Bank chief Ajay Banga said in an op-ed ahead of the meeting.

“But in the Global South, it is a matter of survival, because hurricanes are stronger, heat-resistant seeds are in short supply, drought is destroying farms and towns, and floods are washing away decades of progress.”

A newly agreed first step on a fairer distribution of tax revenues from multinational firms reached by 138 countries last week is also set to be delivered.

Multinationals, especially tech firms, are currently able to shift profits easily to countries with low tax rates even though they carry out only a small part of their activities there.

But there is also concern that developed G7 member countries’ focus on Russia’s invasion of Ukraine may derail a final consensus agreement, although Yellen has said she would “push back” on criticism that there was a tradeoff between aid to Kyiv and developing nations.

Japan’s Finance Minister Shunichi Suzuki on Sunday “reconfirmed the G7’s unshakeable support” to Ukraine, adding that Moscow should also “pay long-term reconstruction costs”.

Any discussion on Ukraine is awkward for India, which has not condemned Russia’s invasion but is also part of the Quad grouping alongside Australia, the United States and Japan. (AFP)

•US Treasury Secretary Janet Yellen speaks during a joint statement with India as part of the G20 Finance Ministers, Central Bank Governors (FMCBG) and Finance & Central Bank Deputies (FCBD) meetings, at the Mahatma Mandir in Gandhinagar on July 17, 2023.

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