Rising global debt vulnerabilities could trigger a worldwide recession and push millions into poverty, if left unaddressed, Union Finance and Corporate Affairs Minister Nirmala Sitharaman cautioned on Thursday.
She stressed that world leaders must also focus on the social dimensions of development to tackle pressing challenges like inequality and learning losses.
Speaking at the Voice of Global South Summit, Ms. Sitharaman said that financing the social dimension of sustainable development is an important priority under India’s G-20 presidency and the country “aspires to contribute to socio-economic reforms globally”.
“The world is confronted with numerous challenges and is bracing itself for other unforeseen ones as we speak today. We continue to face an economic slowdown, rising inflation, the threat of a resurgence of the pandemic and the risks emerging from geopolitical conflicts. As we seek to rebuild from the pandemic, the global South should continue to exhibit strong solidarity,” she said,
He exhorted leaders from several countries attending the summit virtually to share their innovative experiences in resolving issues affecting people.
The Minister said India stands ready to share its experiences in critical areas such as the use of digital tools and financial inclusion initiatives to augment global efforts in the financial sector.
“While there are numerous areas where India has made steady and significant advancements, we still have many problems to resolve. Many of you face similar challenges. By sharing our innovations, we can prepare a better future for all of us,” Ms. Sitharaman conveyed.
“Global debt vulnerabilities are on the rise posing threat of a systemic debt crisis. The global economy was already facing a growing debt problem, further aggravated by the pandemic and the recent geopolitical tensions. This distress is significantly pronounced for economies caught between servicing external debt and addressing essential domestic requirements like food and fuel,” she said, adding that this also hampers many nations’ climate transition efforts.
G-20 presidency
“If left unaddressed, these vulnerabilities can trigger a global recession and push millions into poverty. Under India’s G-20 presidency, financing of social dimension of sustainable development is an important priority. We cannot neglect the fact that many nations face increasing financing gaps for attaining the sustainable development goals,” she asserted.
“The pandemic, climate change and geopolitical tensions have affected efforts for development and growth, especially in the case of small States that have been hardest hit during the pandemic.It is amidst these persistent challenges and increased uncertainties that India took over the G-20 presidency last month,” the Minister pointed out.
The G20 has helped the world navigate through multiple shocks and continues to provide guidance for economic coordination and India intends to take the legacy forward and build further on it to make it more relevant, especially for the global South, she said. “India’s G-20 presidency is an opportunity as well as a responsibility to encourage collective solutions and rebuild trust in multilateralism,” she noted.
