The primary focus of India’s G-20 Presidency in 2023 has been to strengthen Multilateral Development Banks (MDBs) as they try to address shared global challenges, said Union Minister for Finance and Corporate Affairs Nirmala Sitharaman on Friday.
MDBs are also facing increasing demands from donor and borrowing countries to expand their lending operations beyond their core development mandates, the FM said. “However, MDBs are not currently equipped to address this rising demand for their resources adequately,” she added.
She was delivering, virtually, the keynote address in a seminar on ‘Global Economy: Challenges, Opportunities and the Way Forward’ which was jointly organised by the Department of Economic Affairs, Ministry of Finance and Reserve Bank of India, under the aegis of the Finance Track of India’s G-20 Presidency in Mumbai.
The Finance Minister said another issue discussed in the G-20 Finance Track was ‘Escalation of Debt Issues in Vulnerable Economies’, which posed significant economic risks to their sustainable development.
“The Indian G-20 Presidency has given great importance to the management of global debt vulnerabilities, demonstrating a commitment to voicing the concerns of the Global South,” she stated.
The Finance Minister also stated that, under the G-20 India Presidency, digital public infrastructure has been integrated into G-20 discussions with member countries recognizing its capacity to enhance productivity and to accelerate financial inclusion.
Speaking about the issues faced by MDBs, the Finance Minister said, after decades of integration, the global economy was starting to witness increasing fragmentation and unravelling multilateralism.
She also mentioned that the Indian G-20 Presidency has set up an Independent Expert Group on Strengthening MDBs.
“The Expert Group, in the Volume-I of their Report has proposed a triple agenda, comprising three crucial recommendations for the MDBs,” she said.
These include efforts to tackle global challenges, alongside their core mission of poverty reduction and shared prosperity; to triple their sustainable lending level by 2030 and to enhance their financial strength to capital adequacy improvements and general capital increases.
Reserve Bank of India (RBI) Governor Shaktikanta Das while speaking at the same event said structural challenges such as financing global public goods, managing global debt vulnerabilities and dealing with climate transition were uphill tasks which no country can achieve alone.
“Recommitting to multilateralism is the need of the hour and this is precisely what the Indian Presidency of G20 is trying to foster,” he said.
“It is also important to take note of people-centric transformative changes taking place in member countries, like the UPI and the financial inclusion initiatives in India,” he added.
“Wider adoption of such models would make the world a better place for everyone,” he further said.
Mr. Das said recent fault lines in global cooperation had led to under-provisioning of global public goods and erosion of economic welfare.
