On the first anniversary of the start of the Russian invasion of Ukraine, the G20 Finance Ministers have held a meeting in Bangalore, South India. In a scenario that includes the first year of conflict at the gates of Europe, the tenth package of fiscal sanctions by the EU against Russia and its response by turning off the tap on the Polish Druzhba pipeline, the G20 has not been able to reach an agreement about the war in Ukraine and its destabilizing impact on the world economy, although most condemned the conflict.
This is the first high-level hosted by India since it took over the G20 presidency, the group’s finance chiefs have met in Bangalore to try to find a joint position on the invasion of Ukraine and debt control.
Most members “strongly condemned the war in Ukraine” and criticized its impact on the world economy, except for Beijing and Moscow, two of the only four countries that were finance ministers or central bank governors did not attend the session in person , the rest of the countries in the group blamed the conflict for rising inflation, the disruption of distribution chains, and the growth of food and energy insecurity.
“Less constructive” conversations
The first vice president of the Spanish Government, Nadia Calviño, stated during the negotiations that the talks between the finance ministers were being “less constructive”. For his part, the French Finance Minister, Bruno Le Maire, yesterday demanded a firm condemnation of the Russian invasion of Ukraine before warning that, otherwise, Paris would oppose any joint statement that would dilute the rejection promoted by the group in A year ago in Bali.
G20 host India’s position on the conflict had been seen as one of the biggest impediments to the unanimous adoption of a declaration. Avoiding the word “war” or mentioning Russia, Indian Prime Minister Narendra Modi said today that “since the beginning of the developments in Ukraine, India has insisted on resolving this dispute through dialogue and diplomacy.”
The Group of Seven also took advantage of the city of Bangalore to reaffirm their support for Ukraine, with financial aid of 39,000 million dollars for 2023, and increase pressure on the G20 to take a clearer position on the global situation.
In search of an agreement to alleviate the debt
In addition to having the war in Ukraine in focus, the G20 finance ministers and central banks seek a common agreement to seek debt relief, although the group probably has certain differences, as the head of Economy will agree this Saturday, Nadia Calvino. “Discussions are ongoing and I think we are making progress in communication with a view to ensuring that there is a multilateral framework that provides clarity and certainty on how these debt management processes will be carried out,” the minister said.
Pushed by the coronavirus pandemic and war, global debt has exceeded $300 trillion in the hands of public and private creditors, following the largest increase in debt in one year, 2020, since World War II. An agreement on debt seeks the development of formulas to manage insolvency and liquidity problems, in addition to the reform of assistance and economic rescue programs supported by multilateral institutions that allow aid to be given to countries on the brink of collapse.
heavily indebted countries
This is the case of countries like Zambia or Sri Lanka, deeply indebted, without sufficient capacity to maintain the functioning of their governments, and waiting for financial assistance that is delayed due to the problems of these nations to meet the requirements of the organizations. multilateral.
“There are different points of view around the table on how to approach it, but I think it is fair to say that there is a common agreement and a shared agreement on the need to include debt relief as one of the instruments that can provide support to the most vulnerable countries,” he said.
G20 members and organizations such as the World Bank and the International Monetary Fund (IMF) have been working on reform mechanisms that will provide the necessary assistance, and this is one of the priorities of the group’s finance ministers.
“Over the course of 2023 we’re probably going to be discussing this in Washington in the spring, and in Marrakech in the fall, with a view to strengthening these multilateral institutions, making sure that they continue to be adequately funded and that we have the appropriate instruments to perform. must play to ensure financial stability,” Calvino said.
Time, however, is not on the side of countries that are over-indebted, as in the case of Sri Lanka, which declared debt default almost a year ago and is struggling to meet its basic expenses despite a series of cuts and the rationing of resources to citizens. “Time is of the essence,” acknowledged the vice president, “a solution must be found as soon as possible for these countries that are in the most fragile situation.”