G20 Finance Chiefs To Tackle Global Economic Threats

G20 Finance Chiefs To Tackle Global Economic Threats

BENGALURU, India – Top financial leaders from the Group of 20 nations will meet this week in Bangalore, the technology hub of southern India, to address the many challenges to global growth and stability, including stubbornly rising inflation and high and rising debt.

India is hosting the G-20 financial conclave for the first time in 20 years. At the end of the year, the first G-20 summit will be held here. The meetings give the world's second most populous country an opportunity to showcase its growth as an economic hub and its status as a champion of developing countries.

This week's meeting of finance ministers and central bank governors comes just a year after Russia's invasion of Ukraine sent a cascade of shocks to the global economy, including the highest inflation in decades. US Treasury Secretary Janet Yellen is expected to discuss the global economic impact of the war at the G-20 meetings.

India is one of the countries walking a tightrope between the West and Russia, demanding greater global influence but refraining from conflict as its economy benefits from buying Russian crude oil at high prices.

"India is playing an increasing leadership role in the world," Information Minister Anurag Thakur said on Wednesday, echoing Indian Prime Minister Narendra Modi's stance that "there is no war in this day and age. Dialogue and discussion is the only way forward." .

Modi, who will hold more than 200 G-20 meetings in 28 cities in the run-up to the November summit, is expected to use the role to rebuild India's reputation as a leader in the fight against climate change and act as a bridge. between the interests of industrialized countries. and developing countries.

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"We don't have the resources that developed countries have, but we have achieved a lot in areas like space and renewable energy with minimal resources," Thakur said.

This is an urgent priority, given the growing importance of developing countries to global growth: the International Monetary Fund estimates that India and China alone will account for more than half of global economic growth this year, with other Asian countries accounting for another quarter. annual growth expansion will be in order. growth rates of 6-7%.

India's economy is expected to grow by 6.1% annually this year, after growing by 6.8% last year, the IMF said in a report on Monday.

"At the macroeconomic level, the strained conditions have eased somewhat, but the inflation rate remains high. In this situation, coordination between major economies is important," senior finance ministry official Ajay said on Tuesday. Seth. , a journalist in Bangalore.

Bangalore is the startup and technology hub of India. Originally known as an outsourcing hub, it is now known for its entrepreneurs and IT companies. But the city suffered from poor planning. Last year, it was hit by severe flooding that caused $30 million in damage, partly due to global warming.

Improving urban infrastructure will be the focus of discussions in India this week, the first of four meetings of G-20 finance ministers.

The G-20 includes the world's largest economies and has a rotating presidency. Indonesia hosted it last year, and Brazil and South Africa will follow in 2025.

In countries such as India, this is seen as a counterweight to the rally of richer economies such as the G7.

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During the meetings in Bangalore, officials will discuss a range of climate finance issues, reach consensus on digital currency regulation, global tax issues and other financial priorities.

Yellen and other officials said they would also discuss the risks of a heavy debt burden for many countries after a costly effort to mitigate the worst effects of the COVID-19 pandemic. These problems have been exacerbated as countries' import bills have risen due to persistently high food, oil and fertilizer prices and weakening currencies.

Yellen visited Zambia in January to discuss the African country's $6 billion debt to China, its largest creditor. Zambia became the first sovereign country in Africa to default on a $42.5 million bond in November 2020 amid the coronavirus pandemic.

But many other countries have seen their financial situation deteriorate in recent years, including India's neighbor Sri Lanka and other Asian countries.

"Several countries are facing huge debt problems. Finding permanent solutions will draw attention in the discussions,” said Seth, a finance ministry official.

A senior Treasury official, who spoke on condition of anonymity to discuss Yellen's travel plans, said he plans to urge G-20 countries to cut carbon emissions and invest more in renewable energy, infrastructure and agriculture.

At the United Nations climate conference last November, India, the world's third-largest emitter of greenhouse gases, proposed a phase-out of all fossil fuels and repeatedly stressed the need to restructure global climate finance.

The G-20's long-term priorities, including building stronger health systems, promoting sustainable energy use and helping countries improve their productivity, are often overshadowed by more pressing issues such as slowing global growth, debt crises and conflicts such as the war in Ukraine . .

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The war and the pandemic have exacerbated disruptions to energy, shipping and food security, complicating efforts to stabilize the global economy after the pandemic.

Another priority in Bangalore will be monetary policy coordination as central banks decide whether to keep raising interest rates or scale back efforts to curb inflation.

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Kurtenbach contributed from Bangkok.

Associated Press reporters Krutika Patti in India and Fatima Hussain in Washington contributed to this report.

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Follow Sibi Arasa on Twitter at @sibi123

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