Challenges for India as G20 President: Debt distress, climate action

NEW DELHI: On Friday, visiting US Treasury Secretary Janet Yellen noted that India is taking over the G20 presidency at an "uncertain time for the global economy" and that the main challenges the nation will face are addressing debt distress, promoting climate action, modernising the multilateral development banks, and embracing and guiding the changing economy.

"In three weeks, India will take over as G20 president at a precarious time for the world economy. We are eager to assist India with its G20 presidency. To sustain progress on our most pressing issues and to accelerate the global economic recovery, a successful Indian president is essential "Soon after arriving in the nation's capital, Yellen visited the Microsoft campus in Noida and made the statement.

Regarding debt hardship, Yellen stated that the G20 must improve in order to offer debt relief when required. "The G20 year of India offers a potential to hasten international cooperation on debt restructuring. The G20 formed the Common Framework two years ago to gather all the significant bilateral creditors. Because China has not cooperated, the Framework has not lived up to its promise. Therefore, needy debtor countries are reluctant to ask for Common Framework treatment" Yellen said.

This needs to change, she said. "To fulfil their G20 commitment to offer genuine debt relief, all significant bilateral creditors, including China, must work cooperatively. We must also increase the Common Framework's own speed and predictability. Beyond low-income nations, middle-income nations in trouble, like Sri Lanka, will also require a procedure for timely and organised debt relief. Whether through a broadening of the Common Framework or another global framework, we applaud India's leadership in this area." When discussing the difficulties caused by the climate catastrophe, Yellen said: "We have a shared interest in doing so since we are the second and third biggest producers of greenhouse gases in the world. The US is acting in a serious way.

 We have passed the Inflation Reduction Act here at home. In our history, this is the most forceful domestic climate action " By the end of this decade, we should have reduced our emissions to at least half of 2005 levels thanks to our investment. The cost curves for sustainable energy technology will also be lowered. The remainder of the world will benefit from this." Yellen stated that the US is collaborating with other nations to increase climate resilience for the communities that are most at risk.

And we are assisting those who will be most impacted by the transition to a net-zero economy in making a just transition. By 2024, President Biden promises to increase US public climate financing to over $11 billion. To hasten India's energy transformation in accordance with its ambitious climate targets, the G7 is mobilising a wide range of public, private, and philanthropic investment in partnership with India. In our capacity as co-chairs of the G20 working group on sustainable finance, we will also strengthen global climate coordination with India. A global issue like climate change cannot be resolved by a single nation. We must cooperate as a team to accomplish this "She said.

Regarding the development of multilateral development banks, the Treasury Secretary said: "Our current multilateral development finance architecture is unable to act swiftly and effectively enough to address these global challenges. I asked for an evolution of the development banks last month, in advance of the Annual Meetings. I stated that while maintaining their current emphasis on poverty reduction and the Sustainable Development Goals, these institutions must develop new strategies for addressing global challenges "I'm happy that the World Bank has promised to create a work plan by the end of the year to enhance its function and ability to meet changing needs. India and the US are essential to steering the World Bank through this transformation as major shareholders in the organisation. 

This initiative is a crucial component of our wider plan to mobilise against the challenges facing the world." In her remarks on the evolving global economy, Yellen said: "Over the past three decades, the digital revolution has transformed how people communicate and conduct business in our nations. The digital economy now offers enormous possibilities and keeps the economy growing. This is especially true in India, which has 1.2 billion mobile phone subscribers and more than 560 million Internet users. India has had incredible success with its attempts to increase financial inclusion because of rapid digital adoption." She did note that while many Indians and Americans now have access to digital opportunities, most of the rest of the world does not.

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