India’s Modi asks G20 finance heads to focus on ‘most vulnerable’

Financial viability of many countries is being threatened by unsustainable debt, Indian PM says, as two-day G20 meeting begins in Bengaluru.

Narendra Modi greets his cabinet colleagues.
India holds the current G20 presidency [File: Manish Swarup/AP Photo]

Policymakers of the Group of 20 (G20) leading economies should focus on helping the world’s most vulnerable people, India’s Prime Minister Narendra Modi has said as top-level financial talks kick off near the Indian technology hub of Bengaluru.

“You represent the leadership of global finance and economy at a time when the world is facing serious economic difficulties,” Modi said on Friday in a video address to the finance ministers, central bank governors and other leaders attending the two-day meeting at the Nandi Hills resort on the outskirts of Bengaluru.

“It is up to you, the custodians of the leading economies and market systems … to bring back stability, confidence and growth to the global economy,” he said.

As countries deal with a slew of challenges in the aftermath of the pandemic, including unsustainable debt, conflict, inflation and eroding trust in international financial institutions, Modi said, “I urge you to focus on the most vulnerable people in the world.”

The meetings in Bengaluru are due to touch on a wide range of issues including digital currencies and payments, reform of institutions like the World Bank, climate change and financial inclusion.

However, broader issues such as the war in Ukraine are also overshadowing the talks.

It was unclear if delegates in Bengaluru would manage to agree on a joint statement, in particular, because of differences over the Ukraine war. The last three meetings have failed to do so.

India, which holds the current G20 presidency, does not want the bloc to discuss additional sanctions on Russia and is also pressing to avoid using the word “war” in G20 communique language to describe the conflict, G20 officials told Reuters news agency.

New Delhi has maintained a neutral stance on the conflict, vastly increasing its purchases of cheaper Russian oil. Russia calls its actions in Ukraine a “special military operation”.

Reform of global lenders

At the G20 meeting, Modi added his voice to calls for the reform of global lenders such as the World Bank.

“Trust in international financial institutions has eroded. This is partly because they have been slow to reform themselves,” he said.

“Even as the world population has crossed eight billion, progress on sustainable development goals seems to be slowing down. We need to collectively work to strengthen multilateral development banks for meeting global challenges like climate change and high debt levels,” he added.

The remarks echoed calls by others for the World Bank to boost lending and widen its remit beyond tackling poverty, although this has raised concerns that it could lose its top-notch credit rating.

World Bank chief David Malpass earlier this month said he was stepping down a year early.

Nominated by former US President Donald Trump, Malpass came under fire last year after he refused multiple times to say if he believed man-made emissions contributed to global warming.

On Thursday, Washington nominated Indian-American former Mastercard CEO Ajay Banga as his successor.

India’s presidency of the bloc comes as neighbouring South Asian countries – Sri Lanka, Bangladesh and Pakistan – have been seeking bailouts from the International Monetary Fund (IMF) due to an economic slowdown caused by the COVID-19 pandemic and the Ukraine conflict.

Last week, United Nations Secretary-General Antonio Guterres called on G20 countries to agree on a $500bn annual stimulus for its sustainable development agenda that could “cushion the impacts of current global crises on the Global South”.

The IMF said ahead of the meeting that about 15 percent of low-income countries are in debt distress and an additional 45 percent are at high risk.

Source: News Agencies