G20 finance ministers and central bank governors (FMCBG) have agreed that the grouping can contribute to building a common understanding on fostering a conducive environment for global economic recovery, and ensuring that the most vulnerable countries and sections of the population are adequately protected.
The resolution was taken in the context of the ongoing Russia-Ukraine war and the devastation caused in the region due to it.
During their second meeting, which concluded on Thursday in Washington, the members discussed the key challenges to the global economic outlook, including the war in Ukraine, food and energy insecurity, climate change, and recent risks to financial stability.
The meeting was held under the Indian G20 presidency on April 12-13, on the margins of the 2023 Spring Meetings of the International Monetary Fund and the World Bank Group.
The goal of this FMCBG meeting was to deliberate on the progress made by the various work streams of the G20 Finance Track on the deliverables that were tasked to them by the ministers and governors in the February G20 FMCBG Chair’s Summary and Outcome Document and to seek guidance on the way forward.
Finance Minister Nirmala Sitharaman and RBI Governor Shaktikanta Das jointly chaired the meeting.
On the debt agenda, discussions focused on strengthening multilateral coordination toward addressing the increasing debt distress in low-income and vulnerable middle-income countries.
Ministers and governors reiterated the need to swiftly complete the ongoing debt treatments under the Common Framework and beyond. Discussions also covered the impact of climate change-related policies on capital flows, among others.
During the session on sustainable finance, financial sector, and financial inclusion, discussions focussed on the mobilization of resources for climate change, the role of the multilateral financial institutions in catalyzing private finance flows for Sustainable Development Goals (SDGs), and the role of the G20 in scaling up and encouraging wider adoption of social impact investment instruments.
The members also deliberated on the macroeconomic and financial challenges posed by the crypto-assets ecosystem and exchanged views on potential global policy responses to crypto-assets, taking into account the risks, especially to emerging markets and developing economies (EMDEs).
Finance ministers and governors discussed the progress of the implementation of recommendations of the Independent Panel of multilateral development banks (MDBs’) capital adequacy frameworks (CAF).
They also shared their expectations from the recently constituted G20 expert group on “Strengthening Multilateral Development Banks (MDBs)”.
On financial inclusion, discussions focused on leveraging digital public infrastructure (DPI) for financial inclusion and productivity gains. Ministers and governors also shared perspectives on the development of the 2023 financial inclusion action plan (FIAP).
International taxation discussed the need for coordinated efforts toward effective implementation and wider adoption of the two-pillar international tax package.
Ministers shared suggestions on how best G20 can complement global efforts to enhance tax transparency.
The progress achieved during the second G20 FMCBG meeting will inform about the discussions during the third G20 FMCBG meeting which will be held in July 2023 in Gandhinagar, India, and subsequently in the leaders’ summit scheduled to be held in New Delhi on September 8-9, 2023.
