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India pushes for solidarity as G20 group comes under stress
Nirmala Sitharaman also reminded all her counterparts that G20 finance ministers have come together in harshest economic conditions in the past, and it was time to work with solidarity, while briefing them on India’s priorities for the coming year
At a time when the G20 grouping is under stress due to geopolitical tensions between the West and Russia, finance minister Nirmala Sitharaman has told other G20 member countries that India’s priority will be rebuilding trust in multilateralism, and encouraging conversations that recognise interdependencies.
She also reminded all her counterparts that G20 finance ministers have come together in harshest economic conditions in the past, and it was time to work with solidarity, while briefing them on India’s priorities for the coming year. During her visit to Washington DC to attend the annual meetings of the International Monetary Fund and World Bank, Sitharaman’s engagements indicate that India’s top priority is getting the G20 process, as it prepares to take over the as the grouping’s presidency at the end of the year. Reserve Bank of India Shaktikanta Das is also in Washington to engage with his G20 counterparts.
India’s core message
On Thursday, Sitharaman participated in the G20 finance ministers and central bank governors meeting, met her Australian and German counterparts, and hosted a breakfast meeting which was attended by 13 G20 FMs. On Wednesday, she had participated in a working dinner and met finance ministers from Japan, South Korea, Saudi Arabia, Egypt and Netherlands (a guest country during India’s presidency) and on Tuesday, she held discussions with her American counterpart, Treasury Secretary Janet Yellen on G20, among other issues.
At the closing session of the G20 finance minister and central bank governors meeting, Sitharaman said that the global economy faced a “confluence of challenges” and it was “our collective responsibility” to prevent the risks from aggravating. According to a ministry of finance tweet, the FM said India viewed its G20 presidency as both an opportunity and responsibility. She told the gathering, “Rebuilding trust in #multilateralism is at the core of India’s thinking…India’s efforts will be to encourage conversations that recognise our inter-dependencies, our shared wisdom and our collective aspiration for a safe, peaceful and prosperous world.”
Sitharaman reminder her counterparts that G20 finance ministers had always come together in the “harshest global situations, set aside their differences and worked towards a common goal of prosperity for our people”. She urged them to work together with this sense of solidarity.
Challenging environment
Indonesian Finance Minister Sri Mulyani Indrawati, who chaired the G20 FM and governors meeting, said that India had briefed the members about the its 2023 presidency agenda.
She did not disclose details of the priorities laid out by India but added, “We really support India presidency and their agenda…I wish India all the best to continue coordinating our best effort in averting the risk of a global economic downturn.”
Sitharaman’s push for a consensus comes at a time when there is increasing recognition of the challenges faced by G20. Pierre-Olivier Gourinchas, IMF’s chief economist, told PTI in an interview on Wednesday that India will have a “difficult task” as the group’s chair to bring countries together on common challenges.
Flagging the issue of “geo-economic fragmentation” and geopolitical tensions following the war in Ukraine, the IMF official said it was much harder to have conversations about common goods, but it also made it more important to “keep the countries at the table, to keep the discussion going” and make progress.
Substantive agenda
The G20 meeting on Thursday discussed six agendas — global economy; international finance architecture; financial sector regulation; infrastructure investment; sustainable finance; and sustainable taxation.
Sitharaman’s interventions focused on the last three issues. The finance ministry tweeted that on scaling up sustainable and digital infrastructure investments, the FM highlighted the need to leverage private sector participation. “FM also spoke on mobilising finance at sub-national level for #inclusive and #quality #infrastructure.”
The last session of the meeting focused on progress made on the issue of international taxation. On the two pillar solution — a global framework meant to address issues of taxation arising from the digitalization of the economy — Sitharaman called for “participative engagement of all jurisdictions in negotiations” and prioritised capacity building.
“She also said that #InternationalTax rules should be simple, administrable and generate meaningful #revenue in developing countries.” India also called for an effective tax reporting regime and information exchange between jurisdictions for crypto assets to combat offshore tax evasion.
Continued bilateral push
Even as she engaged with the wider grouping, Sitharaman also focused on one-on-one engagements with key G20 countries.
She met Jim Chalmers, the Treasurer of Australia, where they discussed possible issues for India’s G20 presidency. In discussions with Germany’s finance minister Christian Lindner, the two leaders discussed areas of collaboration and support for India’s G20 presidency.
Sitharaman also met her New Zealand counterpart, Grant Robertson, where sought cooperation in the areas of fintech and India Stack Systems interoperability, according to the finance ministry.
