China debt trap shadow on G20 finance agenda
By Our Special Correspondent
New Delhi, December 14: Fresh from the experience in bailing out Sri Lanka from economic collapse, India has sought to bring the rising incidents of countries trapped in debt to the centre stage of the G20 agenda. The first G20 Finance and Central Bank Deputies Meeting, under the Indian Presidency, was held in Bengaluru, Karnataka.
The discussions focussed on issues relating to the global economy and risks. Most significant agenda that was discussed during the course of the two days was the issue of managing global debt vulnerabilities. India, officials said, is seeking greater sensitization of the debt crisis in developing countries in the aftermath of the Covid-19 pandemic.
It’s noteworthy to mention that China-led debt trap had taken Sri Lanka to the financial collapse this year. India had reached out immediate assistance to stabilize the Sri Lankan economy. While India had extended close to $4 bn assistance to Colombo to steer the Sri Lankan economy back to the normalcy with additional efforts, which included reaching out to the international financial institutions, China was missing in action and Beijing even arm-twisted Colombo to take control of the strategic assets in the island nation. Indian diplomatic officials said that China’s debt trap has dragged not less than 60 Asian, African and Latin American countries into serious financial troubles, which may further push them into indebtedness to Beijing.
Officials also said that India would seek the G20 nations to address the issue of the vulnerabilities of smaller nations to foreign debts, and their resolution without compromising the sovereignty of such countries. At a time when the global order is in flux in the wake of the Russian invasion of Ukraine, India is aiming the G20 to set a definitive change of course in the international lending to developing nations, which are at acceptable terms.
The first meeting on the global economy and Framework Working Group priorities, which will set the agenda for meeting of the Finance Ministers of the group in February, also deliberated on financing climate action. Besides, building resilient, inclusive and sustainable cities of tomorrow was also discussed by the members of the G20 in Bengaluru.
“In the session on International Financial Architecture, delegates deliberated on various issues, including strengthening Multilateral Development Banks (MDBs) and exchanged views on work to be undertaken in 2023 on key topics, including global debt distress, capital flows and global financial safety net. In the infrastructure session, discussions took place on India’s priorities for the Infrastructure Working Group 2023 including “Financing Cities of Tomorrow: Inclusive, Resilient and Sustainable”,” the G20 secretariat said in an official statement, while adding that on sustainable finance issues, members exchanged views on financing for Sustainable Development Goals (SDGs), including climate action to facilitate the development of a sustainable and resilient global economy.
Discussions also took place on International Taxation on the priority areas for 2023, including monitoring the progress of the Two-Pillar Tax Package being developed under the OECD/G20 Inclusive Framework, enhancing tax transparency and multilateral capacity building on taxation. In the session on Global Health, the G20 Deputies discussed strengthening of the coordination arrangement between Finance and Health Ministries for Pandemic Prevention Preparedness and Response (PPR), including expanding the voice of Low-Income Countries by inviting key Regional Organizations to the discussions.
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