She said at a news conference that concluded the negotiations on Tuesday that the debt issue remains a “priority” area for the G20 this year, with the leaders scheduled to meet at the September summit.
The United States entered the talks in pursuit of Basic deal on three elements of Zambia’s debt relief framework last month that are being applied to other issues. One key point: MDBs are not required to take out their loans. But China, the world’s largest official lender to developing countries, has backed away from that long-standing precedent.
Chinese Finance Minister Liu Kun told the group that multinational creditors should be pushed to participate in debt relief efforts, under the principle of joint action and fair burden, according to a statement from the Chinese government.
“We’ve made some progress with the Chinese,” said US Treasury Secretary Janet Yellen. “They went over to Zambia’s side, and they were more cooperative in the case of Ghana and Sri Lanka,” she said in an interview before leaving India on Tuesday.
“However, I understand that the Chinese have been very difficult about the statement in the area of debt relief,” Yellen said.
The G20 finance chiefs failed to reach consensus on an official statement, as they have been since meetings stretching back to February 2022, on the eve of Russia’s invasion of Ukraine.
Seetharaman said that G20 members still do not have a common language on the Ukraine war. However, the Gandhinagar talks producedfinal documentand “Chairman’s Summary.” The Chair’s statement was sometimes used to summarize conversations, rather than a formal statement.
Russia’s announcement of ending its grain export deal with Ukraine – which allowed safe passage of Ukrainian grain across the Black Sea – proves Another flash point in the G-20 talks. Russia is a member of the group.
“Today many members condemned it, saying that this should not have happened,” Sitharaman said.
The “outcome document” indicated that China considered the meeting not the “appropriate forum” for discussing geopolitical issues. It also noted that Russia had “distanced itself” with comments including a call to uphold UN humanitarian principles and a declaration that “the use or threat of use of nuclear weapons is not permitted”.
In terms of debt relief, the US side was also seeking agreement that future debt relief deals involve all bilateral creditors in the same deal – without separate negotiations. It also wants to use debt sustainability analysis from the International Monetary Fund and the World Bank to determine a sustainable debt burden.
The managing director of the International Monetary Fund, Kristalina Georgieva, told the G20 that “the debt restructuring process still needs to be faster and more effective.” “The costs of delay in reaching agreement on the required debt treatment are borne heavily by the borrowing countries and their people, who are least able to bear this burden.”
G20 policymakers continued to engage on whether and how to increase the lending capacity of multilateral development banks such as the World Bank. The head of this lender, Ajay Banga, has issued a number of proposed mechanisms to leverage the institution’s AAA credit rating, without any specific endorsement.
“I don’t know yet how much money you’re going to unlock because it depends on how much people are willing to invest,” Banga said on Bloomberg Television on Tuesday.
Seetharaman said the G20 has endorsed a “roadmap” to open “more lending resources at the multilateral development banks”. She noted that further developments were pending ahead of the group’s summit later this year.