While world leaders surprised G20 observers by issuing a joint statement, a day earlier than expected, addressing the war in Ukraine, India’s finance minister was taking the floor to talk about her country’s role in making progress on a different issue: aid.
Finance Minister Nirmala Sitharaman said India “has gone very well.”
She offered a list of economic and development finance achievements, starting with reforms to the multilateral development banks, or MDBs, charged with driving economic development in poor countries. She said these measures aim to make banks “bigger, better and more effective.”
The multilateral development banks, which include the World Bank, the BRICS New Development Bank and dozens of others, were under review by an independent “expert group” appointed by India and led by Larry Summers, the former president of Harvard University, and N. K. Singh. “, Indian economist.
The review found that current funding – $192 billion for 2022 – is now equivalent to only two-thirds of what it was during the financial crisis and a small fraction of the GDP of the world’s developing countries. Banks will need deeper pockets, along with a greater focus on cross-border challenges such as climate change and pandemics, Summers and Singh wrote.
Ms. Sitharaman announced that there is only one reform for the banks “Capital Adequacy Frameworks” It will open the way for additional loans worth $200 billion to countries of the South.
It listed seven other achievements, including expanding India’s public digital infrastructure to other countries through a two-year financial inclusion plan – which again focuses on the Global South.
There has also been a notable shift in climate finance. The United States, the European Union, and other rich countries pledged more than ten years ago to mobilize $100 billion annually in financing to help poor countries transition to clean energy and adapt to future climate risks. But they failed and avoided questions about the fund.
But on Saturday, Indian Prime Minister Narendra Modi made a statement redirecting the group’s attention from climate finance to developing biofuels to help reduce emissions. His comments appeared to cast doubt on his country’s commitment to the benefits of carbon credit trading, although Indian officials later clarified that India remains committed to doing so.
At the end of the day, several heads of government revealed a more tangible development. The India-Middle East-Europe Economic Corridor – announced by President Biden, Mr Modi and Saudi Crown Prince Mohammed bin Salman – will transport oil, gas and other forms of energy from the Persian Gulf through countries north-south and east-west, excluding Iran. However, the project lacked basic details, including a time frame.
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