As part of the G20 (Group of Twenty) Indian Presidency, the 1st G20 Finance Ministers and Central Bank Governors (FMCBG) Meeting was held from 24 -25 February 2023 in Bengaluru, Karnataka and it was preceded by 2nd Finance and Central Bank Deputies (FCBD) Meeting which was held in Bengaluru on 22nd February 2023.
1st G20 FMCBG Meeting:
- The meeting was co-chaired by Union Minister Nirmala Sitharaman, Ministry of Finance (MoF) and Dr. Shaktikanta Das, Reserve Bank of India (RBI).
- Prime Minister (PM) Narendra Modi addressed the first FMCBG meeting via video message.
- The 1st G20 FMCBG meeting, held under the G20 Indian Presidency, included finance ministers and central bank governors from G20 members, invitee members, and heads of international organizations (IOs).
- The meeting was attended by 72 delegations.
Key Focus Areas:
i.The meeting covered topics like leveraging digital public infrastructure (DPI) for advancing financial inclusion and productivity gains, strengthening multilateral development banks (MDBs) to address shared global challenges of the 21st century, and financing resilient, inclusive, and sustainable “cities of tomorrow.”
- Global economy, global health, and international taxation-related topics were also discussed during the sessions.
ii.The discussions of the 1st G20 FMCBG meeting are intended to provide a strategic roadmap for the various work streams of G20 Finance Track in 2023.
2nd G20 FCBD meeting:
The ‘2nd G20 FCBD meeting was co-chaired by Ajay Seth, Secretary (Economic Affairs), and Dr. Michael D. Patra, Deputy Governor, RBI, on February 22, 2023 in Bengaluru, Karnataka.
- The 2nd G20 FCBD meeting was inaugurated by Union Minister Anurag Thakur, Ministry of Information and Broadcasting (MIB) and Ministry of Youth Affairs and Sports (MoYAS), Government of India.
Other Related Events
i.A number of side events were hosted on the eve of these sessions, covering topics such as DPI, Policy Perspectives on Crypto Assets and the role of National Payment Systems in Cross Border Payments.
ii.To highlight India’s different cuisines and cultures, a Ratri Bhoj Par Samvad and specially curated cultural programmes were organized.
iii.In addition, a special event titled “Walk the Talk: Policy in Action” was organized.
G20 Countries Adopt “Chair Summary”; Russia & China Oppose the Ukraine War-Related Paragraphs
The “G20 Chair’s Report and Outcome Document,” which was adopted by the G20 countries during the first G20 FMCBG meeting, highlighted a slightly improved global macroeconomic outlook.
- It also acknowledged that there are still obstacles and that global growth is still modest.
- In order to secure robust, sustainable, balanced, and inclusive growth, the United States has committed to improving international policy coordination.
It emphasized the importance of well-balanced monetary, fiscal, financial, and structural policies in promoting growth and ensuring macroeconomic and financial stability.
i.The paragraphs 1, 2, and 5–17, as well as Annexes 1 and 2 of the “G20 Chair’s Report and Outcome Document”, were approved by all G20 Finance Ministers and Central Bank Governors.
ii.Apart from Russia and China, all member countries agreed to paragraphs 3 and 4 of the document, which were adopted from the G20 Bali Leaders’ Declaration (November 2022).
G20: India Asks IMF, FSB to Draft New Technical Paper On Crypto Assets
India, which presently holds the G20 Presidency, has entrusted the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to jointly prepare a technical paper on cryptocurrency assets.
- This technical paper could be used to formulate an all-inclusive policy to govern crypto assets.
- The joint paper would be presented at the 4th meeting of FMCBG in October 2023.
This proposal was made by India, as part of the 1st G20 FMCBG meeting.
i.The G20 will develop a universally acceptable international framework to govern crypto assets, and only a monetary unit backed by a central bank will be considered a currency.
ii.The Financial Action Task Force (FATF), the FSB, the Committee on Payments and Market Infrastructures (CPMI), the International Organization of Securities Commissions (IOSCO), and the Basel Committee on Banking Supervision (BCBS) have been coordinating the regulatory agenda while working under their own institutional mandates.
iii.At India’s request, the IMF presented another paper outlining the effects of cryptocurrency adoption on a country’s internal and external economic stability, as well as the structure of its financial system.
G20 Nations Agree On the Language to Deal with Debt Vulnerabilities
Finance Minister Nirmala Sitharaman announced that the G20 countries have agreed on language to address the debt vulnerabilities of developing countries.
- According to the G20 Chair’s Summary and Outcome Statement produced during the first G20 FMCBG meeting, the ministers acknowledged the need of addressing debt vulnerabilities in low- and middle-income countries.
i.It is essential to emphasize a common position on debt language as vulnerable countries are relying on the G20 countries for measures to effectively address their debt stress.
ii.This development demonstrates the G-20’s responsiveness by including four nations—Ghana, Sri Lanka, Zambia, and Ethiopia—that will gain from the swift action of international institutions.
iii.As of December 2022, the poorest nations in the world end up owing USD 62 billion in annual debt payments, up 35% from USD 46 billion in 2021, according to World Bank (WB) President David Malpass, raising the possibility of default.
Recent Related News:
i.As part of its Group of Twenty (G20) presidency, the Government of India (GoI) will host the country’s first “Global Tourism Investors Summit 2023” in April 2023, with participation from all G20 members.
ii.The Union Ministry of Tourism will organize the Global Tourism Investors Summit 2023, with the Confederation of Indian Industry (CII) as the industry partner, and it is scheduled to take place in New Delhi, Delhi, from April 10 to 12, 2023.
About the Group of Twenty (G20):
i.The G20 is the leading forum for economic cooperation on a global scale.
- G20 Members: It has 20 members, including 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Türkiye, United Kingdom (UK), United States (US), and the European Union (EU).
ii.India is hosting the prestigious G20 summit in 2023, as the country holds the G20 Presidency from December 1, 2022, to November 30, 2023.
iii.The theme for India’s G20 Presidency is “Vasudhaiva Kutumbakam,” which refers to “One Earth, One Family, One Future. It is taken from the Maha Upanishad, an ancient Sanskrit text.