Counting down G20 agreement nicely

India is gaining valuable experience in shepherding opinion on the top policy challenges confronting the global economy. The third meeting of the G20 finance ministers and central bank governors under India’s rotating presidency held in Bengaluru this week saw progress in negotiations for a common debt framework, reform of multilateral lending institutions, a new approach to international taxation and synchronised regulation of cryptocurrencies. Marshalling a consensual approach to these issues demonstrates a mature handling of conflicting interests of member countries that wield bigger clout in world affairs. In the event, agreement was reached on almost all the agenda items, but fell short of a communique over the economic fallout of the Russia-Ukraine war.

This is no small achievement. The response of China, the biggest creditor to the developing world, to addressing debt vulnerabilities is encouraging after the latest round of talks for a common resolution mechanism. India has managed to headline its concerns over the risks to macroeconomic and financial stability posed by cryptocurrencies. The US wants further reform of multilateral development banks than those suggested by a G20 expert group before it is ready to commit more capital. India is also seeking safeguards for developing nations from a minimum global tax for multinational corporations proposed by OECD. Rich economies are on track this year to honour their promise to mobilise capital committed for climate-change mitigation by developing countries.

Incrementally over three rounds of meetings this year, the G20 agenda is heading towards fulfilment. This belies the initial low expectations because of the diversity of opinion. It goes to India’s credit that a middle ground is becoming available on a range of intractable issues. The G20 presidency allows India a rare opportunity to build bridges between developing and advanced economies. This experience should serve as a springboard for a bigger voice in shaping the global economic architecture.