The G7’s big fundraisers meet on Sunday in Gandhinagar, India. On the discussion agenda are the relief of the debt burden of developing countries, banking reforms and the taxation of multinationals, as well as Ukraine. This meeting comes ahead of a G20 meeting, scheduled for September in Delhi.
A central point of the discussions, in which the US Treasury Secretary, Janet Yellen, will participate, will be the support that will be given to the main development banks such as the World Bank, to better direct their aid to the colossal challenge of global warming.
The debt crisis on the agenda
On July 12, the UN Secretary General, Antonio Guterres, who presented a report on the subject, warned about the debt crisis. He spoke of a “failure” of the global financial system that allows 3.3 billion people to live in countries where governments spend more on interest on their debt than on education or health.
According to this report, entitled “A world of debt”, the total world public debt reached, in 2022, 92 trillion dollars, that is, a multiplication by more than 5 since the year 2000. Developing countries concentrate nearly 30% of that debt, but your debt is growing faster. And partly because of higher interest, despite a lower level of debt relative to their GDP, they pay more interest.
A “frustration of the countries of the South”
The G7 consultations will be followed on Monday and Tuesday by a meeting of finance ministers and central bankers from the G20 countries in this same new Indian city, created in the 1960s and named after national independence hero Gandhi.
Ajay Banga, the new World Bank president, worried this week about the “deep mistrust” that quietly separates countries of the North and South, “at a time when we must come together” to overcome “interdependent” challenges. fight against global poverty, the “existential” climate crisis and the post-pandemic economic recovery compromised by inflation and the war in Ukraine.
“Poverty Trap”
The G7 countries (the United States, Japan, Germany, the United Kingdom, France, Italy and Canada) are determined to support Ukraine for as long as it takes to repel the Russian invasion.
Discussions about backing Kiev could be potentially awkward for the G20 host nation this year, as India has so far not condemned Russia’s invasion of Ukraine.
The Gandhinagar G20 will also be an opportunity to discuss an international agreement on the taxation of multinationals, after the validation this week of a first project in this direction by nearly 140 countries under the auspices of the Organization for the Economic Cooperation and Development (OECD), but on which there are still obstacles.
Source: BFM TV
