India releases Chair Summary, joint statement unlikely before Leaders’ Summit

India once again released a Chair Summary and Outcome Document after the third meeting of G20 Finance Ministers and Central Bank Governors (FMCBG) on July 18, with a joint statement – or communique – seemingly unlikely before the Leaders’ Summit in September.

“The Chair Summary is because we still don’t have a common language on the Russia-Ukraine war,” Finance Minister Nirmala Sitharaman said in Gandhinagar at the Presidency briefing.

“Our position since February has been that we have derived the statement from Bali (Bali Leaders’ Summit) and the February Bengaluru statement was the feeder into this one. And that’s because also that the language given in Bali Leaders’ Summit, we don’t have the mandate to change that. So it must be left to the leaders during the Summit in September to take a call on that. Before that, we didn’t think it was right for us to change the language,” the finance ministers told reporters.

The G20 Bali Leaders’ Declaration, released in November under the presidency of Indonesia, had said most members “strongly condemned the war in Ukraine” while others had different views and “different assessments of the situation and sanctions”.

In the 26 paragraph-long Chair’s Summary released on July 18, G20 members were in agreement on all but three paragraphs.

“China stated that the G20 FMCBG meeting is not the right forum to discuss geopolitical issues,” a footnote in the document said.

A second footnote said that “Russia dissociated itself from the status of this document as a common outcome because of references in paragraphs 2, 3 and 5”.

The second paragraph – one of only two in the document to contain the word ‘war’ – deals with the situation in Europe and says the G20 members reiterated their national positions as expressed in other fora.

“Most members strongly condemned the war in Ukraine and stressed that it is causing immense human suffering and exacerbating existing fragilities in the global economy constraining growth, increasing inflation, disrupting supply chains, heightening energy and food insecurity, and elevating financial stability risks. There were other views and different assessments of the situation and sanctions. Recognising that the G20 is not the forum to resolve security issues, we acknowledge that security issues can have significant consequences for the global economy,” the paragraph added.

Russia has termed its conflict with Ukraine as a ‘Special Military Operation’.

Meanwhile, the third paragraph states that upholding international law is essential and the use or threat of use of nuclear weapons is inadmissible.

“Today’s era must not be of war,” it added.

Finally, the fifth paragraph deals with the impact on food and energy prices due to uncertainties in the global economy. On July 17, Russia pulled out of the Black Sea Grain Initiative – a move that was condemned by several G20 members.

Agenda moving forward

Despite the continued absence of a joint statement, Indian officials said there was “in-principle agreement” on almost all the issues on the agenda at the meeting in Gandhinagar.

One of the key issues under discussion has been the reform of multilateral development banks (MDBs), with the expert group led by Larry Summers and NK Singh submitting the first volume of its report this week. The second volume is expected to be submitted in October.

“We take note of Volume 1’s recommendations and the MDBs may choose to discuss these recommendations as relevant and appropriate, within their governance frameworks, in due course, with a view to enhancing the effectiveness of MDBs,” the Chair’s Summary said.

Another key issue where visible progress was made was that on Central Bank Digital Currencies (CBDCs), with Reserve Bank of India (RBI) Governor Shaktikanta Das saying there has been a “perceptible change in thinking” on CBDCs and that a large number of countries think it needs to be looked at more seriously.

“It was also recognised that there is great potential for CBDC to facilitate easier, smoother, seamless cross-border payments and there is need to take this agenda forward. So it is a work-in-progress,” Das said.

Debt breakthrough?

In what may be a breakthrough in the negotiations to address debt vulnerabilities in low and middle-income countries, Sitharaman said China’s response “appeared encouraging” today and that she is “very hopeful” China will be part of a common debt resolution framework at the time the Leaders’ Summit takes place in September.

Economic Affairs Secretary Ajay Seth said the Common Framework decided under the Saudi Presidency in 2020 had faced some implementation-level challenges. As such, it had been decided that International Financial Architecture Working Group would discuss policy-related issues linked to implementation of the framework and make appropriate suggestions.

“There were four cases the ministers had identified in the February meeting – Zambia, Ghana, Ethiopia, and Sri Lanka. And, with the exception of Ethiopia, there was forward movement in all of them,” Seth said.

Also read: India makes headway on G20 agenda amid easing Russia-Ukraine acrimony

Restructuring the debt of vulnerable countries is one of the key issues that India has been pushing under its Presidency of the G20. Speaking to reporters earlier today on July 16, US Treasury Secretary Janet Yellen said that she will push for “full and timely participation” of all bilateral official creditors on pending debt restructuring cases. While Yellen said she was pleased with the progress made in the case of Zambia, it had taken “too long”.

Similarly, Kristalina Georgieva, the managing director of the International Monetary Fund, rued the slow pace of debt resolution discussions, although she welcomed the progress made recently.