Global debt dominates as G20 finance chiefs meet

G20 finance ministers and central bank chiefs opened talks on debt restructuring deals, multilateral bank reform and finance to tackle climate change, as they aim to bolster a sagging global economy.

Indian Finance Minister Nirmala Sitharaman, chair and host of the summit in Gandhinagar, began by telling finance leaders of "the responsibility we have... to steer the global economy towards strong, sustainable, balanced and inclusive growth".

Key on the two-day agenda will be "facilitating consensus to intractable issues associated with rising indebtedness", Sitharaman said earlier on Monday, speaking to reporters alongside US Treasury Secretary Janet Yellen.

Talks will also focus on "critical global issues such as strengthening the multilateral development banks and taking coordinated climate action", Sitharaman added.

Yellen said: "The world is looking to the G20 to make progress on key challenges like climate change and pandemics as part of our work to strengthen the global economy."

She also cited work to tackle debt distress among the world's poorest countries, noting debt restructuring progress in Zambia, which she had discussed when visiting Beijing this month.

'Go faster'

China, the world's second-largest economy and a major lender to several stressed, low-income countries in Asia and Africa, has so far resisted a common multilateral understanding on the issue, officials said.

Yellen on Sunday said the Zambia deal had taken "too long to negotiate", and added she hoped debt treatments for Ghana and Sri Lanka could be "finalised quickly".

"We should apply the common principles we agreed to in Zambia's case in other cases, rather than starting at zero every time," Yellen said.

"And we must go faster."

More than half of all low-income countries are near or in debt distress, double the case in 2015, Yellen added.

A top official from G20 chair India said there had been a "not so encouraging response" from Beijing on shared debt understanding.

Several economies have struggled following the double blow of the coronavirus pandemic and the fallout from Russia's offensive in Ukraine — which hit global fuel and commodity prices.

China is a major creditor in some of these cases and has faced criticism for its stand on nations' debt restructuring.