G20 Fails Low-Income Countries Yet Again – Impakter

The G20 Finance Ministers and Central Bank Governors Meeting

The G20 Finance Ministers and Central Bank Governors (FMCBGs) meeting, that took place on July 17 and 18, convened to address critical global issues. Attended by finance ministers from the world’s leading economies, the meeting failed to achieve any significant breakthroughs on debt restructuring.

Serious Concerns for Low-Income Countries

This lack of progress on the debt crisis raises serious concerns, especially for low-income countries.

An Ambitious Agenda

The meeting, organized under the presidency of India, had an ambitious agenda aimed at addressing critical global challenges. It sought to advance discussions on key issues, including “progress in the debt treatment for countries under the Common Framework; a guidance note for developing a globally coordinated framework for the regulation and supervision of crypto-assets.”

1. Debt treatment for countries under the Common Framework
2. Guidance note for developing a globally coordinated framework for the regulation and supervision of crypto-assets

Low Attendance and Lack of Engagement

Despite this hefty agenda, the meeting witnessed low attendance from several finance ministers. As reported by Reuters, officials stated that many finance ministers “were forced to skip the meetings due to domestic issues that were a ‘priority’,” leading to a lack of engagement and slow decision-making. The British and German finance ministers didn’t even bother to show up.

Challenges in Finding Common Ground

This lack of results and general disarray probably reflects the fact that the G20 comprises widely diverse economies with different political priorities. Finding common ground among member states is especially difficult when complex issues like climate change finance and global tax frameworks are discussed. They impact low-income countries in particular and can prove challenging as countries, depending on their level of economic development, hold differing views and often eschew responsibilities to other poorer countries.

Debt Relief Urged by the United States

Nevertheless, the problem of debt was raised during the meeting, and by the United States in particular. US Treasury Secretary Janet Yellen, who had already urged on the need to speed up debt relief to developing countries ahead of the meeting, tried to encourage talks on the matter.

The Human Cost of Inaction on Debt

The numbers are disheartening. According to the World Bank, climate change will drive over 130 million people into poverty over the next decade. And according to a recent UNDP report, poverty rates in poor countries have surged in the past three years, with “the number of additional individuals living on less than $3.65-a-day reaching 165 million by 2023.”

Calls for Change in International Financial Architecture

At the end of last year, the UK Guardian reported that almost 50 countries around the world faced what could soon become unsustainable record levels of debt. Yet the cost of measures that would enable some relief corresponds, according to current calculations, to a very modest “0.065 percent of global GDP.” The report urged “adaptive social protection” measures and a “Debt-Poverty Pause” to “redirect debt repayments” towards critical social expenditures, emphasizing the need for an international financial architecture capable of stabilizing economies during crises.

Lack of Attention and Urgency

However, as demonstrated by the lack of a joint communique on the issue, the debt burdens faced by low-to-middle-income countries were not accorded the necessary attention and urgency by representatives of the world’s largest economies.

Priority Actions for G20 Members

As the G20 Summit and COP28 approach, member states must prioritize meaningful actions to address the debt crisis, promote climate change finance, reform global tax frameworks, and strengthen multilateral development banks.

Risks of Economic Inequalities and Impeding Progress

Failure to do so risks exacerbating economic inequalities and impeding progress towards a more equitable and resilient future.

A Downward Spiral

This lack of seriousness regarding the debt issue of vulnerable nations will soon exacerbate their economic challenges and perpetuate a cycle of poverty that climate change is set to make even worse: Not a cycle, but a downward spiral.

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 1: No Poverty
• SDG 8: Decent Work and Economic Growth
• SDG 10: Reduced Inequalities
• SDG 13: Climate Action
• SDG 17: Partnerships for the Goals

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 1.2: By 2030, reduce at least by half the proportion of men, women, and children of all ages living in poverty in all its dimensions according to national definitions.
• SDG 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries.
• SDG 10.1: By 2030, progressively achieve and sustain income growth of the bottom 40 percent of the population at a rate higher than the national average.
• SDG 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.
• SDG 17.1: Strengthen domestic resource mobilization, including through international support to developing countries, to improve domestic capacity for tax and other revenue collection.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator 1.2.1: Proportion of population living below the national poverty line, by sex and age.
• Indicator 8.1.1: Annual growth rate of real GDP per capita.
• Indicator 10.1.1: Growth rates of household expenditure or income per capita among the bottom 40 percent of the population and the total population.
• Indicator 13.1.1: Number of deaths, missing persons, and directly affected persons attributed to disasters per 100,000 population.
• Indicator 17.1.1: Total government revenue as a proportion of GDP, by source.

Table: SDGs, Targets, and Indicators

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Source: impakter.com

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