Very strongly hope India's G20 presidency will help create effective debt restructuring systems: UN chief

UN Secretary General Antonio Guterres has said he "very strongly" hopes that India's G20 presidency will allow for the creation of effective systems of debt restructuring, warning that the developing countries are facing a "perfect storm" amid the impact of the pandemic and increased food and fuel prices due to the Ukraine conflict.

India will assume the Presidency of the G20 for one year from December 1, 2022 to November 30, 2023. Ahead of his three-day visit to India starting Tuesday, Guterres also said that he has been "very strongly advocating" for the need of reforms in "our international economic and financial system that was to a large extent built by the rich for the rich".

"I very strongly hope that the presidency of India of the G20 will allow for the creation of effective systems of debt restructuring and debt relief for the possibility of multilateral development banks to be able to do concessional funding to middle income countries that are particularly vulnerable…to make sure that multilateral development banks assume a multiplying effect, which means mobilise through guarantees, accepting to be the first risk-takers,” Guterres said. "Developing countries are now facing a perfect storm,” the UN chief told PTI in an interview.

Guterres noted that during the COVID pandemic, vaccines were not distributed equally and then resources for recovery were very different in developed countries that have the capacity to print trillions of dollars.

"Developing countries cannot print money, their currencies will immediately sink. On the other hand, we are seeing dramatic problems of debt - larger and larger numbers of countries on the verge of debt collapse," he said, as countries like Sri Lanka and Pakistan are facing unprecedented financial turmoil.

"And with the dramatic increases in prices of energy, food largely expanded by the war in Ukraine, we are now seeing countries in the developing world without any fiscal margin of maneuver to attend to the needs of their people. Not to mention the sustainable development goals in which we are moving backwards,” he said.

Against this background, Guterres called for reform of the international economic and financial system, adding that for this the G20 leadership will be essential.

Under its Presidency, India is expected to host over 200 G20 meetings, beginning December 2022. The G20 Leaders' Summit at the level of Heads of State and Government is scheduled to be held on September 9-10 next year in New Delhi.

A statement issued by the Ministry of External Affairs in New Delhi on the UN chief's visit said that Guterres will join Prime Minister Narendra Modi on October 20 in Gujarat’s Ekta Nagar, Kevadiya at the launch of the Mission LiFE (Lifestyle for Environment) booklet, logo and tagline.

External Affairs Minister S Jaishankar would hold bilateral discussions with Guterres on “issues of global concern, steps to deepen India’s engagement with the UN, including through India’s upcoming Presidency of the G20 and reformed multilateralism.” Guterres underscored the importance of supporting developing countries in these difficult times and in creating conditions for sustainable development.

On climate action, Guterres said it is essential that developed countries fully assume their commitments, not just the USD 100 billion per year target for climate finance that is not yet met but also the need to have at least half of climate finance on adaptation.

He stressed the need to support increasing capital of multilateral development banks “to better support developing countries”, particularly in their green transition and to be able to adapt to the devastating consequences of climate change.

"Unfortunately, those that are suffering more are not those that pollute more,” he said.

Guterres said on the other hand “we need to have a historical pact between developed countries and emerging economies like India because we need to reduce emissions”, which are growing.

Noting that developing countries naturally have their own needs of providing electricity to their population, of responding to their development perspectives “that they want to maintain in a very legitimate way”, Guterres said these countries have a huge dependency on fossil fuels, namely on coal.

"This historic pact is something which I believe we need…to create true partnerships in which developed countries contribute with the financial resources and the technological support to allow emerging economies to accelerate their transition,” he said.

"That is essential. If we are not able to reduce emissions not only in developed countries but also in emerging economies, we will lose the war on climate with devastating consequences for everybody,” he said.

Guterres noted that India is a country that "unfortunately is already suffering a lot in relation to climate - the droughts and other impacts are absolutely dramatic.” "I believe this is the moment in which the G20 countries, where you have all the developed countries, the biggest ones and all the biggest emerging economies, we need an historical pact for joining efforts to make sure that in solidarity, we are able to fight successfully climate change,” he said.

As leaders and climate experts prepare to meet for the UN Climate Change Conference COP 27 in Sharm El Sheikh, Egypt in November, Guterres said he will do everything possible to contribute for COP27 to be a success in mitigation, in adaptation and in finance.

"I think it is the moment to make loss and damage a central aspect of the discussion and the results of the COP27.”
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