India needs to be flexible as G-20 chief in face of global challenges: CEA

Nageswaran flags climate finance as a key agenda of bloc in face of 'unknown unknowns'

The global economy is dealing with unprecedented 'unknown unknowns', and India, as the next president of the Group of 20 (G-20) nations, should be able to improvise and be flexible to deal with challenges, said Chief Economic Advisor V Anantha Nageswaran on Tuesday.

“We know the circumstances under which India will assume the presidentship of G-20. One of the necessary requirements to ensure that we do a good job of the presidency is to be able to improvise and be flexible as circumstances emerge in the global economic and political landscape,” Nageswaran said at an event organised by Indian Council for Research on International Economic Relations.

Nageswaran said that the global economic environment is not dealing with ‘known unknowns’ but ‘unknown unknowns’. Under these circumstances, the objective of the Indian presidency of G-20 will be to focus on key issues of macro-economic vulnerabilities in the near term, which deal with food and energy insecurities arising because of near-term geopolitical developments, Nageswaran said.

“Looking further beyond, it will be important to see how multilateral institutions can be strengthened both in terms of governance and the capital and resources they command to be able to serve development needs of countries as well as global challenges which also affect smaller and lower income countries more than it affects others,” Nageswaran said.

He said that the entire idea of India’s presidency would be to identify consensus-based solutions, accelerating the scale and scope of the response of the global community, trans-boundary challenges such as regulation of virtual assets, dealing with cross border remittances, and also the issue of global capital flows and how to create buffers and safety nets for developing countries that get affected by spillovers from developed countries policies.

He said that the quantum of climate finance, availability, the terms on which such finance is made available, disclosure standards and other such issues will be part of the climate finance agenda in G-20.

“There is a need to balance the growth aspirations and climate considerations for many developing economies because we have forgotten that the pandemic, the commodity shock, and the monetary tightening in the developed world have all basically derailed the growth path that many countries would have expected at the beginning of this decade,” he said.