Stating that the advanced countries in the G20 have clearly indicated their unwillingness to move ahead on reforming international financial institutions, including the IMF and World Bank, finance minister P Chidambaram on Wednesday said that it has hampered credibility of the G20 and made it difficult to progress on other issues as well.
Speaking at an event organised by the think-tank ICRIER, he also said the agenda setting of G20 has an advanced country perspective so far. He added that since the growth in emerging markets is crucial to the strength of the global economy, it is critical that G20 find ways to take up issues of importance to emerging economies.
However, he said that, "Considering the range of complex issues confronting the world economy, and the persistent weak recovery, it is important for all countries that G20 continues to be successful."
Elaborating on the claim that the agenda setting of G20 has had an advanced country perspective, the minister said as the financial crisis originated in the advanced countries, it was natural that higher capital requirements and asset quality have been stressed in the Basel norms for banking sector.
"Emerging markets have accepted these norms in a spirit of multilateralism. However in the context of a weak global recovery, we should be careful that the procyclical bias should not be a stumbling block in developing countries," he said. If the G20 does not take up issues of importance to emerging economies as otherwise, it may evolve as a loose forum instead of a powerful steering wheel of global governance, he said.
Noting that many experts have expressed concern that the G20 agenda has been covering far too many unrelated issues, he said in order to be able to play a meaningful role in the global governance, the G20 agenda should be sharper, and focused only on those issues on which it can make a distinctive contribution particularly on economic and financial issues.
The minister pointed out that though the G20 leaders had mandated the G20 finance ministers and central bank governors in the Los Cabos Summit in 2012 to consider ways in which the G20 can ensure the availability of sufficient funding for infrastructure projects. The mandate was broadened this year to cover financing for all kinds of investment.
"This is surely an opportunity loss, and we hope that the matter would be taken up more meaningfully