Third meeting of G20 Finance Ministers and Central Bank Governors (FMCBG) under the Indian G20 Presidency 17-18 July 2023, Gandhinagar, Gujrat

1. The Third G20 Finance Ministers and Central Bank Governors(FMCBG) meeting under the Indian Presidency was held during 17-18 July 2023 in Gandhinagar, Gujarat. The meeting was jointlychaired by Hon’ble Minister of Finance and Corporate Affairs, Ms.Nirmala Sitharaman, and Governor, Reserve Bank of India, Mr.Shaktikanta Das. Over 500 delegates, including Finance Ministersand Central Bank Governors from G20 member countries, InviteeCountries, and Heads of various International Organizations (IOs)participated in the meeting. The FMCBG meeting was preceded bythe Third G20 Finance and Central Bank Deputies (FCBD) meetingduring 14-15 July 2023 in Gandhinagar, Gujarat.

2. Under the Indian Presidency’s theme of “One Earth, One Family,One Future”, G20 Ministers and Governors pledged to prioritize thewell-being of the people and the planet and reaffirmed theircommitment to enhancing international economic cooperation,strengthening global development for all and steering the globaleconomy towards strong, sustainable, balanced, and inclusivegrowth (SSBIG).

3. The meeting was organized in five thematic sessions coveringGlobal Economy and Global Health, Sustainable Finance andInfrastructure, International Financial Architecture, InternationalTaxation, and Financial Sector & Financial Inclusion.

4.Hon’ble Finance Minister, in her welcome remarks, reiterated thecollective responsibility of G20 to steer the global economytowards strong, sustainable, balanced, and inclusive growth. Themeeting discussed the key deliverables of the Finance Track underthe Indian G20 Presidency for 2023. The Indian Presidencyreceived wide support on all the agenda items.

5. Members discussed the global economic outlook and risks,including macroeconomic implications of food and energyinsecurity as well as climate change. Members endorsed the ‘G20Report on Macroeconomic Risks Stemming from Climate Changeand Transition Pathways’.

6. Under the priority of strengthening Multilateral DevelopmentBanks (MDBs) to address global challenges of the 21st century,members recognised the urgent need to strengthen and evolvethe MDB ecosystem. Members appreciated the efforts of the G20Independent Expert Group on Strengthening MDBs constituted bythe Indian Presidency earlier this year. The Expert Group hasprepared Volume 1 of the Report, and Volume 2 is expected inOctober 2023. Noting Volume 1’s recommendations,membersshared that the MDBs may choose to discuss theserecommendations to enhance their effectiveness. A High-LevelSeminar will be held on the sidelines of the Fourth FMCBG meetingin October 2023 on strengthening the financial capacity of MDBs.G20 members also endorsed a ‘Roadmap for Implementation ofRecommendations of the G20 Independent Review of MDBs’Capital Adequacy Frameworks (CAF)’. This Roadmap will helpunlock more lending resources in MDBs.

7. Managing global debt vulnerabilities is a significant priority areafor 2023, reflecting the Indian Presidency’s endeavor to voice theconcerns of the Global South. G20 Members have activelydeliberated on how to strengthen multilateral coordination toeffectively address the deteriorating debt situation and facilitatecoordinated debt treatment for debt-distressed countries.

G20 Members welcomed the progress achieved on variousongoing debt treatment cases under the Common Framework andbeyond, and called for swift and timely resolution of these cases.They also emphasized the importance of addressing debtvulnerabilities in low and middle-income countries in an effective,comprehensive and systematic manner. The G20 encouraged theefforts of the Global Sovereign Debt Roundtable (GSDR) towardsstrengthening communication among key stakeholders tofacilitate effective debt treatment. The GSDR is chaired by India,IMF and the World Bank.

8. The Indian Presidency has brought the Digital PublicInfrastructure (DPI) agenda into the G20 discussions. Membersacknowledged the transformative role of DPI in rapidly advancingfinancial inclusion and productivity gains. The Ministers andGovernors lauded India’s pioneering efforts in leveraging DPIs toaccelerate financial inclusion to the last mile. While noting thatharnessing DPIs can help countries to leapfrog their developmenttrajectories, the members unanimously endorsed the ‘G20 PolicyRecommendations for Advancing Financial Inclusion andProductivity Gains through Digital Public Infrastructure’.developed under the Indian Presidency. These policyrecommendations will be instrumental in guiding the G20 and non-G20 countries to leverage DPI for fast pacing their developmentprocesses and achieve strong and inclusive growth. The G20FMCBGs endorsed the new G20 2023 Financial Inclusion ActionPlan (FIAP) for the three years 2024-26, the FIAP provides anaction-oriented and forward-looking roadmap for rapidlyadvancing financial inclusion of individuals and MSMEs in G20 andbeyond by focusing on action areas which inter alia focus onpromoting technological, innovations and digital infrastructureincluding DPI. Also, India has been appointed as one of the Co-Chairs of the GPFI and in its capacity of Co-Chair, India will leadthe implementation of the new FIAP for the next three yearsstarting from 2024.

9. The Indian Presidency has prioritised the need to considermacrofinancial implications of crypto assets along with financialstability concerns. The Presidency has also focused on bringingthe specific concerns of the Global South onto the crypto assets’agenda. As a result, the IMF had, in February, presented a paperon the macrofinancial implications to the 2nd G20 FMCBG. TheFinancial Stability Board (FSB) has also included sections on EMDEconcerns in its forthcoming reports and deliberations. Incontinuation of this process, in the July meeting, the G20members welcomed the high-level recommendations of the FSBon crypto-asset activities and global stablecoin arrangements.

10. While the work of preparation of Synthesis paper is underway,the Indian Presidency has submitted a “Presidency Note” to theG20 membership laying down important inputs for a Roadmap oncrypto assets. The Roadmap, to be contained in the SynthesisPaper will support a coordinated and comprehensive policy andregulatory framework taking into account the full range of risks,and risks specific to the emerging market and developingeconomies (EMDEs) and ongoing global implementation of FATFstandards to address money laundering and terrorism financingrisks. The G20 now looks forward to receiving the IMF-FSBSynthesis Paper, along with the Roadmap, before the Leaders’Summit in September 2023.

11. To further enrich the ongoing policy work around crypto assets,a Round Table discussion titled “Policy Dialogues on CryptoAssets” was organized on the sidelines of the 3rd FMCBG atGandhinagar. The aim of the round table session was to discussand deliberate on some of the key questions pertaining to thecrypto assets, in an open and candid manner. I am pleased toinform you that the session saw active participation from theFinance Ministers, Governors, and the Heads of IMF, FSB, and FATF– institutions that are instrumental in the on-going work on cryptoasset ecosystem. The views generated in the round tablediscussion will provide important inputs to the Synthesis paper

12. The Indian G20 Presidency has also brought climate financediscussions to the forefront. Members welcomed therecommendations on the mechanisms to support timely andadequate mobilisation of resources for climate finance, preparedby the Sustainable Finance Working Group. With the commitmentto scale up sustainable finance, members also welcomed theAnalytical Framework for SDG-aligned finance.

13. Members also discussed taking forward global efforts inpandemic prevention, preparedness and response throughenhanced collaboration between Finance and Health Ministries.Members welcomed the discussion on the Framework on EconomicVulnerabilities and Risks (FEVR) arising from pandemics, whiletaking into account country-specific circumstances.

14. On the infrastructure agenda, members showed strong supportfor work under the Indian Presidency’s priority of ‘Financing theCities of Tomorrow’. The Principles designed by the IndianPresidency will enable cities to develop customised policies thatencourage alternative financing sources and enable greaterpublic-private collaboration to bridge the infrastructure financinggap in our cities.

15. A G20 Infrastructure Investors’ Dialogue on ‘LeveragingFunding and Financing Mechanisms and Approaches for the Citiesof Tomorrow’ was also held on 16 July, 2023. Panel discussionsfocused on mechanisms for de-risking projects, better urbanplanning, innovations in blended finance, harnessing technologicalinnovations, capacity building and augmenting support fromgovernments & MDBs in developing climate-resilient andsustainable city infrastructure. Learnings from practicalexperiences of countries enriched the discourse immensely.

16. On the tax agenda, members appreciated the significantprogress made with respect to the two-pillar international taxpackage and called for the finalization of the pending work as perthe agreed timelines. Members welcomed a plan for additionalsupport and technical assistance for developing countries anddiscussed the need to ensure that G20 efforts to enhance taxtransparency translate into effective outcomes.

17.Members noted with great interest, the discussions held at theG20 High-Level Tax Symposium on Combatting Tax Evasion,Corruption and Money Laundering organised by the IndianPresidency on 16 July, 2023 on the sidelines of the FMCBGmeeting. Panelists included Heads of FATF and OECD, theEuropean Commissioner for Economy and the Finance Minister ofIndonesia. This Symposium initiates a debate on the effectivemultilateral response required to counter tax evasion, corruptionand money laundering. The panelists acknowledged that financialcrimes are complex, operate across international borders anddeprive governments both in developed and developing countriesof much needed resources. They stressed the need for greatercooperation, both domestically and internationally. The paneldiscussion also delved into strategies that can be developed for acoordinated response for fighting tax crimes and other financialcrimes.

18. Hon’ble Finance Minister also engaged in various bilateraldiscussions with her counterparts on the sidelines of the FMCBGmeeting.

19. The delegates were hosted for ‘Ratri Bhoj Par Samvad’(Conversation over Dinner), preceded by cultural programscurated by the Government of Gujarat, showcasing Gujarat’splace in civilisational history and its contribution to India’s tradeand entrepreneurship.

20. Excursion events are also planned for the delegates on 19 July2023. The delegates will be provided opportunities to experienceGujarat through visits to Adalaj Step wells, Sabarmati Ashram,Sabarmati River Front, Patan and Modhera.21. The Third G20 FMCBG meeting concluded with a G20 ChairSummary & Outcome Document comprising 26 paragraphs and 2Annexes. The Chair Summary reflects the deliberations held duringthe meeting and conveys the wide support that the Indian G20Presidency received for various deliverables envisaged for 2023.22.The discussions held during the Third G20 FMCBG meeting willinform the Leaders for the G20 Summit to be held in India inSeptember, 2023. The G20 FMCBGs will meet next in October 2023in Marrakesh on the sidelines of IMF/WBG Annual Meetings.23. With a vision reminiscent of Mahatma Gandhi's teachings, theFinance Ministers and Central Bank Governors of G20 countries,envisages a future in which every nation thrives, prosperity iswidely shared, and the well-being of humanity and the planet areharmoniously intertwined.

Gandhinagar
July 18, 2023