World needs G20 and India: Top IMF official

New Delhi: With the pace of post-pandemic economic growth still uncertain and the world facing multiple crises, Kristina Kostial, Deputy Director in the Strategy, Policy and Review Department at the International Monetary Fund, spoke to The Sunday Guardian about the importance of India’s G20 presidency for reviving multilateralism and accelerating climate action. Excerpts:
Q: India has taken over the G20 presidency at a volatile time in international economy. What are your expectations from India’s G20 presidency? How can India make a difference?
A: India can make a big difference because what we need now is multilateralism, and we need the G20 in these challenging times. The world may not be in such a great shape, but it’s really the G20, which can pull it out of this deepening crisis. And we’ve seen that already at the G20 summit in Bali, where India played an important role in making the summit successful by helping forge a consensus on the Ukraine issue. I expect that India will have a similarly successful G20 presidency and the G20 summit in Delhi in 2023.
India can play a crucial role in setting the global agenda on green development and climate finance. Climate or nature-related swaps offer developing countries the opportunity to undertake urgently needed climate investments. The world is facing multiple challenges, including the crisis of climate and debt. The IMF can’t do this alone; we need others to scale up debt and climate swaps so that vulnerable countries can spend more on climate action.
Q: India has emerged as the world’s fifth-largest economy. In another 20 years, it will be the third-largest economy. What kind of role can India play in fixing the international economic order?
A: There is a lot to cheer about India’s economic growth and prospects. India has emerged as the fastest-growing emerging economy. What’s very important is that India brings in the perspective of an emerging market economy. In coming years, emerging market economies will play a very important role in G20 as India, Brazil and South Africa will hold successive presidencies of G20 in 2023, 2024 and 2025.
Q: What’s your take on reforming international financial architecture—a major priority of India’s G20 presidency?
A: There is wider recognition globally that global financial institutions need to be reformed and updated to make them more representative and inclusive by including major emerging economies such as India. IMF has already begun the process of reforms. We hope we can conclude the IMF quota review as planned in December next year (2023).
Manish Chand is Director, Centre for Global Insights India, a think tank focused on global
affairs.