the global financial crisis. At that summit, and subsequently in 2009 in London and Pittsburgh, they successfully advanced multilateral cooperation, updated global governance, promoted financial stability, and fostered strong, sustainable and balanced growth. Despite this heady start, the G20’s momentum flagged as the crisis faded and then Russia invaded Ukraine in 2014, Chinese statism increased, US-China tensions grew and Donald Trump was elected president of the US. Today, the G20 remains stunted. Yet there remains a strong imperative for renewed G20 cooperation to address common global challenges. ADDRESSING CLIMATE CHANGE Climate change is the greatest challenge facing the planet, but G20 members are falling far short in meeting the 2015 Paris Agreement’s objectives. The US advanced helpful legislation to curb emissions, but that will not suffice in meeting net zero goals, and the domestic political atmosphere is turning against further actions. China and India, along with the US, account for the bulk of global emissions, but they too are falling short. The International Monetary Fund estimates global fossil fuel subsidies are greater than 7% of worldwide GDP. Far more remains to be done. The multilateral development banks will play a pivotal role in helping emerging markets and lower income countries tackle climate change. They are finding creative ways of leveraging their balance sheets. But the amounts being generated are inadequate. The G20 should lead the international community in going big and backing MDB capital increases. That is not now in the cards. Alleviating low-income country debt distress is another key global challenge. The IMF, alongside the G20 Common Framework for Debt Treatment, has made progress in more quickly securing financing assurances, enabling reform programmes to be put in place. But official bilateral and private creditors are loath to lose money and thus drag their feet in providing relief, let alone timely relief. Reflecting creditor hesitation, borrowers are often being saddled with ‘extend and pretend’ unsustainable debt overhangs that likely consign them to a cycle of perpetual indebtedness. China remains an obstacle in this regard. The IMF should be more forceful in removing debt overhangs. More grant and concessional World Bank and IMF funding is desperately needed. To tackle these and other global challenges, the G20 is the right body. There will be much fanfare and lofty rhetoric at the G20 summit in Rio de Janeiro in November. But the real key will be to pull back the curtain, look at the facts and assess what was achieved. Can the G20 recapture its mojo? Increased public investment could help boost needed climate and infrastructure spending, laying a foundation for stronger sustainable growth”
MARK SOBEL Mark Sobel is US chair at the Official Monetary and Financial Institutions Forum. He represented the US on the International Monetary Fund executive board between 2015 and 2018, and was deputy
assistant secretary for international monetary and financial policy at the US Treasury between 2000 and 2015. He helped lead Treasury preparations for meetings of G7 and G20 finance ministers and central bank governors, formulated US positions at the IMF, and coordinated Treasury and regulatory agencies’ work in the Financial Stability Board. He played a key role in US foreign exchange policy including coordinating the Treasury’s semi-annual foreign exchange report on China and other countries.
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climate spending. Japanese debt levels need to be reined in. China has been wary of using fiscal space to spur the needed reorientation of growth away from excess investment towards greater consumption and services. US deficits are unsustainable, and its fiscal trajectory is daunting, but neither political party is ready to tackle America’s budgetary woes. Increased immigration could support growth, as is now evident in US activity data. But migration is a global flashpoint. G20 leaders first met in November 2008 in Washington amid
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2024 — G20 BRAZIL: THE RIO SUMMIT
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