At the G20, the World Bank is concerned that the gap between the rich and the poor is increasing.

Gathering in India, the G20’s big money makers attacked tax reform and multilateral donors with little progress on debt restructuring, while the World Bank worried about the growing gap between rich countries and poor countries. Many economies are in crisis following the double whammy of the coronavirus pandemic and the consequences of Russia’s war in Ukraine, affecting fuel and raw material prices around the world. Furthermore, climate change worsens the situation in the poorest countries and those countries that are least able to recover.

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effects of the war in ukraine

The intervention came a day after Russia refused to extend an agreement authorizing Ukrainian grain exports by the Black Sea at a G20 meeting in Gandhinagar in the Indian state of Gujarat (west). This angered the United Nations, warning that millions of the world’s poorest people would “pay the price”. German Central Bank President Joachim Nagel said: “We are living in complicated times; I should mention the fact that Russia yesterday (Monday) withdrew from the Black Sea Initiative and Ukraine – and we are here to discuss that.” How to help weak countries. He further added, “It is really strange and many countries have blamed Russia for doing this.”

World Bank President Ajay Banga on Tuesday expressed concern over the dangerous divide in the world economy in the absence of progress in the fight against poverty. “What keeps me awake at night is the mistrust that quietly divides the north and south of the planet at a time when we need to unite,” Ajay Banga told ministers during a discussion on international financial structures. South can be understood. In many ways, they are paying the price for our prosperity”.

He added, “Although they should proceed, they fear that the promised resources will be used to benefit the reconstruction of Ukraine.” According to him, “they feel that regulations on energy are not enforced uniformly, which limits ambition, and they fear that the poverty reign will break down a new generation.”

“The Secret of Poverty”

The World Bank is working to increase its lending capacity, including raising hybrid capital from shareholders, but said the future economy cannot be built on expansion at the expense of the environment. “The truth is simple: We cannot tolerate another period of CO2-intensive emissions-intensive growth,” insisted Ajay Banga, an Indian-American who took up his position at the bank last month, after being appointed by US President Joe Was appointed by Biden.

According to the United States, reform efforts by multilateral donors such as the World Bank and regional institutions could yield $200 billion over the next decade. Debt restructuring deals for low-income countries have been top of the agenda of the Group of Twenty major economies, but little progress has been made in talks, officials say. US Treasury Secretary Janet Yellen said more than half of low-income countries are in debt or at risk, double the number in 2015.

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China, the world’s second-largest economy and biggest financial backer of many struggling, low-income countries in Asia and Africa, has so far resisted a common multilateral agreement on the issue. The finance ministers of neighbors and rivals India and China met on Tuesday morning and “discussed their economies, inflation, trade and recognized the importance of a good business environment”, according to the Indian finance ministry.

G20 discussions also focused on reforming multilateral development banks, regulating cryptocurrencies, and facilitating access to finance to mitigate and adapt to climate change. Last week, 138 countries agreed on a first step to more fairly distribute tax revenue from multinationals.

(with AFP)