India, which will hold the G-20 presidency next year, will have a difficult task as the group's chair to bring countries together on some of the key challenges being faced by the world, Pierre-Olivier Gourinchas, the chief economist of the IMF, said on Wednesday.
“One of the challenges for the G-20 right now, as we've seen, is of course how to deal with geo-economic fragmentation. And geo-economy fragmentation is just reflecting the fact that we've seen enormous tensions following the Russian invasion of Ukraine,” Gourinchas told PTI in an interview.
“To some extent to the G-20, it’s much harder to have these kinds of conversations around the common goods in the current environment because there is all this tension related to geopolitical considerations. And so, India will have a difficult task, but also, I would think one of the important objectives will be to keep the countries at the table, to keep the discussion going, keep progress being made on important issues,” he said in response to a question.
Describing G-20 as a very important institution, Gourinchas said the group is the one place where there is governance representing the majority of the global economy coming together.
It is not just a group of rich countries. It is really something that has multiple voices. A lot of progress can be made by G-20, he said.
“One of the things that we talk about quite often in the context of the G 20 is the common framework. It's a very important initiative. It's still finding its footing. We at the fund are somewhat frustrated with sometimes a lack of progress on the common framework,” he said.
But it's a really important initiative that could be made at the level of the global community, coming together and finding ways in which sustainability problems could be addressed, the chief economist said, adding that that is something which the IMF is looking at very closely.
Observing that at a venue like the G-20, multilateralism can really have discussions on common goods and make progress and common goods, Gourinchas said: “So what are the common goods that where progress could be made? Prominent among those include the issue of climate change and debt sustainability."
Digitalisation, he said, is very much at the forefront. “The whole issue of how the emergence of digital currencies, crypto assets, how is this going to stabilise, destabilise? How should we be doing? There are enormous externalities at the global level regarding the emergence of these new instruments. So how are we as a global community should we organise this space,” he said.
“Should we regulate it? How should it be regulated? The cross-border aspect is going to be very important. So that's obviously a common good,” Gourinchas said.