With reference to the "G20 Common Framework", consider the following statements:

1. It is an initiative endorsed by the G20 together with the Paris Club.

2. It is an initiative to support Low Income Countries with unsustainable debt.

Which of the statements given above is/are correct ?

The correct answer is Both 1 and 2.

Key Points

• G20 Common Framework 
  • Chad has become the first country to officially request a debt restructuring under a new common framework “G20 Common Framework” introduced by China and other groups of 20 countries last year with the help of the Paris Club.
  • It is the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI).
  • Initiative endorsed by G20 together with Paris Club. Hence, Statement 1 is correct.
  • The Common Framework is intended to deal with insolvency and protracted liquidity problems, along with the implementation of an IMF-supported reform program.
  • It was announced in November 2020 to deal with the issue of unsustainable debts faced by various countries as an impact of COVID-19. Hence, Statement 2 is correct.
  • Paris Club is a club or group of officials from major creditor countries.
  • It was established in the year 1956.
  • It aims to find sustainable solutions to the difficulties faced by debtor countries in payments.

Additional InformationG20

• The G20 or Group of 20 is an intergovernmental forum comprising 19 sovereign countries, the European Union (EU), and the African Union (AU).

• The G20 was founded in 1999 in response to several world economic crises.Since 2008, it has convened at least once a year, with summits involving each member's head of government or state, finance minister, or foreign minister, and other high-ranking officials.

• ​Economic Significance
  • Collectively, G20 members represent approximately 85% of global GDP, over 75% of global trade, and about two-thirds of the world’s population. This makes it one of the most influential forums for addressing global economic challenges.
• Structure: ​The G20 operates through two main tracks:
  • Finance Track: Led by Finance Ministers and Central Bank Governors focusing on economic policy coordination.
  • Sherpa Track: Led by Sherpas (personal representatives of leaders) focusing on broader issues beyond finance.
• Recent Developments
  • India holds the G20 Presidency from December 1, 2022, to November 30, 2023. The theme for India's presidency is "Vasudhaiva Kutumbakam," which translates to "One Earth. One Family. One Future." This theme emphasizes global unity and cooperation in addressing shared challenges.
  • The African Union (AU) was officially made a permanent member of the G20 during the summit held in New Delhi on September 9, 2023. This significant development aims to enhance Africa's representation in global governance and decision-making processes.
• Priorities During India's Presidency
  • Green Development and Climate Finance
  • Accelerated Inclusive Growth
  • Technological Transformation
  • Multilateral Institutions for the 21st Century
  • Women-led Development