Why in News ?
G7 backs extension of debt freeze as the coronavirus attacked global economies recently. G7 finance ministers backed an extension of a G20 bilateral debt relief initiative for the world’s poorest countries.
- But it must be revised to address shortcomings hindering implementation.
Extension of debt freeze
- Some nations will need further debt relief going forward
- Urged the Group of 20 major economies and Paris Club creditors to agree on terms by next month’s meeting of G20 finance ministers.
- Private creditors to implement the Debt Service Suspension Initiative (DSSI) on a voluntary basis when requested by eligible borrowers.
- Group also called on multilateral development banks, such as the IMF and World Bank to further explore the options for the suspension of debt service payments over the suspension period.
- Besides private creditors to participate in the initiative on comparable terms.
- Criticism over China
- In order to avoid the participation countries like China classify State-owned financial institutions as commercial lenders.
Group of Seven
- G-7 or ‘Group of Seven’ are Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
- It is an intergovernmental organisation that was formed in 1975 the top economies
- It is an informal forum to discuss pressing world issues like the oil crashes of the 1970s, the economic changeover of ex-Soviet bloc nations, and many pressing issues such as financial crises, terrorism, arms control, and drug trafficking.
- Canada joined the group in 1976, and the European Union began attending in 1977.
- In between Russia was included and in 2014 it was excluded as a result of annexation of the Crimea region of Ukraine.
- The G-20 is a larger group of countries, which also includes G7 members.
- In fact the rise of India, China, and Brazil over the past few decades has reduced the G-7’s relevance.
Source : The Hindu
Topic
GS II : Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
Current Affairs Compilation : 26 September 2020