Finance Minister Nirmala Sitharaman on Friday said businesses will have to factor in the impact of global terror while making investment decisions. Addressing the Kautilya Economic Conclave 2023, she said terrorism is impacting the entire globe and no region is spared.
With that level of risk or uncertainty coming into business decision-making, investments will face uncertainty and high risk permanently, she said.
“Businesses can no longer be just attracted by policies or by the openness of an economy. The risk that investors and businesses will have to factor into their decision-making is going to be strongly influenced by the impact of global terror,” she said.
On globalisation, she said there is pessimism about it and there is talk of re-globalisation… how strategic blocks are reshaping itself.
“Who is grouping with whom, who has left the Group and who and who is remaining outside of all these groups or forming new groups. So re-globalisation but with different shades and colour and flavour,” she said.
On climate finance, Sitharaman said India used its own resources to fulfil its Nationally Determined Commitments (NDCs) as outlined in the Paris Agreement under the leadership of Prime Minister Narendra Modi.
Anyone suggesting that this should be an obvious course of action must also consider that developing countries may not have the financial capacity for such significant climate financing, she said.
“Consider a country like India, where developmental goals and aspirations are being achieved at an unprecedented pace and where a significant portion of the population still requires support. The question arises: Where will the necessary funds come from?,” she questioned.
With regard to energy transition, she said the world does not have an answer to this.
“There is an urgent need for us to sit up and see what this climate action is going to be if you have no clue on where this transition energy is going to come from,” she said.
Speaking about G20 India presidency, Sitharaman said, the agenda of the Finance Track was chosen on considerations having global implications.
Spelling out some of the agenda items of the Finance track, she said these included readying Multilateral Development Banks (MDBs) for the 21st Century challenges, regulating crypto assets, debt distress due to lack of timely action by international institutions.
Besides, funding of futuristic cities, success of India’s Digital Public Infrastructure (DPI) and Two-Pillar solution on Taxation issues were also there.
Each one of the agenda points found a very good resonance in the G20 Presidency under India, she said.
To come up with a template to regulate crypto assets is one of the high points of India’s presidency, she added.
Last week, finance ministers of the G20 nations called for swift and coordinated implementation of the G20 roadmap to deal with the issues related to crypto assets.
The G20 Roadmap on Crypto Assets adopted by the G20 Finance Ministers was spelt out in a Synthesis Paper prepared jointly by the International Monetary Fund (IMF) and Financial Stability Board (FSB).
It is a detailed and action-oriented roadmap that will help coordinate global policy as well as develop mitigating strategies and regulations on such assets while also taking into consideration the specific implications on Emerging Markets and Developing Economies (EMDEs).
Going forward, regular updates on the progress of the roadmap will be provided by the IMF and the FSB in G20 meetings.
