Yellen emphasizes debt distress, multilateral development bank evolution, support for Ukraine, and global tax deal
Gandhinagar, India – In a press conference held in Gandhinagar, India, Secretary of the Treasury Janet L. Yellen outlined the key priorities for the United States during her visit. Yellen expressed her gratitude to Finance Minister Sitharaman and the Indian delegation for hosting the G20 ministerial, emphasizing the importance of strengthening the global economy, supporting emerging and developing economies, and addressing global challenges.
Debt Distress in Emerging Markets and Developing Countries
Secretary Yellen stressed the need to alleviate debt distress in emerging markets and developing countries, citing the mounting debt vulnerabilities caused by the COVID-19 pandemic and Russia’s illegal war against Ukraine. She highlighted that over half of all low-income countries are currently near or in debt distress, impeding their ability to attract investments and hindering their economic growth. Yellen urged for timely debt treatments and the full participation of all bilateral official creditors, citing the recent progress made in the case of Zambia. She emphasized the importance of applying common principles agreed upon in debt relief cases and expediting debt treatments for countries such as Ghana and Sri Lanka.
Multilateral Development Bank Evolution
Yellen underscored the United States’ commitment to evolving the multilateral development bank (MDB) system to address global challenges effectively. She highlighted the collaboration between the World Bank and the U.S. coalition in making significant changes, such as updating the World Bank’s mission statement and refreshing its operating model. Yellen emphasized the need for the MDBs to allocate additional resources to combat global challenges, explore lending options for sub-sovereign and supra-sovereign actors, streamline the climate finance architecture, and enhance private capital mobilization rates. She applauded the recently released G20 MDB Experts Group report, which emphasizes the incorporation of global public goods into the MDBs’ mandates and calls for ambitious private sector engagement.
Support for Ukraine
Secretary Yellen reaffirmed the United States’ unwavering support for Ukraine in its defense against Russia’s illegal and unprovoked attack. She shared her personal experience from her visit to Kyiv earlier this year, witnessing the bravery and resilience of the Ukrainian people. Yellen stressed the importance of foreign assistance in providing critical support to Ukraine’s resistance and underscored the United States’ commitment to combating Russia’s efforts to evade sanctions.
Global Tax Deal
Yellen briefly mentioned the ongoing efforts to make the international tax system fairer in the 21st century. She highlighted the historic agreement reached two years ago on a Two-Pillar solution to address the tax challenges of digitalized and globalized economies. Yellen emphasized the implementation of a global minimum tax on the earnings of large multinationals, which aims to end the race to the bottom on corporate tax rates. She expressed the United States’ commitment to consistent implementation and reaching an agreement on the reallocation of taxing rights.
In the question and answer session that followed, Secretary Yellen fielded inquiries from the press on a range of topics, including global economic recovery, climate change, and the United States’ relations with China.
Overall, Secretary Yellen’s remarks underscored the United States’ commitment to addressing pressing global economic challenges, promoting inclusive growth, and strengthening international cooperation to tackle shared concerns.