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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 ?
Explanation
The correct answer is Option 3 (Both 1 and 2) because the G20 Common Framework for Debt Treatments is a joint initiative designed to coordinate debt restructuring for vulnerable nations.
- Statement 1 is correct: The framework was officially endorsed in November 2020 by the G20 along with the Paris Club (a group of mostly Western creditor nations). This partnership was significant as it brought major non-Paris Club creditors, specifically China, into a common coordinated platform for the first time.
- Statement 2 is correct: The primary objective of the framework is to assist Low Income Countries that face unsustainable debt levels, exacerbated by the COVID-19 pandemic. It allows these countries to apply for debt relief or restructuring to ensure long-term fiscal sustainability.
Since both statements accurately describe the origin and purpose of the initiative, Option 3 is the right choice.
PROVENANCE & STUDY PATTERN
Guest previewThis question tests the 'Institutional Architecture' of global crisis response. It is a pure Current Affairs question derived from the post-COVID debt crisis. The key was recognizing the historic collaboration between traditional Western creditors (Paris Club) and emerging creditors like China (via G20).
This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.
- Explicitly states the framework was jointly developed by the G20 and the Paris Club.
- Links the joint development to the post-COVID context when the initiative was launched.
- Describes the Common Framework as an agreement of G20 and Paris Club countries.
- Frames the initiative as a formal arrangement between those groups.
- Notes the agreement includes all members of the G20 and the Paris Club, indicating joint endorsement.
- Mentions formal adoption and publication steps tied to G20 processes.
Defines G20 as a forum of major economies that brings members together to discuss key global economic issues, implying it can launch collective initiatives or frameworks.
A student could use this to infer that if the Common Framework exists it may plausibly have been launched by the G20 and then check whether another creditor group (Paris Club) was formally involved.
G20 is explicitly credited with creating specific initiatives (Global Infrastructure Outlook via the Global Infrastructure Hub), showing the G20 launches themed institutional initiatives.
One can extend this pattern to ask whether the Common Framework follows a similar model (G20-originated) or whether it names/credits an external creditor body such as the Paris Club.
Describes the G20 producing concerted work that led to an international multilateral instrument (MLI) signed in Paris, showing G20-driven processes can culminate in instruments signed at/with other venues or actors.
A student might use this as a precedent to consider that the Common Framework could be a G20-driven product that involved or was later coordinated with other creditor groups (e.g., Paris Club) and then look for explicit joint endorsement.
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