RBI Governor Shaktikanta Das on Thursday emphasised the need to chalk out an effective strategy for global cooperation and coordination to deal with multiple challenges afflicting the global economy.

Addressing the South East Asian Central Banks (SEACEN) Governors Conference here, Das said, “Multilateralism must be re-energised. In this regard, agreements on a “critical minerals corridor” and a “food corridor” for safeguarding food security are necessary. Such arrangements have to be fair and equitable.”

He also pointed out that there was a need to develop cooperation in areas of common interest and urgent needs, such as climate change where no country can devise strategies on its own. Smooth and orderly green transition was necessary to avoid disruptions to economic activity and loss of growth potential.

While the investment needs for smooth green transition are large, the actual financial flows to green projects are highly skewed and are, by and large, concentrated in advanced economies. As a result, there is a need to enhance green capital flows to EMEs. At the same time, we have to be mindful of potential financial stability implications of green transition.

Das stated that improving infrastructure remains key to long-term growth. While investment in hard infrastructure (roads, ports, airports, electricity, water) is important, there has to be equal emphasis on creating soft infrastructure (education, health, legal, financial, institutional).

The RBI Governor observed that India’s experience has shown how Digital Public Infrastructure (DPI) can be utilised for advancing financial inclusion and productivity gains through cost reductions. He mentioned the success of the Unified Payments Interface (UPI) and its potential to become an international model for cross-border payments.

He also said that new technological developments like artificial intelligence (AI) and machine learning (ML) can bring about significant improvements in efficiency and productivity of businesses. Necessary safeguards, however, need to be put in place to prevent the misuse of technology. In particular, global financial market regulators need to be vigilant about the possible misuse of AI and ML in perpetrating financial fraudulence, he added.