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In-Depth Jobs


Issue no 50, 11-17 March 2023

G20 and India's Leadership Together to Achieve More

 

Dr. Rahees Singh

The G20 was founded in 1999 after the Asian financial crisis as a forum for the Finance Ministers and Central Bank Governors to discuss global economic and financial issues. The G20 Summit is held annually, under the leadership of a rotating Presidency. The G20 initially focused largely on broad macroeconomic issues, but it has since expanded its agenda to inter-alia include trade, sustainable development, health, agriculture, energy, environment, climate change, and anticorruption. The G20 was upgraded to the level of Heads of State/ Government in the wake of the global economic and financial crisis of 2007, and, in 2009, was designated the "premier forum for international economic cooperation". With the Presidency of G20, India wants to take the whole world forward with the idea of 'One Earth, One Family, One Future'. This is the demand of today's time as well, but to what extent the forces which have brought the world to the door of the Cold War, will participate to build a common future by accepting the essence of 'One Family' or ‘वसुधैव कुटुंबकम', only time will tell. During the Bali Summit (Indonesia), where India assumed the presidency of the G20, Prime Minister Narendra Modi focused on the pillars on which the progress and prosperity of the world rest. The first topic was Food and Fertilizer Security. The Prime Minister said that we should make a mutual consensus to stabilize and assure the supply chains of both food and fertiliser. This is necessary because climate change and geopolitical conflicts are creating a crisis of food grains as well as fertilizers. Today, the world may not be taking the fertilizer shortage very seriously, but it is the food crisis of tomorrow. Therefore, there is a need for integrated and comprehensive cooperation in this direction. The second topic put forth by the Prime Minister was energy security, which is necessary for the fastest growing economy like India as well as for global growth. The energy crisis triggered by the Russia-Ukraine conflict is a clear indicator of global recession. Though the outcome is yet to become obvious, many global organisations including the International Monetary Fund have already announced bleak forcasts for the global economy. The third topic was - Digital Transformation. In fact, in today's era 'IQ' (Intelligence Quotient) has become very influential. Two decades ago, Kofi Annan, the then Secretary-General of the United Nations, attracted the world's attention when he said that new information and communication technologies are the driving force of 'globalisation' because they allow people, countries, communities and systems to connect with each other and bring them closer. But the world probably did not pay much attention to the fact that in this era of 'knowledge meritocracy', the decisive battle against poverty is not being fought due to the digital divide. That's why even socio-economic transformation is not possible. Prime Minister Narendra Modi in Bali effectively drew the attention of the world towards this again and put forth the idea and vision of India to realise the hopes of 'One Future'. The theme of G20 - 'One Earth, One Family, One Future' is the result of this idea. India has been living with the idea of 'Jai-Jagat' for millennia. Our thousand years old culture has taught us that while we strive for our own progress, we also envision global progress. This is because we not only have the world's most prosperous and vibrant democracy, but we also have the values of democracy and a glorious tradition as the 'Mother of Democracy'. India's heritage not only harbours the proof of rich diversity and uniqueness, but also introduces us to a long tradition of knowledge and experience. In other words, India not only has values and virtues, it also has the potential for value addition. Therefore, if the world tries to imbibe the values and ideas of India from the platform of G20, then surely the way towards 'Vasudhaiva Kutumbakam' will be paved. Today's world is going through many types of tensions and conflicts and multilateral and international organisations have failed to find apt solutions for the same. In such a situation, Buddha's message of freedom from war and the solution offered by Mahatma Gandhi in resistance to violence are not only relevant but also indispensable. Only India can give this message to the world. The G20 'Logo' released by India reflects a 'spirit', a 'resolution', a 'mantra' (Vasudhaiva Kutumbakam) which contains the essence of our mythological heritage, our faith, and our intellect. In fact, global conditions are also favorable for India. India has got the leadership of G20 at a time when, on one hand, the world is making meaningful efforts to recover from the global pandemic, while on the other hand, the Russia-Ukraine war seems to be dividing the world again.

The Russia-Ukraine conflict has highlighted to major shortcoming in the current global order - (1) global supply chain vulnerability and (2) ineffiency of multi-national institutions. Prime Minister Shri Narendra Modi, while addressing the G20 noted that multilateral organisations like the United Nations have failed to find solutions to the current challenges and bring about appropriate reforms. It is natural that in such a situation, the responsibilities of a forum like G20 not only increase but also the expectations of the world, especially the developing South, from India as the President of this forum.

In fact, the G20 was initiated by the Finance Ministers and Central Bank Governors of the major 7 industrialised countries (G7) as a premiere forum for international cooperation on important global economic and financial issues, with the objective of:

1.      Policy coordination among member countries to achieve global economic stability and sustainable development;

2.      Encouraging financial regulations that reduce risks and protect against future financial crises

3.      Modernising the International Financial Architecture.

In practice, the G20 brings together the Finance Ministers and Central Bank governors of 19 countries and one group (the European Union). These 19 countries are- India, Argentina, Australia, Brazil, Canada, China, France, Germany, Indonesia, Italy, Japan, South Korea (Republic of Korea), Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, United States of America. This step was necessitated because the Asian economic crisis in 1997-98 had brought the Asian Tigers to the position of 'Lame Duck'. Although the major developed countries did not cooperate with the countries of South-East Asia in this, the Finance Ministers of G7 countries (Canada, France, Germany, Italy, Japan, UK, and United States of America) and Governors of Central Banks met in Washington and came to this conclusion - "It has been observed that major developing countries are not adequately involved in discussions and decisions related to global economic issues."As a result, Finance Ministers and Governors of Central Banks made a new beginning of annual meetings. It started in December 1999 from Berlin. Nevertheless, it can be assumed that till the economic crisis of 2008, this forum remained an elite "Tea Party" and could not make much more progress. Perhaps also because before 2008 the big economic powers of the world had not come under the grip of the financial crisis. The year 2008 was more significant from this point of view as superpower America became the epicenter of the financial crisis. It was natural that the rest of the capitalist world would also fall prey to it, especially the countries of Western Europe. Therefore, in the year 2008, this group of Finance Ministers and Central Bank Governors of G7 was forced to regroup into G20. In November 2008, in Washington, 20 world leaders (19 countries and one European Union) agreed to create an action plan to stabilise the global economy and prevent future crises. In their very first meeting in Washington, the G20 leaders reached a general agreement aimed at ensuring mutual cooperation by identifying key areas responsible for economic growth. With this, a consensus was reached on three points regarding the increase financial crisis

a.       Restoring global economic growth,

b.      Strengthening the international financial system, and

c.       Reforming international financial institutions.

The presidency of the G20 rotates among its members on an annual basis. The Presidency is headed by a management group consisting of three members, past, present and future, preferred as the 'Troika', with the objective of transparency, fairness and devolution of powers from one speaker to another. In this, apart from the Leaders' Summit, the ongoing works have been divided into two tracks - one is the Sherpas track and the other is the Finance track. One of these considers the policies and the other on the financial conditions. Its basic principle is mutual cooperation. But now its dimensions have become very broad which include free trade, climate change, immigration, sustainable development and global stability, terrorism etc. Although there were some contradictions within the G20 from the beginning, due to which at least two axis were seen to develop inside it, especially after the St. Petersburg Summit serious discussions, polarisation appeared to be more intense. If the trend of America, Germany, Britain etc. standing on one end and Russia and China standing on the other continues, then the meaningfulness of the objectives will be doubtful. Generally, the themes of G20 conferences and the topics accepted in the summit have been topical and essential, but it is difficult to say how meaningful they have been. The then British Prime Minister Gordon Brown said at the London Conference of the G20 (2009) that our aim is to formulate a new strategy for dealing with the economic crisis around the world. But did it happen? If so Portugal, Ireland, Greek, Spain would not have reached the brink of bankruptcy. None other than the policies of the European Central Bank were responsible for this. At the Brisbane (2014, Australia) summit of the G-20, concerns were expressed regarding the serious human, social and economic impacts. At Antalya (2015, Turkey) top priority was given to increase global economic growth to provide better standard of living and quality jobs for people all over the world. But, the current reality does not reflect this resolve. During COVID pandemic, the whole world saw this unity and common efforts flying to pieces.

There are other reasons for this lack of coherence:

a.       G-20 members are responsible for 85 percent of the world's production, but they have different economic and political systems and their way of implementing policies are very different.

b.      The measures that the G20 countries are taking mainly advocate a 'freemarket' framework but the same framework that has been used to deal with regional crises (Asian crisis, Argentina, Mexico, Eurozone....etc.) has failed to generate and get the global economy out of the crisis

c.       In today’s world, on some fronts, US is considered superior, on some fronts China is considered superior. while there is commotion in the Indo-Pacific under Xi Jinping's leadership, and somewhere there is unrest in the Eurasian zone under Vladimir Putin's regime. While the uncertainities in the policies and practices of the US administration has led to demands for re-organisation of the world order, and somewhere, there are evident cracks in the idealistic model of Europe (the optimum unity of the EU or Eurozone).

d.      Protectionist policies of some nations, trade war between US and China, cyber-attacks etc. are creating tensions that it seems that the world is again returning to the Cold War era.

Nevertheless, time is ripe for reviving the idea of 'Jai-Jagat' and present it in front of the modern world.

 

(The author is a journalist who regularly writes on international and economic affairs.) E-mail : raheessingh@gmail.com

Views expressed are personal.