India can mark a turning point & re-energise G20

What does G20 mean to the common man? First, it must be something big as India is hosting the top 20 countries in the world which can be seen in the banners posted across the country along with the flags of the member nations. Second, all the cities that are being visited by the delegates have been spruced up making them look nice. Third, there has been a lot of business for the businesses like cloth, paints, banners, plant suppliers, conference halls, hotels, transport operators, guides etc. as there would be over 200 meetings held across almost 30 centres during a year, with the big one being in September in Delhi. Last, on the other side, there would be a host of inconveniences for the public every time the delegates arrive and depart as it involves ‘seamless’ travel.

What exactly is the G20 and how relevant is it? As the term suggests there are 20 nations involved where 19 are countries and European Union is the 20th entity. These nations together account for 80% of world GDP and 75% of exports covering 60% of the population. But ironically there is no formal office or secretariat and hence it is a formal get together of 20 entities to have informal discussions. The Presidency is by rotation which means that every member will get it chance and this has been the way since the financial crisis in 2008 though the forum was established in 1999. Last year it was driven by Indonesia and in the next two years will move to Brazil and South Africa. There are hence equal opportunities given to all the nations which strive to make a difference. We have taken up this challenge at a time when the world is in a phase of turmoil with political tensions and possible recession being topped by the recent banking crisis in the USA.

Hence unlike the WTO or IMF where there is a website linked with the organisation, in case of G20 the country which assumes Presidency does all that is needed to spread the word. The G20 will deliberate issues on climate change, finance, health etc. In fact, the separate chapters that exist range from anti-corruption to culture and infrastructure. But the twist here is that while there can be agreement, no country is forced to implement what is decided. Hence it can end up being just sharing of ideas, which may not be a bad thing given that these nations are the dominant ones.

Given India’s clout on the global stage, there are expectations that this summit will make a difference and that members do fall in line and help to foster policies which are mutually beneficial given that all nations are not ideologically tuned in one direction. For example, Donald Trump was vehemently against free trade, migration and climate change deliberations. In such a case arriving at a consensus would always be a challenge. Similarly while health is one issue which will dominate the proceedings, it is accepted that the G20 failed to do anything significant to alleviate the Covid situation as all countries followed their own policies. There was never a case of countries working together for a solution. Better communication across these nations could have helped to firm up a solution that could be used across the world - not just a case of preventing the spread but also ensuring that the vaccination drive was uniformly implemented.

At the political level, it is fairly impotent as the group has China and Russia as members, but will never be able to work out a solution on Ukraine as this issue will fall outside the perimeter. The distancing of nations from China’s political ambition in Taiwan or even the rise of extremism in Turkey make the Group quite irrelevant on the political front.

It would be interesting to also see if the countries can arrive at any agreement on elements which are eroding the concept of globalisation. There has been a move towards de-globalisation of late with all countries focusing on their domestic economies which has come in the way of freer trade. This is one reason as to why WTO, which is a larger formal organisation with 164 members, has failed. The challenge is in getting this core team to agree on a formula that can take the world economy back on the path of globalisation. Here we will have to reconcile this goal with our stance of Atmanirbhar India which has had Make in India at its core. USA would have to take a harder look at the concept of ‘Make America Great’ again. In fact of late the ‘Make in America’ doctrine has gained in weight as the government gives direct subsidies to encourage investment.

Such forums are platforms for discussing issues where any single party is not directly affected (like Russia conversing on Ukraine). But the challenge is to get on the same page on the economic front. This is where we need to display our influencing skills to drive home the point. One can hope that there are firm decisions which are taken especially in the areas of investment, health, inclusion, agriculture, and sustainable development. In the light of the recent developments in the banking system in USA, financial stability would be one issue that would occupy the centre stage as it is not just not about institutions that have jolted but also the fallout of the crypto maze which has affected markets.

This would be a turning point as far as we are concerned in influencing global leaders to move towards a stronger economic commitment. While there are other forums which address specific issues, we can be optimistic of being more effective this time given the rapid strides made in several of these fields. Our example can be a template to be followed by others.

Madan Sabnavis is Chief Economist, Bank of Baroda, and author of ‘Lockdown or economic destruction?’ Views are personal

Published on: Saturday, April 01, 2023, 06:00 AM IST