Ready for G20 Summit

Sandeep Dikshit

The eighteenth G20 Summit in Delhi will probably rank as the grandest, next only to the annual assemblage at the high-level segment of the United Nations.

Power Balance

8 Belong to the EU plus G7 bloc — Canada, France, Germany, Italy, Japan, the UK and the US.

6 Partially independent foreign policy — South Korea, Turkey, Mexico, Argentina, Saudi Arabia & Australia.

6 Independent foreign policy: Indonesia plus BRICS (Brazil, Russia, India, China & South Africa).

The near-airlock over Delhi’s skies from September 7 when jets carrying the mightiest leaders of the world, bar Vladimir Putin and Xi Jinping, start touching down, will reaffirm India’s cruciality in global politics. China’s despatch of a second-rank leader to a global pageant in a neighbouring nation would also clearly indicate which side the chips are falling in the race for the second-ranking geopolitical power in the world.

Assuming the G20 presidency is a huge opportunity for India and the country must utilise it by focusing on global good.

Narendra Modi, PM

The concept of a summit where the world’s top leaders would deliberate on economic issues came into being in 2009. The cycle of summits will be completed in 2026 when the Chair will be handed over to its first-ever host, the US.

As simple arithmetic would show, if G20 has 20 members, the US’ turn to re-host the summit should have come in 2029, and not three years earlier in 2026. This mismatch shows the journey of G20. It arose from a gathering of Finance Ministers as a collective response to the Asian economic crisis of 1998, which is why the Finance Track is the most prominent in its deliberations.

Economic successes

• 2009 UK: Most dramatic reform of global finance in over 60 years by tackling tax evasion and avoidance.
• 2011 France: Setting up Agricultural Market Information System (AMIS); reform of World Bank, IMF.
• 2013 Russia: Action Plan on Base Erosion and Profit Shifting (BEPS) now followed by 115 countries.
• 2016 China: Including digital economy on G20 agenda for the first time.
• 2020 Saudi Arabia: Debt relief of over $5 billion to more than 45 countries.
• 2021 Italy: Agreement on two-pillar solution to address tax challenges, the most significant recent global tax reform.

The G20 adopted the concept of summits at the leaders’ level in 2009. In the first two years, the summits were held twice a year in response to the greatest recession that had hit the post-World War world from 2007-09. One member that does not hold a summit is the EU, the only institutional member.

Once the global economy had largely stabilised, it did not take long for politics to rear up in G20. The power balance in the G20 in favour of the western alliance made it too tempting a target and, in 2014, host Canberra wanted to ban Russia from the summit over its annexation of Crimea. It was the BRICS that told the Australians that “the custodianship of the G20 belongs to all member states equally and no one member state can unilaterally determine its nature and character”.

G20 Premier Track

The most important is the Finance Track. It is here that most progress has been made. The Finance Ministers meet four times a year. They were the originators of G20 when they met in Berlin in wake of the 1998-99 global financial crisis.

A further element of politics, in what was purely a unique global economic policy formulation think tank, was injected when the Foreign Ministers’ meeting was made an integral part of G20 at the summit in Germany only in 2017, but now hogs the limelight at the expense of the far-more result-oriented conclaves of Finance Ministers and Central Bank Governors. Even the hosting of the summit has been mostly taken over by the diplomats with their political axes to grind.

Sherpas set the tone

The agenda for a country’s presidency is set by the Sherpas. The first under India’s Chair was held in Udaipur in December and the last one that will shape the summit’s agenda is scheduled from September 4 to 7 in Nuh, Haryana. At Udaipur, the Sherpas resolved to hear the “unheard voices” of the Global South, 3Fs (Food, Fuel, and Fertiliser).

The 2022 Bali summit was witness to the spectacle of non-member Ukraine’s President Volodymyr Zelenskyy, in a special video address, referring to the gathering as ‘G19’, which indicated his viewpoint that Russia should be removed from G20. For an organisation that appears to take decisions by complete unanimity, the invitation to a leader who was sure to focus on dissing Russia, a G20 member, on purely political grounds has since gone unexplained.

The problem has now got acutely intertwined in India’s presidency. The West’s successful enforced abstention of Putin is one manifestation and now US President Joe Biden and Canadian PM Justin Trudeau are pressing for Russia’s exclusion from the G20, a possibility that would further alter the power balance towards the West.

The other is the insertion of references to the Ukraine war in the joint communique that is issued at the end of deliberations. In an organisation where all decisions are taken only when all 20 members agree, Russia and China have blocked any such reference in a Joint Declaration. The result is that instead of a high-sounding ‘New Delhi Declaration’ at the end of the summit, the summit will have to settle for the more prosaic ‘Chair’s Summary’.

G20 has earlier successfully battled challenges to its legitimacy. Its self-anointed claim as “the premier forum for international economic co-operation” has been challenged in the past by Norway, Singapore and Poland. The current PM of Norway, Jonas Gahr Store, had called the G20 a “self-appointed group” whose composition is arbitrary. Poland is upset that it is not in the G20 despite its claims of being the world’s 18th largest economy. There are even suggestions that Poland should swap with Argentina, which has slid down the economic ladder. And Singapore felt that all prominent non-G20 members should be included in financial reform discussions. Today, all the countries feel involved thanks to the generous invites sent to guest countries. These contrarian views about G20 from the richer parts of the world are history.

The second challenge to G20’s legitimacy was the underrepresentation of African countries. This absence was more acutely felt after the Saudi presidency in 2020 convened an ‘Extraordinary Virtual G20 Leaders’ Summit’ at the suggestion of PM Narendra Modi and endorsed the Debt Service Suspension Initiative for debt-ridden countries, a majority in Africa. This has been overcome with India’s presidency endorsing the inclusion of the African Union as a G20 member.

The third challenge that is posing questions about G20 as a premier multilateral economic organisation is the slow but brutal grind of the Ukraine-Russia war. Many nations feel the insistence of the West on cornering Russia at G20 to suit its larger political interest of bringing Moscow to its knees is just a short step to the intrusion of human rights at some point.

With the power balance heavily favouring the West and with some arm-twisting, the G20 could be in danger of becoming yet another forum like the UNSC for point-scoring on big-power disputes. Unless a convincing explanation does not come, Xi’s absence from the Delhi Summit, whatever be the bilateral differences, would also contribute to the emasculation of G20. Historically, G20 has been generous, innovative and a problem solver in the economic arena when the intrusion of politics is minimised.

#Canada #France #Germany #Japan