Funding a new impetus for G20 goals

On December 1, India will assume the presidency of the prestigious G20. Prime Minister Narendra Modi symbolically accepted the presidency from Indonesian President Joko Widodo on November 16 in Bali.

The G20 is amidst a critical phase as global dynamics are cleaved. The political and security agenda is overwhelming the real problems that the world faces. India’s strenuous efforts to maintain its strategic autonomy and adopt positions which are now better accepted as constructive give it a unique position to navigate the troubled waters in Europe, Asia and beyond.

This is an important time for India’s presidency because it is the second in a chain of presidencies of leading countries of the global South. India has taken over from Indonesia, will be followed by Brazil under its new President Lula and then South Africa in 2025. This gives India the opportunity to forge a growing alliance of the global South to set the priorities of G20 without being overwhelmed by big-power rivalry.

Indonesia managed a consensual communique with considerable help from India and some other countries of the South which stood steadfastly together in the final stages. This coalition needs to continue in fuller measure from the beginning of India’s presidency.

Already, India’s goals clearly speak about the global South’s problems and Sustainable Development Goals (SDGs). India’s motto ‘One world, one family, one future’ is what most countries in the South genuinely believe in: the world as one community. The words are echoed by most of the G20 countries, but the developed among them are reluctant to back their statements with actual transfer of resources even if their agenda is adopted.

The failure of climate finance for developing countries is the latest case in point and the disappointment of COP27 as an implementation meeting is stark. The Pandemic Fund of $1.4 billion is a good start.

Undoubtedly, developing countries always seek a just transition with differentiated responsibilities. These ideas are accepted. Their implementation remains weak. Support to a just transition and providing additional and new financing for climate activity is happening on a case-by-case basis rather than an institutionalised response.

What can India do now to deal with this pessimism? The fight for justice is not over and must continue. The developed countries and China must be reminded of their responsibilities which they must fulfil.

At the same time, can the global South simply carry on this fight, knowing that results have not come for decades? Can we deal with this by exerting moral pressure to augment the promises made with real action of our own?

India has done remarkably well in its neighbourhood, with Africa, ASEAN and other developing countries to share its knowledge, experience and financing to achieve the development goals of its partners. Other developing countries have similar programmes. The time is ripe for building a greater coordination among them and refocusing the attention of their own development cooperation programmes to achieving the SDGs. The SDGs to be achieved by 2030 are severely falling behind and many gains were wiped out due to the pandemic, the consequent economic downturn and the Ukraine crisis.

The all-encompassing SDGs are in particular important to the global South and should be the clear aim of what we intend to achieve. To attain these objectives, pursuit of the developed countries to contribute what they promise must continue.

Meanwhile, the global South, led by India, should also set up a new fund which will help other developing countries attain the SDGs. This self-help group of the global South should prioritise the concerns of the developing countries rather than let the developed ones within the G20 set their priorities.

This new fund should be devoid of pressure from G7 and its various proposals or from China and its BRI, though they can be allies, provided the priorities are those of the new fund. The inability of G7 or the EU to get their counter-BRI ideas, like Building Back Better and Global Gateway, started is a problem. The BRI’s design prevents the building of local capacities in their partners and lack of business plans is another problem. The new fund must work with developing countries to make sure that the projects are sustainable, properly planned and executed. These need not be large infrastructure projects but should directly impact the achievement of the SDGs in the developing countries.

The financing of this fund should use the existing examples. The IBSA fund between India, Brazil and South Africa was a small fund set up under the UN Office for South-South Cooperation. The fund assisted the least developed countries with projects based on the experience of the IBSA countries and their financing to achieve ground-level projects which helped people in the partner countries. This was under the UN rules and was a small fund, but the political will of doing it together is the main lesson learned. India, Indonesia, Brazil and South Africa all have their own development cooperation funds. These could have coordination and complementarity so that institutions and entrepreneurs of the global South come together in common endeavour. They can deliver at a lower cost and with a greater impact.

This pooling of resources among the IBSA could invite Indonesia to join and create a fund within the ambit of G20 but managed by IBSA and Indonesia (IIBSA).

Other G20 partners, including the US, the EU, Japan and China, could all contribute to this fund and help it achieve its goals. This is how BRICS tried through the New Development Bank or the Asian Infrastructure Investment Bank (AIIB). They were dominated by China. That is not good by itself, and it drew anxiety from its rivals.

The new IIBSA fund should be able to protect itself from such rivalry or domination. Other members of G20 which are from the global South and beyond maybe invited to join this endeavour; bring them into a partnership. Among the G20 members, besides IIBSA, Argentina, Mexico, Saudi Arabia and Turkey are the possible partners. Outside G20, Singapore, Egypt, Nigeria come to mind. The G7 members, China, Russia, Korea and Australia should be partners but the priorities should be led by IIBSA.

The IIBSA may be a small beginning to start a clear, coordinated self-help group which will fulfil our own priorities. India has good leadership credentials through its past record and future ambitions.