By K R Sudhaman
Prime Minister Narendra Modi is in Buenos Aires in Argentina to attend two-day crucial G20 summit beginning November 30 that will attempt to save the crumbling World trading system and reverse the jobless growth even as global economy recovered from recession after 2008 financial crisis.
Modi will also use this opportunity to have informal BRICS meeting and bilateral meetings with various world leaders. US President Donald Trump would have a trilateral meeting with Japanese Prime Minister Shinzo Abe and Indian Prime Minister Modi. This is significant to promote economic cooperation apart from forming an important axis on international relations. Modi is also scheduled to have bilateral meetings with Chinese President Xi jinping, German Chancellor Angela Merkel and Prime Minister of Netherlands Mark Rutte.
Modi will also engage in an informal Russia-India-China (RIC) meeting on the sidelines of G20 summit. Prime Minister will also meet European Union leaders and bilateral meeting with Argentina leadership
According to Foreign Secretary Vijay Gokhale Modi will discuss important topics including Ayushman Bharat, MUDRA Yojana, Jan Dhan scheme and GST and highlight several challenges including the threat posed by oil price volatility which has directly impacted the Indian economy, and the digital revolution, considering how it can lead to an employment opportunity.
As part of the efforts to promote clean energy Modi will take the lead in roping in more countries in the Indian initiative International solar alliance aimed at promoting solar energy.
One of the focal points of the G20 will be a multilateral meeting on World Trade Organisation (WTO) and the reforms needed in the organisation in a manner that it serves India’s interest. Modi will focus on the need for reformed multilateralism reflecting the contemporary realities so as to effectively strengthen collective action for global good.
US National Security Adviser John Bolton said Trump’s bilateral with Shinzo Abe “will transform at some point during that meeting into a trilateral meeting” with Prime Minister Modi. White House spokesperson Sarah Sanders said Trump’s “participation in the G20 summit is a key opportunity to reiterate his commitment to domestic and global economic growth and prosperity, cement relations with other world leaders and advance a global economic system that is based on fair economic competition and free, fair and reciprocal trade.
The G20 could not have come at a more opportune moment as World’s top 20 nations can sit across the table to resolve global turmoil arising out of US-China trade war that has potential to become full blown.
This meeting is critical for emerging economies like India as it came at a time when the world economic order is threatened despite the fact that the global economic growth is picking up.
Though trade war does not figure in three agenda priorities — job creation, infrastructure development and hunger removal, the trade war is likely to dominate the proceedings as it is a major threat to rule based multilateral trading system as envisaged by the World Trade Organisation.
But the three agenda items too are critical and vital for emerging economies like India as jobless growth and crony capitalism are major issues despite the economy clocking the fastest growth in World this year.
India will also press for the need to stabilize the surging global oil prices and rein-in currency volatility in the face of appreciating dollar due to monetary tightening by the US Federal Reserve
With global trade witnessing sharp decline and estimates suggesting a shave off of $2 trillion in global trade, India, China and other emerging economies are likely to spearhead the efforts to preserve globalization that has helped in taking millions of people out of poverty world over in the last couple of decades.
The 2018 G20 Summit will discuss among other things the future of work (jobs), Infrastructure for development and sustainable food future.
Country like India need at least $ one trillion investment in infrastructure in the next five years and the summit could evolve ways to ensure increased flow of funds for infrastructure development particularly from pension funds and insurance, which are flush with funds and waiting for opportunity to make long-term investments.
With China slowing down its growth as part of its efforts to cool down, It is India which becomes automatic choice for investments in infrastructure. The IMF quota reforms too will occupy the centre stage.
The G20 is composed of 19 countries (Germany, Saudi Arabia, Argentina, Australia, Brazil, Canada, China, South Korea, United States, France, India, Indonesia, Italy, Japan, Mexico, Russia, the United Kingdom, South Africa and Turkey), as well as the European Union. Host, President Mauricio Macri of Argentina will preside over the summit.
As crypto currencies increasingly posed problems to sovereign currencies G 20 is likely to take up the issue of finding ways to regulate this fast growing menace. There cannot be a single regulator like a central bank for sovereign currencies as crypto currencies transcends borders and managed by those who do not believe in sovereign rule of law.
Rajasthan Board of Revenue Chairman, V Srinivas, a senior IAS officer, who has served in the finance ministry and IMF, succinctly explained how G-20 has become an effective multilateral body to deal with emerging issues through formulation of policies in which India had a pivotal role.
“G20’s singular success has been in tactfully tackling recession during the last one decade. But when asked whether it has done enough to tackle jobless growth that followed 2008 crisis, Srinivas, who has done research on the role of G20 in putting global economy back on track after the 2008 financial crisis, said.
But he was candid in admitting this remained a challenge though some efforts have been made. Former Economic Affairs Secretary Shaktikanta Das, who is currently India’s Sherpa to the G20, said it was precisely for this reason jobless growth is a major agenda item at the summit to be held from November 30 to December one.
Crypto currency, seen as a bubble by some, is used at the moment by people who did not believe in any authority. It is a community governed by a protocol for transactions. It is very volatile. The only earning in crypto-currency is capital gain. Bitcoin started with a value of just $400 in 2009 and went up to $20,000 and now it had fallen to $6000. So gains and losses come from its value at a given point of time.
Former RBI deputy governor Usha Thorat, who was in-charge of currency in the central bank, warned crypto-currency has several pitfalls. That’s why many countries like India are wary of it. Crypto-currency has security concerns and money-laundering issues. It can also be used for terror funding, havala transactions, smuggling and other nefarious activities including tax evasion and avoidance.
Crypto currency transcends boundaries and hence there cannot be a single regulator. This meant that regulatory framework has to be re-drawn, she said adding it is one of the major items in the agenda of G20 summit in Argentina this time.
Former G20 sherpa and erstwhile planning commission Deputy Chairman, Montek Singh Ahluwalia is right in saying G20 needed to repeat the performance to save the World trading system as it did ten years ago to save the global financial system after 2008 global crisis. As an antidote to trade war, heads of governments at G 20 should make concerted effort to ensure rule-based multilateral trading system, becomes the pivot of the world economy. (IPA Service)