By K R Sudhaman
India takes over presidency of G-20 at a critical juncture when geo politics is at cross roads and global economy difficult and sagging. This is significant as it takes over leadership at a time when there is need to strengthen multilateralism and that India is ideally suited because of it being among the few countries that are fit to play the balancing act to this increasingly multi-polar world. India is deeply committed to multilateralism and democracy and G-20 presidency would be very significant for India’s history.
India, world’s largest democracy takes over the presidency on December 1, 2022, from Italy when serious attempts are being made to de-globalise the world. India is best suited to work towards putting back on rails the global economy on the path of globalisation, necessary to deal with widening poverty, joblessness, inflation and dwindling global trade and investments. Trade is the only engine of growth and this can be widened only through promoting rule-based trading with lower tariffs and fair play.
“This could be pushed hard only if multilateralism and globalisation are strengthened. India’s inclusive governance model with emphasis on multilateralism promises one of the finest years for G-20 leadership where multilateralism can flourish and G-20 can make a serious contribution to making globalisation fairer, sustainable while transforming the processes of international negotiations,” a top IAS official and government of India secretary, V Srinivas has said.
G-20 is an important and a leading world forum as it represents 90 per cent of global GDP and 80 per cent of global trade and two-thirds of world population. G-20 was born out of a meeting of G 7 finance ministers and central bank governors, who saw the need for a more inclusive body with broader representation in addressing the world’s financial challenges.
In all fairness one could argue the G20 has been at the forefront in battling financial crisis, be it 2008-09 global financial crisis, Eurozone crisis in 2010 and Covid-19 pandemic. All these crises have had a devastating effect on global economy and trade. India takes over from the Indonesian presidency in 2022 which focussed on recover together, recover stronger after Covid. Italy had the presidency in 2021, which focussed on people, planet and prosperity when world was reeling under Covid. India’s presidency
The G20 Indian Presidency would be one of the most significant milestone moments of Indian democracy. It is widely felt that in times when there is a crisis of multilateralism, India has the responsibility for bringing stability to a deeply divided multipolar world and crafting broader global responses to the challenges. The theme of the Indian Presidency would be announced in December 2022. Basically the presidency is for 2023.
G-20 comprise India, United States, China, Russia, United Kingdom, France, Germany, Japan, Indonesia, Italy, Brazil, Mexico, Argentina, Canada, Saudi Arabia, South Africa, Austraila, South Korea, Turkey and European Union. At the juncture when there is increasing protectionism and hence need for strengthening and reforming multilateral institutions, which in G20 works through a number of international organisation including United Nations, IMF, World Bank, OECD WTO ILO, FSB and BIS. De-globalisation has got a push lately particularly after the Ukraine-Russia war, and the Sino-US standoff aggravated by China’s posturing on Taiwan. All these factors along with lockdown resorted to in various countries after the Covid outbreak has provided ample evidence of slowdown in the globalisation efforts, which is not good for the World economy already hit by jobless growth and very high inflation.
The agenda for the Indian Presidency can be drawn from the communiques of the Riyadh, Rome and forthcoming Jakarta summits. The IMF has said that the following Instruments of financing remain relevant as debt challenges are pressing and the need for action continues to exist. The DSSI (Debt service suspension initiative) of World Bank and CCRT (Catastrophe containment relief trust) of IMF have lapsed end 2021, and G20 is yet to reach a consensus on their continuation. The DSSI and the Common Framework are important instruments for debt relief, and efforts should be made to continue to operationalize them.
The Catastrophe Containment Relief Trust grants for debt service relief to be strengthened through a coordination approach for fund raising. However, the Trust has scarce resources after the sanctions of the 5th tranche and creditors are reluctant to extend the timelines. The Resilience and Sustainability Trust has commenced operations from May 1, 2022 needs to be continued as an important source of financing for middle income countries under debt stress.
Srinivas said from India’s perspective the focus would be on IMF Quota and Governance as also that of other IFI’s.
Further the issues of climate financing, digital assets and capital flows are likely to continue to feature in the G20 agenda. There also exists an extraordinarily challenging macroeconomic environment. Nearly 60 percent of the Low-Income Countries are facing an unbearable debt burden. It is likely that the G20 will come together to establish new rules and timelines for the common framework. Further the G20 must continue to fight the crisis of climate change and send clear signals to decarbonize the economy. Lastly G20 must do everything in its power to keep inflation in range, to protect the living standards for vulnerable people.
The External Affairs Minister S Jaishankar has said that “for the first time in the history of G20, India will host the G20 meetings over the year, not only in Delhi but in every State and Union Territory.” Former RBI Governor Raghuram Rajan is if the view that when India gets Presidency of G 20, it should formulate India based agenda and push the global trade towards fair practices
India’s strength lay in services, particularly IT and IT enabled services. Manufacturing at best could increase to 20 per cent of GDP, while services accounted from 60-70 per cent of GDP. So the effort should be push trade in services particularly movement of personnel to cash-in to help the huge youth population when the size of youth is shrinking elsewhere in the world. As part of the efforts to strengthen globalisation, G-20 presidency provided an opportunity to promote this area as well apart from other areas of concern.(IPA Service)
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