By Ashok B Sharma
The world is grappling to resolve a host of problems. Compounding the issues are new problems to be created by disruptive technologies. Though technological advancement is certain, its impact, particularly on job creation and employment, is yet to be assessed. Disruptive technologies like crypto-currencies, blockchains, e-commerce, internet of things (IoT), machine2machine learning, 3D printing, artificial intelligence and robotics and the use of these disruptive technologies in drone surveillance hold out great scope for economic development. But a note of caution for the use of technologies like crypto-currencies, block-chains and e-commerce: there is need to regulate its operation through appropriate global and national laws so that tax evasions do not take place and no black money is created. G 20 had earlier resolved to tackle the menace of black money, tax havens, imaginative accounting, transfer pricing and the like. Though a humble beginning was made there are miles to go.
The much-touted reforms in global financial and monetary system is yet to reach its ultimate shape. In Germany G20 members resolved that efforts will be made to complete quota reforms at the IMF by 2019. Can the world drive a grand bargain between emerging and developed economies on fashioning more representative, effective and legitimate global institutions? After the global financial crisis in 2008, consensus emerged on the need for a better regulatory structure to deal with risks stemming from financial fragility. The Financial Stability Board under the auspices of G20 was set up and it has made a number of recommendations to member countries to combat systemic risks and to strengthen the global financial system. Though a number of regulatory reforms like Basel III, over-the-counter (OTC) derivatives market, changes affecting the regulatory and accounting framework for institutional investors, policy measures for globally systemically important financial institutions (G-SIFIs) are being implemented, the progress have been tardy.
US Federal Reserve Policy causes currency fluctuations across the globe. Its spill over affects US economy too. In this situation can we have an independent global reserve currency in lieu of US dollars? Can we make SDRs tradable in this situation? There is also the problem of currency manipulation by central banks of some countries. Can we have at least two zones for financial architecture – Asian Financial Architecture and European Financial Architecture? Fluctuation in global crude oil market is another issue. So also is impact of US sanctions against Iran. How should the payment be made to Iran? These are some of the nagging issues before the world leaders.
The multilateral trading system is at stake with no forward movement in WTO negotiations, with developed countries resorting to protectionist measures. US has imposed high tariffs on steel and aluminium imports and is planning to do the same for auto-parts imports. It has sorted out the issue with South Korea, Canada and Mexico, but its trade war with China still continues with the latter retaliating with similar measures. The Trump Administration has vetoed appoints to the Dispute Settlement Body of the WTO and DSB is thus facing an existential threat. The multilateral trading body is yet to resolve issues of data security, IPRs and e-commerce.
Keeping in view the challenges before the world leaders, the 13th Annual G20 Summit to be held in Buenos Aires in Argentina beginning on November 30 has stressed upon building consensus for fair and sustainable development. In June 2018, the national ministers of G20 countries released a ‘consensus statement’ on energy transitions that seek greater transparency and fair and sustainable development. Thus, there are wide range of topics to be discussed and a number of issues to be addressed.
The Argentina Presidency believes that the world has changed very fast this year, and we need to address these changes through consensus. It has stressed the importance of coordinated work between the two tracks – sherpas and finance ministers who were present at all run-up meeting to the Suimmit. Argentina bases its vision for the future on the basis of agreement reached between leaders of G20 in Hamburg in 2017 to promote greater inclusiveness, fairness and equality in pursuit of economic growth and job creation.
Japan which is to host the G20 in Osaka in June 28-29, 2019 has also come out with its vision and theme for the next summit. “During its presidency of next year’s G20 Summit, the Japanese government is determined to carry out the strong leadership in advancing discussions towards resolving the myriad issues now facing the international community.” With a view to showcasing, a newly revitalised and transforming Japan sectoral meetings are planned in eight other cities run-up to the Summit. Saudi Arabia is slated to host G20 in 2020.
Argentina Presidency has divided the Summit into three sessions. The first is ‘Putting People First’ which is essentially on the global economy, on the economic outlook or the future of work. The second session is on ‘Building Consensus’, a topic of importance at this time certainly, and this will deal with international trade, finance, taxation, sustainable development and climate change. And the third session is called ‘Embracing Opportunities’ and these are related to energy, infrastructure, sustainable food security and the like. Basically G20 will be working on future of work (jobs), infrastructure for development and sustainable food future. Argentina has chosen as one of the priorities the future of work, as a concept intertwined with the future of education. It is based on the declaration adopted in Mendoza Meeting of Labour and Employment in August 2018. There is also a permanent agenda of items inherited from the previous G20 Summits. They are empowering women, fight against corruption, strengthening of financial governance, strong and sustainable financial system, cooperation in trade and investment, climate action (2030 Agenda), energy transitions. However, the Argentina Presidency has said despite a host of topics discussed in two days, it would come out with only a 3-page Communiqué.
It is likely that Prime Minister Modi, who is slated to speak on the first day on the Session “Putting the People First” would steal the show by introducing the concept of ‘disaster resilient infrastructure’. Each time a natural disaster occurs anywhere in the world, countries scramble to give immediate relief but don’t really rebuild the infrastructure back to a state where it is resilient next time a disaster occurs. There are, of course, United Nations agencies who are doing this work but Modi feels that there is space for major countries, particularly the G20, to have some kind of an informal arrangement where we can share capacity building, technical know-how and experiences immediately after a country faces a disaster which leads to significant infrastructure erosion or development and where the immediate relief has been provided subsequently. A concept paper has already been circulated to G20 leaders.
In the context of commitments to the Paris Agreement and climate change, Modi will highlight the International Solar Alliance and his own vision of One World One Sun One Grid. At the General Assembly meeting in October, the ISA agreed that it would be expanded to include all countries not just those who are between the tropics of Cancer and Capricorn. So certainly at the G20 Prime Minister Modi will make the pitch for other countrie to join the Alliance. (IPA Service)
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