Osaka: Prime Minister Narendra Modi played a key role in the G20 meeting of 19 leading economic nations and the European Union, as well as representatives of a number of regional country groupings, including the African Union and international agencies, that took place in Osaka, Japan, on Friday and Saturday. Prime Minister Narendra Modi went through a rigorous schedule and represented India at the multilateral and plurilateral events, and bilateral meetings with other world leaders with the host, Japan’s Prime Minister Shinzo Abe, US President Donald Trump, and Chinese President Xi, among others. Parliamentarian Suresh Prabhu served as PM Modi’s “Sherpa” for the event, and External Affairs Minister S. Jaishankar and NSA Ajit Doval assisted the Prime Minister.
Overall priorities for India at the G20, as enunciated by PM Modi, included women’s empowerment, digitisation, artificial intelligence, UN’s sustainable development goals, tackling terrorism and climate change. With the US, Modi mentioned trade, defence, bilateral relations, Iran, and 5G. With BRICS, Modi additionally mentioned reformed multilateralism, energy security, disaster resilient infrastructure, and ease of movement of skilled workers. By strongly speaking out against terrorism, PM Modi was urging China, Russia and other backers of Pakistan to review how their actions were inadvertently contributing to Indian casualties.
JAI (Japan, America, India) (JAI means victory in Hindi); BRICS (Brazil, Russia, India, China, South Africa); RIC (Russia, India, China); were plurilateral meetings in which PM Modi participated. With G20 meeting Chair Japan’s PM Abe, the issue of data localisation that is an area that India has raised as integral to national development was discussed. India’s insistence on data being stored in local servers to ensure that data is correlated with national economic growth, may be at odds with the “Data Free Flow with Trust” concept being advocated by Japan. More bilateral discussions are anticipated on these. India also did not sign the “Osaka Declaration on Digital Economy”. India is proclaiming that data is the new wealth-creator, and it is apparent that value has certainly gravitated to the data kings, especially in Silicon Valley. Japan has promoted its Society 5.0 vision of human-centered development, encompassing economic growth and the solving of social challenges with application of IT and smart systems with energy efficiency. Japan-India collaboration portends great opportunities for the global market, but much larger Japanese companies tend to see smaller entities within Japan and indeed in other countries as sub-contractors rather than true partners, and, therefore, a change would be necessary to work together more effectively, globally.
Trade tensions between the US and China are omnipresent at every multilateral gathering. The US trade deficit with other countries like Japan and India also has become a talking point. India is likely to import natural gas and defence equipment from the US as a means of neutralising the rising trade deficit that US runs with India, that is increasingly causing discomfort in the Trump administration. The US has become among the largest producers and exporters of natural gas. Also, the US, India and Japan with Australia are cooperating in a Quad of countries to keep the Indo-Pacific “free and open”.
Ageing and associated Universal Health Coverage are G20 priorities, especially for the Japanese Presidency 2019. Countries like Japan and Canada have largely single-payer government health systems, along with some co-payments from all residents who are covered and sometimes topped up with private insurance. But those coverages are for much smaller populations than India’s and China’s. Countries have been grappling with ensuring “health for all” since the World Health Organization’s Alma Ata declaration in 1978 that it would accomplish that goal by the year 2000. When that did not happen, WHO officials deftly changed the slogan to health for all in the 21st century, thereby giving themselves an additional 100 years to achieve the same goal. Universal Health Coverage (UHC) is the current terminology for the old “health for all.” Unlike in the past century when it appeared that “rich countries” would build the means to achieve the objective, today, with rising populism and economic uncertainty in the industrial nations, it is certainly unclear who would foot the bill. Further, the debt to GDP ratio of Japan, a key champion, stands at about 250% of GDP.
Health Minister Dr Harsh Vardhan presented the Ayushman Bharat-National Health Protection Scheme at the joint meeting of Finance and Health Ministers that was held for the first time at Osaka to move forward Universal Health Coverage (UHC). The scheme is to cover one hundred million poor and vulnerable families and expected to help 500 million beneficiaries, providing coverage up to Rs 5 lakh or $7,100 per family per year for secondary and tertiary care hospitalisation. Technically, it does include both preventive and curative components, but overall, the lack of attention to preventive and promotive health in India through new health practice models is an example of the insufficient reform. Meanwhile, instead, in India, attempts to mix up the different systems of modern and indigenous systems using legislative means only raises the ire of the medical profession. These decisions are best left to patients and their families to decide which system and what combination of systems might be best for each individual. Legally, India offers a unique opportunity for patients to utilise modern and ancient systems of complementary medicine, especially for chronic diseases control/management. Modern medical system doctors and nurses have deep roots in the community and often enjoy profound respect for their sacrifices in terms of time they give and the cases they help (despite some recent problems with irate relatives of deceased patients who resorted to violence in some states). The relative lack of infrastructure in medical institutions across India has meant that much greater resources would have to be committed to various schemes the government has announced. Meanwhile, also, health/medical systems have large private sector components as well across the world. The changing pattern of economic might has certainly altered the perceptions of what the leading economies of the G20 can do for their own populations in vastly differing circumstances, and indeed for other countries.
On the environment, the matter of single-use plastic waste, especially marine plastic waste, has triggered global concern with calls for bans and instead for recycling. At the conference of G20 Energy and Environment Ministers at Karuizawa on 15-16 June, India highlighted a project/technology functioning since 2001 that is currently processing 500 to 700 metric tonnes per month of PET bottles that are then recycled into polyester fibres and filaments. Similarly, many indigenous innovations and technologies have been developed cost-effectively within India. This G20 was a great opportunity to make the point that India has been working on reuse and recycling since 2001. What has been lacking in India is capital to bring it to scale, especially in view of India’s size.
In terms of defence, since US Secretary of State Mike Pompeo had already discussed matters in New Delhi the day before, the Russian S-400 issue did not feature in the Trump-Modi summit discussions with the US in Osaka. Unlike other US-India issues, the American insistence that India not purchase the Russian S-400 anti-missile system is not merely a trade issue, but also because having the S-400 in India would enable data related to US high-tech aircraft such as the F-35 stealth fighter jet to be relayed to Russia, since sensitive data would be picked up by the Russian anti-missile IT systems. This is why the US would refuse to make high-technology defence deals with India, since it would reveal highly classified information to Russia that was a historically hostile power to the US, but a treaty partner of India’s. Thus, India, that is on the threshold of being classified by the US as a non-NATO ally on par with Japan and Korea, by means of legislation sponsored by both co-Chairs of the US Senate India Caucus, Senators John Cornyn and Mark Warner, would once again lose out on potential deals with great commercial value, in local manufacturing upgradation for export. These issues have reached additional significance because instead of the Russia-China border conflicts of the 1960s, today there is close cooperation, including a good personal relationship between Presidents Putin and Xi. This would also mean that both China and Russia as Permanent Members of the UN Security Council could veto resolutions that might impact their own allied states. A truly multi-polar world is emerging, and the G20 is at the centre of it.
In the run-up to the G20 Summit, there were also a range of ministerial-level meetings in various cities of Japan. In Fukuoka, Finance Ministers and Central Bank Governors met on 8 June. There was a side-event held with OECD on corporate governance reform, one of the issues of importance to the G20 that was founded amidst financial crises.
The G20 as a complement to the older G7 originated when Paul Martin, former Finance Minister of Canada who later became Prime Minister, was convinced how anomalous the G7 had become even in the early 1990s—with China and India growing rapidly in demographic and economic strength, and with Canada only having the population of Kerala, despite having a huge nearly 10 million square kilometer landmass (the far North is uninhabitable), Martin felt that the G7 hardly represented the world’s leading economic powers anymore. He, therefore, suggested, as early as 1994 during one of the periodic financial crises that hit Mexico, that there ought to be a broader grouping of countries set up in parallel. It did not find support from the G7 Finance Ministers then. Later, after the Asian financial crisis of 1997, Martin spoke to Larry Summers, his US counterpart in the last phase of the Bill Clinton administration. Summers had previously been the Chief Economist of the World Bank and instinctively knew that Martin was right and wholeheartedly agreed.
Therefore, the G20 at Finance Ministers level took shape with Gordon Brown, their UK equivalent, also backing the move. When Paul Martin became Canada’s Prime Minister, he lobbied then US President George W. Bush to elevate the grouping to level of heads of government. Bush initially dithered, unsure if such a grouping was needed and whether it might dilute the value of the G7 (which it undoubtedly has), but when the 2008 global financial crisis hit, Bush agreed to have the G20 elevated to heads of government level, which he himself hosted in Washington, D.C. in November 2008. Since then, this is the fourteenth Summit meeting, and in the initial years, two meetings per year were held given the gravity of the crisis, the largest since the Great Depression of the 1930s. The G20 represents about 85% of the world’s economy i.e. $63 trillion, 75% of the world’s exports and two-thirds of the world’s population.
There was the announcement by Japanese and Indian investors to coincide with the G20 meeting about a fund being created to support entrepreneurship. $150 million (80%) is being raised from Japan, $37 million (20%) from India, bringing the total fund size to $187 million. Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML), fintech, healthcare, consumer, education, robotics, automation, and B2B software are areas of potential investment. Mizuho Bank, Suzuki, Development Bank of Japan and Nippon Life are among the planned investors. India is a private capital driven country, and investment is needed to support India’s teeming millions of educated unemployed who would necessarily depend on ventures for their livelihood. This foreign investment, just announced to coincide with the Osaka G20, needs to be a success case so that it will pull much larger global investment funds available from such countries with culture of investment capital like US, Saudi Arabia, UAE and Japan. PM Modi, with strategic intent, also met with the Saudi Crown Prince Mohammad bin Salman, German Chancellor Angela Merkel, Indonesian President Joko Widodo and others on the sidelines of the G20.
In multilateral fora, environmental issues have become contentious. Amidst the boom in natural gas in the US, and the US withdrawal from the Paris Accord, Europeans are adamant to press the environmental/climate change issue.
Despite many issues being carried over to the future G20 meetings, at his toast to the delegates, PM Abe sought to find a middle ground and spoke about the Japanese concept of living in harmony with Nature, Satoyama, and emphasised that this theme was ingrained in the cuisine being served for dinner—a Japanese metaphor. Later, after all-night haggling, a Leaders’ Declaration was finally adopted with text language acceptable to all. On the one hand, it reaffirmed the non-US countries’ commitment to the Paris Accord, while at the same time stating that the US is a world leader in reducing emissions through the development and deployment of innovative energy technologies for a cleaner environment.
Japan’s Presidency of the G20 showed the significant presence of the PM Abe administration on the global stage, because he has been a stable head of government for many years. He is visiting India later this year for the annual India-Japan Prime Ministerial Summit, when the world’s economic centre of gravity is rapidly shifting to Asia. By the time India, ten times larger in population and landmass than Japan, already with significant weight on global diplomacy with the world’s third-largest economy in purchasing power parity terms, hosts the G20 in 2022, India can set the course demonstrating multiple success stories in investment, growth, digital health, knowledge, innovation and development.
Dr Sunil Chacko holds degrees in Medicine (Kerala University), public health (Harvard) and an MBA (Columbia). He delivered babies even in candle-light in an early version of universal health coverage, then as a young physician. He served in the Executive Office of the World Bank Group, is an Adjunct Professor and currently works on digital health.