The Prime Minister seeks to make the G20 a catalyst for growth with sustainability for what may be called the G200, the Global South.
NEW DELHI: Six weeks after India took over the rotating Presidency of the G20, the defining contours of what is planned by Prime Minister Narendra Modi to be a transformed multilateral forum are becoming clearer. The G7 has focused on prolonging their post-Bretton Woods primacy over the rest of the international community and accepted an expanded G20 so as to bring major “emerging” economies in sync with their views in policies geared towards achievement of outcomes favoured by the G7. The EU was added as a full member of the G20, so as to help ensure that non-G7 members acquiesce in G7 primacy rather than seek to replace it with a more inclusive approach. Today, G7 economies account for less than a third of global GDP, yet still have three out of five permanent seats on the UNSC, with the continents of South America and Africa wholly unrepresented. As neither China nor Russia are emerging economies, this huge category remains wholly unrepresented in the UNSC Permanent Membership. The world has changed since 1945, but not the structure of the UNSC, which has in consequence become ineffective in practice.
Since the Covid-19 pandemic emerged in 2019 from Wuhan to ravage the whole world within months, nearly 130 million individuals have lost their jobs in the economic meltdown caused by the pandemic. More than a third of the globe is already in recession, with another third on the brink of following them down that painful path. After the dislocation caused by the pandemic came the destructive forces initiated after Russia’s 24 February 2022 invasion of Ukraine and the response of NATO member states to this. Among the side-effects of the Ukraine war has been the jettisoning of promises by the US and the EU to eliminate fossil fuels and transit to green energy. Since the Ukraine war began, that promise has been forgotten even by champions of green energy such as Germany. The momentum of action on the climate crisis has been not just halted by both sides of the North Atlantic but reversed. That has not stopped the G7 from seeking to make much poorer countries such as South Africa switch rapidly from fossil fuels, despite the impact that such a transition would have on their already underperforming economies. Indonesia under President Joko Widodo presided over the G20 in a climate of storms, and handed over the Presidentship of the G20 to India under Prime Minister Narendra Modi on 1 December 2022.
It is in such a time of global societal tumult and economic crisis that Prime Minister Modi finds himself at the helm of the G20 mechanism, a structure that accounts for 81% of global GDP. The Prime Minister of India has flagged the six “T”s essential for a stable global order and progress, each of which is at risk of catastrophic decline as a consequence of events taking place during just the period since Narendra Modi was elected to a second term of office in 2019. These are (a) Expansion of Trade (b) Going by Tenets (values) (c) Elimination of Terrorism (d) Improving Technology (e) Building Trust and (f) Ensuring that the integrity of Territory is respected. Not a small challenge, but one that it is imperative to face up to.
CENTRALITY OF VASUDHAIVA KUTUMBAKAM
From the start, Prime Minister Modi has sought to enshrine the concept of “Vasudhaiva Kutumbakam” (the world is one family). Small wonder that instead of seeking to lead the G20 in a manner that looks only at the interests of its own members, Modi is instead working to make the G20 a catalyst for growth with sustainability for not just the G20 but for what may be called the G200, the Global South. It was in precisely that spirit that PM Modi convened an international virtual consultation within the countries of the Global South just a day prior to India hosting the first major in-person meeting of G20 representatives in Delhi. Countries within the G200 are collapsing under the dollar-denominated debt burden they are carrying, even as Federal Reserve Board Chairman Jerome Powell continues to raise US interest rates and thereby the exchange value of the US dollar. Each such increase means a rise in the external dollar debt burden of almost all the emerging economies. Add to that companies located in emerging markets that have taken dollar-denominated loans for their projects, including BRI loans from China. By now, 103 countries have accumulated external debts that are plainly unsustainable, thereby choking off their access to fresh capital, and plunging their populations further down the road to misery. Estimates are that this additional debt burden on the emerging economies, including dollar-denominated debt owed by them to the PRC, totals USD 6 trillion, an impossible sum for them to meet, especially in a climate of faltering growth. Among the tasks that the Modi-led G20 is expected to put emphasis on is to work towards ensuring that countries which are on the edge of an economic and consequently a societal meltdown are moved away from such a cliff edge.
Unfortunately, there are a few countries that have structural features that make an economic collapse almost impossible to avert, such as Pakistan with its unsustainable outlays on the armed forces. A major obstacle to progress could arise were any particular country to act in the manner Pakistan has in SAARC, which is to be the spoiler of key initiatives begun under India’s presidency. The principle of consensus ought not to be misused as an instrument for paralysis by any G20 member state. Should such a situation arise, the remaining members may need to come forward in a Coalition of the Willing to ensure that the G20 meet the commitments it takes on itself during 2023. The expectation among supporters of the G20 is that no member country, no matter what its differences with other members, would play such an obstructive role. In such a context, close cooperation between the G7 and the G20 is essential, and it is fortunate that this year’s G7 Presidency is held by Japan, a steadfast friend of India, which will assist in securing a better relationship with the G7 while formulating an agenda more expansive than that of the smaller grouping. The next year’s G20 President is Brazil, another friend of India, followed by South Africa, yet another country that is close to India and part of the Global South, as is Indonesia, the immediate past President of the G20. In PM Modi’s vision, policy needs to be not Bloc-centric but Human-centric in the horizontal world order that is a better construct than a vertical world order of superior and inferior categories of countries.
INDIA’S KEY 2023 GOALS
A key goal of the G20 in the period that India heads the association would be to ensure that the benefits of access to the digital world that have been accomplished in India get mainstreamed across the emerging economies. As of now, less than half the total population of the globe has access to digital services. In contrast, over the past six years, India has witnessed a record expansion in the number of citizens with such access, with the figure expected to cross a billion citizens well before the close of the current decade. Financial inclusion is key to progress, and while India has set an international record in this since the pandemic began, in the rest of the Global South, as many as 1.78 billion people do not yet have access to the internet. Digital justice needs to be a key component of global policy. Another goal of the G20 during 2023 would be to ensure women’s representation, participation and justice in a world where half the total population for reason of gender have a much lower level of participation in the benefits of progress than men do. This is taking place despite the fact that higher literacy for women results in better nutrition for children and better healthcare and education in a world where the digital space expands every second. Prime Minister Modi seeks to bring into focus the experience of India since 2014 in such matters, with the implicit message that if India could do it, so should every other country be capable of the same. Working out ways of achieving such a dissemination of the India experience and taking a relook at how global institutions work is the responsibility of the Task Forces that have been set up under the G20 format, the first meeting of which took place on 13 and 14 January at New Delhi. In a nod to Public-Private partnership, the Observer Research Foundation (ORF) was tasked with organising the conference rather than a government body. The deliberations saw the participation of experts from major think tanks and universities from India and other G20 members.
A possibility suggested by some experts is to broaden the base of the G20. A suggestion has been made that an expanded G20 should include representative groupings from South America, Africa and Asia, following the precedent set when the EU was admitted as a full member of the G20. Taking in the African Union, ASEAN and perhaps UNASUR would broad-base the process of comprehensive consultation and discussion within the G20, thereby making the group better able to act as a catalyst for global growth and equity. Given the importance given by Prime Minister Modi towards sustainable development, sustainability will be a major focus of the G20 during India’s Presidential year. Being of the Global South, India is cognizant of the need to ensure that the sacrifices expected of countries in order to move towards a Net Zero Emission future needs to be predicated on the level of pain that each can endure. Asking a country where many are on the verge of starvation to make the same sacrifice in terms of growth opportunities lost as a country where the population throws away as waste more food than they consume would be a travesty of justice in a world where every man and woman is deemed to be born equal, no matter where the birth takes place. Equity is at the heart of Prime Minister Modi’s philosophy of governance. However, it needs to be added that as a consequence of a policy change brought about by Prime Minister Modi in 2015, India is committed to running the extra mile in order to ensure a sustainable future for the planet. In contrast, the G7 countries have yet to contribute even a tenth of the funds they had promised a decade ago to poorer countries. Given the rising expenditure on weapons to Ukraine of several affluent countries, it will prove a difficult task to get them to make good on such unkept promises. India contributes less than 1.6% of total global emissions, yet despite that, Modi from the start of his term sought to place India at the frontline of the battle for a cleaner planet, and the impact of this is already evident across the country. India is likely to reach the Net Zero Emission stage well before the promised date of 2070. The petroleum industry, to take an example, is expected to reach the Net Zero level well before 2050. It is anticipated that such an example by the world’s largest emerging economy may get replicated, including by other emerging economies, with a revamped G20 mechanism assisting in such a quest.
G20 AS CATALYST FOR WORLD GROWTH
Making G20 a catalyst for the entire world rather than simply for its 19 members would be assisted by a transformation in several global institutions that face a crisis of credibility and confidence, given their imperviousness to change. The UNSC in particular has become a disaster zone, while the WHO failed to ensure that the incidence of Covid-19 in China not become a pandemic wreaking havoc across the globe. The ILO has failed to improve the living conditions of workers in the emerging economies, while the WTO remains unable to prevent the PRC in particular from selectively blocking access to its market by using different stratagems. As for the World Bank and the IMF, they have always been and remain a rich nations’ club that works to open up opportunities for profit for rich countries in the Global South. The Bretton Woods architecture has become so dysfunctional that it resembles an arterial blockage to the heart of the global economy. As hopes for reform are fading, more and more voices are calling for the replacement of these dinosaurs so as to unclog commerce and create opportunities for growth in the Global South. India, however, has not given up hope and effort for reform of multilateral institutions, a key objective of the Indian presidency. In a happy coincidence, Indonesia, India and Brazil form the G20 Troika in 2023, and Prime Minister Modi is certain to hold several substantive discussions with his friend, Indonesian President Joko Widodo, and with an old friend of India, President Luiz Inacio Lula de Silva of Brazil.
Although a champion of the Global South, from the start of his term as PM, he has ensured that India be a friend and partner of the countries within the G7. India under Modi is working towards setting a course designed to make the G20 an effective instrument of global transformation, especially for countries that have thus far suffered neglect. What has been achieved in India, including in the matter of access to digital services, inclusion of women in the financial architecture or the supply of essential drugs and vaccines can be achieved in other emerging economies as well. Working within the G20 mechanism, Prime Minister Narendra Modi is determined to ignite such a change.