Friday 27 / December / 2024
New Delhi: India's presidency of the G-20 raises the hope for consensus building on global issues due to its sovereign and principled foreign policy aiming at cooperation for sustainable and inclusive development.
Notwithstanding turbulent times amid shaky post Covid global economic recovery and negative spillovers of Russia-Ukraine war, US-China differences on trade and geopolitical issues and challenges thrown up by climate change, India has been able to muster backing from G-20 countries on many of its proposals.
India assumed the year-long presidency of the G-20 in December 2022. After participating in the discussions at the second meeting of G-20 finance ministers and central bank governors at Washington on the sidelines of the annual spring meetings of the International Monetary Fund (IMF) and World Bank, Union Finance Minister of India Nirmala Sitharaman expressed satisfaction that a consensus is evolving in the forum on many crucial issues.
The G-20 Washington discussions, spread over three sessions during April 12-13, covered issues ranging from the global economy and international financial architecture to debt restructuring and sustainable finance, financial inclusion, international taxation and crypto assets.
The participation of around 350 delegates from G-20 countries and 13 inviting countries and various international and regional organizations is an evidence of the confidence that India enjoys in the G-20 and global institutions. In fact one of the reasons for hope in India is its impeccable democratic credentials and market friendly economic reforms which have made India a "bright spot" even while the global economy is on a slippery path.
India's special image of being a vibrant democracy, a growing market and a country having a mammoth young and skilled manpower has made it a favorable and fascinating destination for an alternative global value and supply chain hub with which all the G-20 countries appear to be interested in a higher level of cooperation for win-win economic outcomes. Its pacifist accommodative and cooperative approach to solve the global problems is another reason that India as G-20 president has been successful in engaging the members to find consensual solutions.
The Indian Finance Minister underscored five takeaways from the series of Washington meetings of G-20 finance ministers. First, India succeeded in leading an engaging and substantive discussion on debt restructuring and debt vulnerabilities under the Global Sovereign Debt Roundtable among G-20 finance ministers. This issue is very important for independent developing countries and their economic revival.
The second issue that drew very favorable attention of G-20 delegates was the issue of reforming multilateral development banks. The call for reforming the global financial architecture according to the current realities and roles of emerging and developing countries has been an India-led initiative. The Finance Minister said after the discussions,
“The acceptance of an expert group where we have two co-convenors, strengthening the multilateral development banks' issue has received a lot of warmth.”She also added, “This expert group is going about its work and hopefully, by July, we should have something on the table for the members to discuss.”
The third success of Indian presidency is with regard to building a consensus on the need for a policy framework to address the challenge of the climatic change with public and private finance. There took place a meaningful discussion on sustainable climate finance. India's Finance Minister expressed satisfaction that the discussion on climate finance is moving in a very positive direction.
“Bringing in private finance and ensuring Sustainable Development Goals (SDGs) are also met up.” The Washington discussion revolved not only around the current flows but also the quantum of finance required for meeting current climatic challenges and transitional costs and technology required to realize the SDGs in immediate term.
The fourth issue which has got prominence in G-20 discussions under India’s presidency is digital public infrastructure (DPI) which reverberated from Bengaluru to Washington meets. India has successfully generated interest and led G-20 members to deliberate on the use of DPI to ensure global financial inclusion. It is need of the hour to use digital technology for cross-border global payments in the times when cross-border movements are increasing due to focus on people-to-people relations and cross-border tourism, business and education related cooperation. She appreciated Singapore to have such an agreement with India. India also has such an arrangement with Nepal.
The G-20 members have also shown keen interest in international taxation issues for realizing the vision of a fair, sustainable and modern tax system. It was an important subject of discussion in the Washington meet, the fifth takeaway. When free trade is becoming order of the day, only a rule based, rational and consensual international tax structure could ensure seamless business and a level playing field.
The sixth takeaway is that India has been able to evolve a general consensus on need for regulation of crypto assets. The discussion at Washington on crypto assets also highlighted that crypto regulations should factor in the fact that these regulations would not affect only the advanced nations but also the developing an emerging economies.
India has reiterated its desire and resolve to keep G-20 as a non-political forum mainly directed to find together solution to economic and sustainable development challenges facing the world. Despite this, the discussions on drafting the communiqué for the G-20 leaders’ summit in September 2022 is getting more complex because of demand for reference to Russia-Ukraine war by some countries while others find it beyond the G-20 mandate.
India is expected to succeed in making a consensus on the draft because it is sincerely urging the members to keepG-20 a non-political forum as it was conceived when the forum came into existence. It is already getting support from many countries in this bid including Indonesia, Brazil, South Africa and the logic of this idea is contagious, especially when the world is so divided on political issues. India’s position is not only sovereign and neutral but also in line with G-20 mandate and principles.
The G-20 is a unique forum of advanced and emerging economies to deliberate on global economic challenges and find collective and consensual solutions. The EU also enjoys a member status in G-20 as a group.
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