Mainstream Weekly

Home > 2022 > The Bali Summit and India’s G20 Presidency | P S Jayaramu

Mainstream, VOL 60 No 50-51, December 3, December 10 2022 [Double issue]

The Bali Summit and India’s G20 Presidency | P S Jayaramu

Friday 2 December 2022

by P. S. Jayaramu

November 28, 2022

India accepted the Presidency of the G20 at the recently concluded summit at Bali, Indonesia. This is both an opportunity for India to project its leadership of the Global South as well as a challenge, as the Indian leadership will have to, in the next one year, use its diplomatic skills to bring on board the developed nations in the group towards working for solutions to the numerous issues ranging from the Ukraine war and its impact on the world at large. India will also have to take meaningful initiatives to come up with an action plan to meet the consequences of the recession unfolding in the US and Europe, climate change etc. More about this later.

A brief history of the G20 :

Let me briefly recount the path traversed by G20 ever since it came into being in 1999. It is imperative to stress that the G20 is a unique group consisting of countries belonging to the developed North and the developing countries - the Global South. The same can be understood by gleaning at the list of its members which include Australia, Canada, EU, France, Germany, Turkey, Russia, UK, USA, representing the developed countries and nations like Argentina, Brazil, China, India, Mexico, South Africa, South Korea, Saudi Arabia representing the developing nations. The member nations have diverse political systems and cultural identities. A notable feature is they represent around 90%of the global GDP, about 80% of global trade and two-thirds of the world population.

The group was set up in response to the financial crisis faced by a number of emerging economies in the 1990s and the fact of their not being represented in global negotiations on economic and governance related issues. To make a beginning to remedy the situation, in December 1999, the Finance Ministers and Governors of the Central Banks of G20 met in Berlin, Germany, for an informal dialogue on key issues of trade to infuse some economic stability. Since then, such meetings are taking place regularly. The G20 assumed significance in 2008, as it held the first summit attended by Heads of State/ Government of member nations. The leaders discussed the causes of the global economic and financial crisis and agreed to implement an Action Plan centered round three objectives: a)restoring global growth, b) strengthening the international financial system and c) reforming international financial institutions. Very relevant objectives, however, not yielding unanimity on dealing with the multiple crises at that point of time. The second summit at London in 2009 announced a stimulus package of 1.1 trillion dollars to restore credit and strong regulatory provisions, expansion of Financial Stability Forum and the setting up of the Basel Committee on banking supervision, reiteration of commitment against protectionist trends and commitment to reforming the international financial institutions. The third summit at Pittsburg in 2009 made the important decision of designating the G20 as the ‘premium forum’ for international economic cooperation to guide the group for ‘a strong sustainable and balanced growth’ in the 21st century. Decisions were announced to shift IMF’s quota share to emerging markets of developing countries, increase the voting power of the developing countries by 3% and to ensure that the World Bank and regional development banks provide sufficient resources to address global challenges. The G20 has so far held 17 summits meetings, including the recent one at Bali. These summits, among other things, have led the way to the formulation of the Seoul Development Consensus and the associated Multi-Year Action Plans, enhancing food security by addressing commodity price volatility. The Mexico summit in 2012 gave a call for promoting sustainable development, green growth and the fight against climate change. The Bali summit’s communique stressed the following:

1) keeping in mind the urgency of finding a diplomatic and negotiated settlement of the ongoing Ukraine war and admitting to different assessments among the members about the conflict, the summit underlined the need to “uphold international law and the multilateral system that safeguards peace and stability”. The Communique said: “the use or threat of use of nuclear weapons is inadmissible”. Echoing Indian Prime Minister Modi’s statement that “today’s era must not be of war”, the summit called for a peaceful diplomatic resolution of the the conflict.

2) Addressing the global economic challenges and the impending threat of recession in the US and Europe and its consequences for the developing world, the summit underlined the need for the group to undertake “tangible, precise, swift, and necessary action, using all available tools to address the common challenges , including through international micro economic policy cooperation and concrete collaboration”. High sounding appropriate words, but the desired results may not be easy to come about as they call for a genuine willingness on the part of the member states, developed and the developing, to work for common good. The Indonesian Presidency’s theme- Recover Together, Recover Stronger, must become the guiding principle of the G20 in the days to come.

3) The Bali summit called for taking action to promote food and energy security promoting trade and investments among the member nations. This task acquires greater urgency as many parts of Africa are facing famine and or severe food shortages. As part of a larger effort, the G20 should work in close collaboration with the UN Secrrtary General’s Global Crisis Group on food, energy and finance.

4) The Communique also called for ensuring adequate investment for low and middle income countries through greater innovative financing methods, including private investments, to support the achievement of the Sustainable Develooment Goals (SDGs). Governments need to put pressure on industries to take up private investments on an urgent and steady basis.
5) More importantly, the summit called upon all Parties and countries to finalise and adopt the Global Biodiversity Framework (GBF) with the view of realising the 2050 Vision of “Living in harmony with Nature”. This task brooks no delay. This is wheredivergences are bound to crop up among the rich and poor members within the group.

India’s G20 Presidency : opportunities & challenges

At the concluding session of the summit, accepting charge of the G20 Presidency, Prime Minister Narendra Modi talked of the “need for grappling with the geopolitical tensions, economic slowdown, rising food and energy prices and the long term ill-effects of the Covid-19 pandemic.”. Stating that the world is looking at the G20 with hope, Modi assured that India’s Presidency will be “inclusive, ambitious, decisive and action- oriented”. He referred to the G20 acting “as a global prime mover to envision new ideas and accelerate collective action”. Alluding to how the ownership over natural resources may lead to conflicting positions, Modi said the future of the planet can be assured only a sense of trustee ship. He said that LIFE, i e, Lifestyle for Environment Campaign can be a big contribution with the purpose of promoting sustainable lifestyle as a mass movement. He talked of making the G20 a catalyst for global change.

Opportunities and challenges:

As is well known,the G20 does not work through a permanent Secretariat of its own. The key decision making is done by a Trioka consisting of past present and future Presidents, supported by other groups. To India’advantage it has Indonesia as the past President and Brazil as the future President as India will pass on the baton to Brazilin 2023. Thethree members of the trioka thus belong to the developing South, offering some advantage to India to forge common ground on the major issues to be encountered during its Presidency.

On the Ukrainian issue, though the Western world was initially not happy with India’s absententions in the UNSC and UNGA, they have come round to understand, specially after Modi’s informal urgings with the Russian President Putin to return to the negotiating table, that India has the potential to bring Russian and Ukraine to the path of diplomacy. However, with both Russia and Ukraine adopting rigid positions-Russia unwilling to give up its control over the Donbas region etc, and Ukraine swearing to recovering its captured territories, the path to negotiated settlement appears distant. That said, it can however be asserted that if any country can play play its good offices-cum- mediatory role at this juncture, it is only India. The Indian leadership, specially foreign minister Jaishankar, will have to build on this advantage. India should send its emissaries to the western capitals, including Russia and Ukraine, to prepare the groundwork for an eventual diplomatic resolution of the Ukrainian conflict. One of the equally important tasks to be undertaken by India is to ease the food and fertiliser supply bottlenecks created by the war in Ukraine. India needs to convince the developed nations to come together and provide steady supply of both food and fertisers. As Modi told the Bali summit, “today’s fertiliser crisis will be tomorrow’s food crisis”. Ensuring food supply should be a priority for India’s Presidency.

As regards the economic situation and containing the possible impact of the impending recession in 2023, India’s relatively better performance than the US and European economies, puts the leadership in an advantageous position to bring round the developed and developing nations within the G20 to work out a common ground for dealing with the issues. India will have to explore the possibilities of working with China in this regard, given the fact that the Chinese economy too is doing better than the developed nations. Working with the international financial institutions like the IMF, the OECD and the WTO will also have to priority. The focus should be to negotiate soft loans and other assistance to the developing countries in the group. India’s economic diplomacy will have to come up with an agenda to elicit unanimity among member nations for collective economic good and wellbeing.

Climate financing is another field in which India will have to work with the prosperous nations within the G20.Through bilateral and multilateral channels, the developed nations will have to be pressurised to transfer technologies as well as renewable energy sources to the developing nations within the group. India’s strides in solar energy generation should come handy in taking such initiatives.

During its Presidency between 1st December 2022 and 30th November 2023, India is expected to host about 200 meetings at the official and ministerial levels. So, India’s plate will be full during the course of the year. This a also an opportunity for India to project its leadership of the Global South.

(Author: Dr. P.S. Jayaramu is former Professor of Political Science, Bangalore University and former Senior Fellow, ICSSR, NEW Delhi)

Notice: Mainstream Weekly appears online only.