The Indian Presidency of G20

The Group of Twenty nations (G20) multilateral forum provides a platform for collective thinking and actions at  times of global crises from climate, financial upheavals, energy and food insecurity, and wars. At this critical conjuncture when the international community faces polarised geopolitics amidst the shadows of a long war of attrition, the Indian Presidency of this forum is appropriate and challenging.

G20 concerns and responsibilities

G20, described as “the premier global forum for discussing economic issues”, has expanded its agenda since its formation in 1999. In 2022, as we are collectively impacted by war, climate change, ecological degradations, social inequalities, fears of recession and turmoil, this forum assumes greater roles and responsibilities. G20 brings together the most industrialised countries of the North and the fast industrialising developing countries from the Global South and is a forum for North South dialogue. It envelops groupings like the Group of Seven (G7) and BRICS (Brazil, Russia, India, China, South Africa), besides several regional leaders. Major multilateral institutions like representatives of the World Bank, International Monetary Fund (IMF) and World Trade Organisation (WTO) attend its meetings. Contesting narratives amongst major powers come to the fore and this grouping has seen fractious debates on issues of terms of trade, finance, migration policies, climate and health finance. Leaders of the G20 have remained committed to this body since there can be no alternative to diplomacy and debate, especially since the global rhetoric is about rules and laws. G7 focuses on security and political issues whilst G20 focuses on global economic and financial architecture and India will stick to this format. India would like to ensure that this platform continues robust debates and practices diplomacy for global common good.

Since the presidency passes from Indonesia to India for 2023 and then to Brazil, all three major countries of the Global South, the concerns of the South on development and peace are bound to be an important part of the agenda these coming years. The three presidencies from the South have not been party to the ongoing conflict between Russia and Ukraine and have a good standing to advocate for peace negotiations and diplomacy.

Voice of India

It is worth noting that India is positioning itself as a voice for the Global South. Indian finance minister Nirmala Sitharaman said that India “will try to be the voice of the low income countries”.[i] Earlier Indian foreign minister S. Jaishankar similarly stated that “many consider India as a voice of the Global South” (S. Jaishankar, 25 September 2022). So the Sherpa track will try and accelerate development issues. For the finance track, issues of global taxation would be of relevance. Sitharaman said there was a need for global regulation to prevent crypto misuse for terror funding and money laundering. Other policy shapers envisage that India sees G20 as a platform for developing countries and is keen to make a difference.

Indian G20 Sherpa Amitabh Kant has talked about  “a fractured world outside” where the Russia-Ukraine war, China-Taiwan issues, disruption of global supply chains, setbacks to the Sustainable Development Goals (SDGs) on account of COVID-19 pandemic, unprecedented global debt, means a global slowdown, a predictable recession, and  many related challenges.[ii] Under these circumstances, India will try and leave the talk on war, peace and security for the United Nations and focus on issues of growth, finance, development linked with the implementation of the SDGs and how the late industrialisers can industrialise without carbon.[iii]

The core of the Indian strategy during the year of presidency, as identified by the chief economic advisor to the Indian Government, is “to identify a consensus- based solution and accelerate the response of the global community”[iv]. So items like short term finance for low income nations will be a priority. Further it is hinted by policy makers that crypto currency regulation would be a priority during the Indian Presidency.

Agenda

The year of Indian Presidency 2023 will likely have broad based agendas and work through the year at multiple levels without a linear order. Sitharaman spoke of eight key priorities for the Indian Presidency of G20: Reform multilateral institutions; resolve debt entrapment; support SDGs; resume quality infrastructure agenda; promote digital revolution; and ensure food and energy security (including climate financing). She mentioned that the official priorities were not yet finalised, however, the priorities she outlined made clear sense since these were continuing and urgent global issues. Sitharaman also said that this was a turbulent period on account of the impact of COVID-19 and geopolitical spill overs (which will be talked about during the meetings).[v]

The Indian Presidency would in all likelihood propose creative legacy ideas for G20 that are popular and being experimented in India – for example, ideas around Lifestyle for Environment (LiFE), women’s digital empowerment,[vi] deepening digitalisation in agriculture, development sectors, rural sectors, methodologies for climate financing, circular economy, reforms of multilateral organisations, energy security and a host of other pertinent issues.

India is bound to take up issues of interest for the South like indebtedness. World Bank president David Malpass suggested “a more effective common framework” on indebtedness could be an opportunity for India to advance during the 2023 presidency.[vii] The earlier IMF and G20 initiatives on debt relief expired in 2022. Moreover, the G20 initiative called the ‘Common Framework’ did not deliver what it promised on debt relief and many countries need urgent support. The Indian Presidency is likely to advocate discussion with outcomes on indebtedness.

The support for just transition for energy and other issues of sustainability will surely be tabled by the Indian side. India has reiterated the transition to renewable energy but with a sustainable transition, in keeping with the goals outlined earlier at the Paris summit. The International Solar Alliance (ISA) with 121 countries of the Torrid Zone (Sunshine Countries) would work for a solar initiative but badly require finance and research and development to advance this programme. Similarly the concept of a blue economy for oceanic resources would be a narrative that India puts forward, given that it has developed groupings like the Indian Ocean Rim Association (IORA) that has been meeting since 1997 taking up issues like terrorism and security, and the BIMSTEC alliance (Bhutan, Bangladesh, India, Myanmar, Nepal, Sri Lanka and Thailand), which has prioritised energy cooperation.

Leading research institutions and think tanks have been consistently working on G20 research and issues of interest and are exploring policies that can be considered[viii] – for example, advocating the formation of a dedicated interdisciplinary team within G20 to coordinate effort and reflect a digital dimension in the Quality Infrastructure Investment framework.[ix]

Consolidation

It will be in the fitness of G20 if broad vision ideas like inclusive, equitable and sustainable growth are consolidated in practice. It is likely that India would coalesce two programmatic themes of South-South Cooperation (SSC), the Indian development assistance for countries of the Global South and the technology facilitation mechanism (TFM) under the post 2015 development agenda. India, the Group of 77 (developing countries) and China have for long been arguing that TFM be given a place by multilateral bodies, since the transfer of technology is most important for sustainable development.[x] Transfer of technology regime is a game changer for the global South.

Continuity

Continuity from the Indonesian Presidency year and G20 history is a priority that builds on past strengths. The core agenda of G20 is of restoring economic growth, strengthening the international financial system, and reforming international financial institutions. Within this three traditional paths (i) finance track that focuses on global macroeconomic policies and issues of global finance; (ii) sherpa track with working groups that range from anti-corruption, agriculture, culture, development, economy, health, education, energy, trade, tourism, investment; (iii) 10 Engagement Groups like civil society (C20); Business (B20); Women (W20); Labour (L20); Youth (Y20) and so on will be followed as in the past.

How much does G20 matter?

The G20 nations together account for about 80 per cent of global economic output, 75 per cent of global exports, 60 per cent of world population, 84 per cent of all fossil fuel emissions and hold 90 per cent of global patents. While the corresponding rates for the G7 have been shrinking, the same rates for the emerging economies have relatively increased. Of course, some countries see this relative decline as a threat to their dominance. This increases tensions and sharper approaches.

While G20 was effective in dealing with the 2008-2009 financial crises, it was conspicuous by its absence in the 2012 Eurozone crises[xi] and even more so in the 2020-21 COVID-19 pandemic. G20 faces several questions including legitimacy. One common assertion is that much of the work that emerges out of G20 “remains oriented to the political and economic predicament of their economies.”[xii] Some commentators feel that this is an exclusive club.[xiii] Another critique is that the statements that come from the ministerial working groups are long in intent, but short on practical measures. The focus on individual nations’ priorities as opposed to a collective common good has also been pointed at. The Indian Presidency would like to develop a balance between these tensions to keep the pace of development going.

Indonesian Presidency

The Indonesian Presidency year 2022 with the banner of “Recover Together, Recover Stronger” focused on three pillars: Global health architecture, sustainable energy transition and digital transformation. Indonesia facilitated that development be advanced by promoting sustainable and inclusive economic development through the digital economy and the participation of micro, small and medium enterprises (MSMEs). Reforms in global taxation, fighting corruption, deepening infrastructure financing, and pushing for more democratic and representative international cooperation were part of the conversations of the engagement groups in this past year.

The Indonesian Presidency spoke on their response to COVID-19, their commitment to land rehabilitation and conservation. They also addressed Indonesian economic reforms, outlined economic development through the master plan that involved infrastructure push and public private partnerships, and made all attempts to ensure energy security. The Indonesian Presidency did not hesitate to admit that inequalities that exist in fields like in girls’ education, digital gaps in education sector, gap in skills, and other cleavages need to be filled. The Indonesian Presidency had proposed that a Financial Intermediary Fund (FIF) promoted by G20 should focus on existing inequalities and prevention of pandemics through people centric approaches. This will have to be fleshed out in this coming year.

Issues

Previous summits addressed the 2008 financial crises, the Iranian nuclear programme and how to respond to the Syrian civil war. The robust response to the 2008 financial crises boosted this forum, which, however, appeared frayed when it came to addressing the COVID-19 global pandemic. The current Ukraine-Russia war is witness to different narratives between G20 members, these differences are likely to spill over for the years to come and G20 will have to navigate through this.

Civil society engagements

C20 Indonesia drummed up inputs from 280 civil society organisations (CSOs) from over 55 countries as well as 556 delegates from Indonesia. In their preparatory meetings that worked to give an input into the final declaration, C20 called on leaders of G20 “to end their self-interest and work as a united front to solve the crises.”[xiv] CSOs are asking the governments to be more accountable for their commitments, support just energy transitions through setting clear targets and policies to curb carbon emissions in G20 countries and prioritise shifts to sustainable sources for secure energy future and a secure global health architecture. CSOs are appealing that G20 take into account gender equality in all fields, and calling out for tax justice, sustainable finance and inclusive digital transformation.

Civil society recommendations can serve as a balancing aspect that minimises “business as usual” in G20 agendas amid turmoil, exacerbated with the Ukraine-Russia war. C20 urges G20 leaders to listen and take action on the issues that directly impact people’s lives on their agenda. In Indonesia youth groups focused on showing the impact of their Green Student Movement and the role of youth in the climate movement.

Business 20

B20 Indonesia produced two legacy programmes: 1. Carbon Centre for Excellence to navigate carbon trading through best practices and sharing knowledge. 2. “B20 Wiki”, a platform that aims to increase the capacity of MSMEs  to enter the global supply chain. This is the baton that India engagement groups and civil society will have to take forward.

Religion Forum-R20

This forum for inter-religious figures and discussion has become a working group with the initiative of Indonesia, with consultation with India, which takes over. In its meeting, this R20 raised hopes that this dialogue would serve as not “merely a conference; but a global movement”[xv] with religious leaders and with focus on striking a balance between religious traditions and relevance in the modern world. The meeting also spoke on the plight of religious minorities.[xvi]  India has taken over this forum with the resolve to continue this dialogue.

India’s history in G20 and in multilateralism

India’s aspirations for G20 currently extend from their hopes during the early years of their engagement in the forum. India’s former chief economic advisor Montek Singh Ahluwalia summed it up in 2009 as: (i) Hopes for the revival of the global economy, which required that the banking sector in the West be fixed. Developed countries avoid protectionism, which include not just tariff barriers but access to trade finances. (ii) Hopes for assistance to developing countries, which suffered on account of withdrawal of private capital because of the 2008 banking crises. (iii) Better global governance for global integration. This means more representative international financial institutions (IFIs) and their capitalisation. (iv) The agenda of G20 is widened to take into account particular requirements of developing countries.[xvii] Many of these issues remain and are likely to be tabled in creative, current and contextual forms by India.

India’s long engagement with multilateralism has seen several phases, and we would agree broadly by the demarcation of phases made by Kumar. The early (post-independence till the early 1960s) phase was marked by morality and universalism, which ended when the UN took a position contrary to Indian arguments on the Kashmir issue. The second phase (1961-1991) is categorised by Kumar as parallel institutionalism where India engaged in Third World solidarities of constructing forums like the Non Aligned Movement (NAM), and G77 that provided voice for third world concerns to highlight global injustices, push for fair trade and services practices, even while these had limited outcome.[xviii] These collective fora of the developing countries kept weaker countries away from bipolar geopolitics, in an atmosphere of proxy wars and interventions. The third phase coincides with India’s projection as an ‘emerging economy’ and desire to catapult itself on the side of the ‘great powers’. India connects with realist foreign policy positions, forsakes universal disarmament, and builds strategic alliances with the US in ‘multi alignment’, which is called a risk-averse strategy of navigating a multipolar world[xix]. With this background, we argue that India’s foreign policy stance of ‘neutrality’ in circumstances of the Russia-Ukraine war is distinct from non-alignment, focuses on strategic autonomy, looks at transactional and pragmatic choices in world issues and is distinctly anti-war. This neutrality serves the Indian Presidency of G20 since India, like Indonesia and a select few, can act like a bridge between two sides that have no confidence in each other.

The Ukraine-Russia war has accelerated a transition in international geopolitics. The collective West poses the international discourse as one between democracies and authoritarian countries and nothing in between. Theoretically this can mean an exclusive multilateralism. However, there is no alternative to diplomacy and for that multilateral engagement is necessary. The G20 emerges as a major platform where polarised sides can engage. India as President and host of G20 would like to facilitate this engagement. Since India sets the agenda, they will take care to keep fractious issues off the table, and in any case find ways to build some consensus wherever possible.

Theorising multilateralism

Multilateralism as a coordinated inter-state engagement based on an agreed set of rules or principles seeks to develop principles that guide interstate relations. This entails consultations and informal adjustments among states. A multilateral form like G20 does not involve ceding sovereignty (like the EU does).

Conclusions

The Indian Presidency has come at a critical conjuncture of world history where the severe and existential challenges like climate change, the ongoing war of attrition, ecological degradations, energy and food insecurities, and social inequities need continuous dialogue and global solutions. Yet international narratives and opinions are deeply polarised. Indian Prime Minister Mody stated that the Indian Presidency will be “inclusive, ambitious, decisive and action oriented”.[xx] India will facilitate dialogues on all pending macro issues from climate, energy, tax and financial reforms with micro practical needs and operational issues from trade regulations, digitalisation in various sectors. India will make special efforts to focus on sustainable development needs of the Global South and probably propose some creative funding methodologies for transfer of technologies for these key sectors. The search for consensus and outcome documents will be challenging for the Indian Presidency, and the year promises to be an exciting one.