Issues that are clearly on focus in the Group of 20 (G20) largest economies at the behest of India’s presidency are those that affect the Global South – debt restructuring, reform of Multilateral Development Banks and climate financing.
At the outstart of the first session of the G20 New Delhi summit (September 9-10, 2023), Prime Minister Narendra Modi urged the world to move from ‘global trust deficit to global trust’ and he said that the world must look at ‘concrete solutions to terrorism, climate change, and supply chains. There needs to be a human centric approach to all the challenges that the world faces today. In his inaugural address Modi said the group “will have to look at concrete solutions to terrorism, climate change, supply chains and cyber security.” What else is expected today? It remains to be seen how much of what the Delhi declaration has taken on will actually deliver.
The war in Ukraine is not formally on the agenda and yet it is on the minds of most of the leaders from the west. The Ukraine conflict was a centrepiece of the G20 agenda both in Bali last year and is on the sidelines of discussions this year as well.India particularly which has close strategic ties with Russia, is finding it very difficult to be the bridge builder between the West and the East. There is a growing sense among the Indian diplomats that too much effort is being spent on trying to solve the political contentions over Ukraine and perhaps narrowing that agenda is one way to resolve the differences within the organisation. At the G20 media briefing Sherpa Amitabh Kant made a point about bringing the agenda back to the initial purpose of G20 being fundamentally an economic organisation.
In fact because of differences and the polarising effect of the War in Ukraine, there was intense speculation that the current G20 summit would not be able to agree upon a joint declaration. However, the leaders managed to agree upon the wording and the ‘Delhi declaration’ was released the first day of the summit, September 9th itself. It appears to be one of the most wide ranging in terms of issues it has addressed. In a significant shift from the Bali declaration in 2022, the language of the G20 New Delhi joint statement refers to “war in Ukraine” and not “war against Ukraine.” US led western nations had previously refused to accept that formulation, because “wai in Ukraine” implies both sides are equally to blame for the war.
The G20 first met right after the 2008 financial crises and when it was started it was very much a community of the world’s largest nations dedicated to solving problems within the financial and economic architecture of the world. Since then mandate has widened significantly and over the years G20 come together to routinely address global problems. Increasingly they were becoming more geopolitical in focus. Under India’s Presidency the message that was put out was that the G20 is not the platform to resolve geopolitical and security issues.
Among the scores of agreements announced at the G20 New Delhi Summit the one that has generated maximum interest is the ‘India-Middle East-Europe Economic Corridor Partnership.’ flanked by US President US Biden and Saudi Arabia Prime Minister Mohammed bin Salman at the G20 Summit, Prime Minister Narendra Modi said that the proposed India-Middle East-Europe Economic Corridor (IMEC) will enhance connectivity for economic integration and would be launched soon. The planned IMEC has been jointly spearheaded by India and the US, and will involve, aside from India and the US, UAE, Saudi Arabia, EU, France, Italy, and Germany.
Warmly embracing African Union chair and Comoros President Azali Assoumani amid thunderous applause, Prime Minister Narendra Modi declared that the African Union (AU) had been granted permanent membership in the G20. The inclusion of the African Union in G20 signals the right step in an appropriate direction with respect to reforms that the global South has been seeking in various multilateral institutions. The AU has advocated constantly for reforms to take place with respect to global financial institutions and the manner in which development is funded, for reform in the United Nation Security Council. The recent BRICS summit declared itself quite well in that regard. The inclusion of the African union to the G20, thus now the G21 signals a very positive step towards the latter’s advocacy of reforms.
In terms of putting the global economy back on track one relevant and critical agreement has been the ‘Green Development Pact’ for a sustainable future. Ursula von der Leyen, President of the European Commission, and Charles Michel, President of the European Council pledged to invest “at least 4 billion euros in renewable energy and hydrogen in developing economies through the EU’s “Global Gateway plan” in the next 5 years At the New Delhi summit the leaders announced the Global Biofuel Alliance (GBA) aimed at facilitating international cooperation and intensifying the use of sustainable biofuels.
The G20 independent expert group has submitted its first report and another step towards strengthening multilateral development banks (MDBs) and to collectively work towards boosting World Bank financing capacity. Options will be explored that will develop a powerful boost to the IBRD head room to support low income and middle income countries. There was agreement on the endorsement for the G20 road map for implementation of the recommendations of an independent panel on capital adequacy framework of the MDBs. Rallying to boost the World Bank’s capacity, US President Joe Biden said “We are aiming for our joint contributions to deliver a one-time boost to IBRD (International Bank for Reconstruction and Development) equivalent to three times the World Bank’s annual non-concessional lending volume, and to double IDA’s crisis lending capacity.”
On cryptocurrency the G20 member nations on Saturday endorsed the Financial Stability Board’s recommendations. Concentrating more on the regulation, supervision and oversight of crypto assets the IMF-FSB Synthesis Paper, lays out a roadmap, for regulatory framework accounting for risks specific to the “emerging market and developing economies (EMDEs) and ongoing global implementation of FATF standards to address money laundering and terrorism financing risks.” The G20 Finance Ministers and Central Bank Governors are likely to discuss taking forward the crypto roadmap at a meeting in October 2023.
These are the most formal issues that are on the agenda of the global leaders. But there are a set of significant issues that are taking place on the margins of the New Delhi summits of the G20 which have reflected themselves in the bilaterals. The bilateral between President Joe Biden and Prime Minister Modi on September 8 was extremely significant and both leaders agreed to a range of things from climate finance to digital infrastructure agreements. Among others Prime Minister Narendra Modi held a significant bilateral with Japanese PM Fumio Kishida to enhance cooperation in connectivity, commerce and other sectors.
Finally for all its grandstanding there is a lot of unfinished business in the G20. There is no end to the ‘War in Ukraine’; the supply chains continue to be disruptive as we recently saw the Black Sea Grain initiative could not be resolved, a problematic trade war and fence-sitting over decoupling have led to inconstancy in the business atmosphere; similarly in terms if financially addressing sustainable development goals, climate change mitigation, the progress is truncated. The New Delhi Summit certainly attempted to address all these issues.
Despite pressures from the G20 Delhi declaration refrained from any condemnation of Russia. The language was positive and mentioned that both sides should “refrain from the threat or use of force to seek territorial acquisition.” The most significant outcomes remain the inclusion of the African Union into the bloc and the Narendra Modi government’s sovereign stand on the Russia-Ukraine war. The summit declaration was termed “people-centric, action-oriented and far-sighted” reflecting a “shared path for all”, ensuring that countries of the Global South are not left behind.