In December 2022, India inherited the leadership of the Group of Twenty countries (G-20). Collectively, this consensus-based informal but influential forum of 19 countries and the European Union, brings a diverse and compelling mix of advanced and emerging economies that represent two-thirds of the world population, 75% of the global GDP, and 80% of the world’s carbon emissions.
Some of the G20 countries are also members of the G7 and BRICS, as well as permanent members of the UNSC. The West-dominated UNSC is far too politicised for broad-based outcomes and increasingly, in the changing world order, becoming questionable if not irrelevant. While the relative contribution of the G7 countries is steadily declining, BRICS stock, on the other hand, is on the upswing and its member countries growth rate is predicted to exceed that of the US and European countries by 2030. What is discernible in the international system is that political influence and economic weight has diffused and steadily shifted eastwards. Given the G20 broad representation (G7 and BRICS can be seen as sub-groups of G20), it seems more likely that G20 will emerge as an important influencer in the international system.
Unlike the G7 and BRICS that are not averse to dealing with political and security issues, the G20 consciously steers away, focusing on global economic issues and, in recent times, on development and sustainable balanced growth. This, of course, does not mean that G20 is shielded from global political repercussions. The G20 non-hierarchical organisational structure with rotational leadership allows for inclusiveness that can bring in different actors and their voices, including the developing countries, together for global policy cooperation. However, within the G20, the G7 will safeguard its members’ interest and influence while BRICS leaders will protect and consolidate their position. Taking this reality into account, for the G20 to have a catalytic influence particularly in the reform of the IMF, multilateral development banks and the WTO, the collaboration of the G7 and BRICS will be critically important. The G7, BRICS and G20 have to work in cohesion rather than at cross-purposes.
How G20 came about
The inception of the G20 in 1999 came on the back of the economic crisis that swept across most of the tiger economies of Southeast Asia and the insufficiency of the G7 countries (Russia joined the group in 1998 but was expelled in 2014) to deal with it. The G7’s declining economic weight vis-a-vis the rapid growth of the emerging economies, especially in Asia, was an indicator of the broader trends in the global economy and the tectonic shifts in economic clout.
In the aftermath of the global economic crisis (2008-2009), the G20 was effective in not only stabilising the global financial markets but also infusing an economic stimulus, thereby averting a possibility of an economic depression. The epicentre of this crisis, to recall, lay in the advanced economies. The G20 Framework for ‘Strong, Sustainable and Balanced Growth’ launched in 2009 was, to a large measure, intended to provide policy approaches to stimulate high and sustained financial flows to the developing world. While the finance track remained much in focus, the shift to a development agenda came about at the G20 Seoul Summit in 2010 and the following year, the G20 agreed to “coordinate their policies and produce political agreements that are very important in addressing challenges due to conditions of global economic interdependence”. Thereon, the G20 leaders’ summit, though technically a meeting on ‘financial markets and the world economy’, has not been bereft of the increasingly complex and fraught multipolar order.
Now that sustainability agenda has become important with the climate change discussions and the green deal, a more inclusive development track, including the developed countries, has become a possibility. A sound development track agenda can help combine developed-developing country learning processes and generate effective solutions on several global challenges that are interconnected. For example, in the global health system, the developing countries experience and creative problem-solving approaches can inform responses to challenges in the developed countries. In fact, dealing with non-economic risks is central to the efficacy of the G20 in maintaining global economic stability.
One is reminded of Narendra Modi’s statement in the 6th BRICS summit in Brazil in 2014, soon after becoming India’s prime minister, and probably the first time introducing Vasudhaiva Kutumbakam to the international audience. He said, “We are meeting at a time when the world is facing a high level of turmoil and uncertainty. Global economic weakness also persists. Restoring a climate of peace and stability is therefore an urgent need for global progress and prosperity. I come from a land where the idea of the ‘whole world being one family’ is rooted in our ethos – Vasudhaiva Kutumbakam. The World must unite as one to decisively confront global challenges. Corrective action must begin with the reforms of institutions of global governance,”
India’s presidency of G20
India’s presidency of the G20 offers a unique opportunity and ‘unwavering commitment’ to deal with delivery plans for economic development and a pro-poor, pro-climate-oriented growth models. Foremost, India has to enhance the legitimacy of the G20 that is not reflective of elite priorities and the machination of great power, but more people-focused and inclusive. The world outlook is frightening and uncertain with the human tragedy of war, supply-chain disruption and higher-than-expected inflation that is exacerbating a cost of living crisis. If ever there was an opportune time of overcoming the logic of anarchy and power play through the process of institutions and interaction, it is now, through the G20 and with India at the helm.
India should not shy away from infusing or even restructuring G20 into a more effective policy cooperation group. For example, while the IMF and, in recent times, the ADB are the knowledge partners for the G20 finance track, the participation of OECD and the World Bank in the development track is much left to be desired, especially since climate policy governance and energy transition are key priorities that require changes in industrial and trade policies. The participation of the African Development Bank and other regional development banks can equally play an important role in shaping future discussions while simultaneously making G20 broad-based in its financial and development representation.
The ruptured strategic landscape, from the pandemic fallout to the conflict in Ukraine, from hardening geopolitics to trade imbroglios and energy crises, poses a number of challenges to India’s G20 presidency. Ensuring the effectiveness of multilateral cooperation will crucially hinge on whether the fissures in the G20 narrow or expand to a breaking point, especially with US-China relations at an all-time low and Russia’s unabashed neo-nationalism. Therefore, it is of critical relevance that more than short-term crisis management, India needs to infuse long-term agenda, for example a call for reformed multilateralism and transforming global institutions and frameworks to reflect the realities of the changing global order.
More than any other country at this point of time, it is India that can add new momentum and direction to the G20. India’s real GDP growth forecast is the ‘fastest’ as compared to the US, China and the EU. This gives enormous credence for India to be the voice of the Global South that includes developing and less developed countries in Latin America, Asia, Africa and Oceania. But shared prosperity without peace is untenable and therefore, India’s active acclamation of a ‘polycentric world’ based on dialogue and diplomacy ushers in a leadership trust that can bolster the G20 objectives. The G20 ‘Troika’ of the past, present and forthcoming leadership (Indonesia, India and Brazil) marks not only the rediscovery but the re-energising of the Global South. India’s G20 presidency can potentially become a watershed moment in global governance.
(The author works at the Manohar Parrikar Institute for Defence Studies and Analyses, New Delhi and is the Managing Editor of the Routledge-published Strategic Analysis).