G20 NEW DELHI SUMMIT 2023 - ANALYSIS

-*Dr. S. Vijay Kumar The G20 is a Group of 20 countries comprising 19 of the world’s largest economies, as well as the European Union (EU) and 01 Country as a permanent guest . The Nineteen countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom (UK), United States and, One County - Spain is invited as a permanent guest. The G20, formed in 1999, meets regularly to coordinate global policy on trade, health, climate, and other issues. The G20 is not a permanent Institution with a headquarters, offices, or staff. Instead, its leadership rotates on an annual basis among its members, its decisions are made by consensus, and implementation of its agenda depends on the political will of the individual countries. The Group of G20 was conceived as a bloc that would bring together the most important industrialized and developing economies to discuss international economic and financial stability. Its annual summit, a gathering of G20 leaders that debuted in 2008, has evolved into a major forum for discussing economics as well as other pressing global issues. Bilateral meetings on the summit’s sidelines have occasionally led to major international agreements. Together, the nations of the G20 account for around 80 percent of global economic output, nearly 75 percent of global exports, and about 60 percent of the world’s population. Previous summits have addressed the COVID-19 pandemic, 2008 financial crisis, the Iranian nuclear program, and the Syrian civil war. The Russian invasion of Ukraine deepened divisions within the group, leading experts to predicted that it will struggle to find consensus at its 2023 summit in New Delhi, India. India convened 18th G20 Leaders' Summit for the first time at New Delhi on 9th and 10th September, 2023 chaired by the Indian Prime Minister. Narendra Modi committed to democracy and multilateralism, India's presidency is significant milestone as it seeks to find practical global solutions for the benefit of all and embody the idea of "Vasudhaiva Kutumbakam," or "the world is one family." *Retired HOD & Associate Professor of Economics, KGC (NAAC “A” Grade College), Ex- Member of Board of Studies in Economics, Kakatiya University, Warangal, Telangana State (India). 1 Brief History of G20 Countries: The G20 was formed in 1999, in the wake of the Asian financial crisis, to unite finance ministers and central bankers from twenty of the world’s largest established and emerging economies. A decade later, at the height of the global economic crisis, the G20 was elevated to include heads of state and government. In 2008 and 2009, G20 nations agreed to spending measures worth $4 trillion to revive their economies, rejected trade barriers, and implemented far reaching reforms of the financial system. G20 is struggling to achieve success on its goals of coordinating monetary and fiscal policies, achieving higher growth, and rooting out corruption and tax evasion. G20’s membership is still more representative of the current international balance of power than blocs of countries formed earlier, such as the G7. Several democracies like India, Brazil and Indonesia, belong to the G20, as do other influential autocratic countries, such as China, Russia, and Saudi Arabia. The G20 initially focused largely on broad macroeconomic policy, but it has expanded its ambit. The 2016 summit in Hangzhou, China, broke new ground when U.S. President Barack Obama and Chinese President Xi Jinping formally announced their countries’ accession to the Paris Agreement on climate. Economic and financial coordination remains the centerpiece of each summit’s agenda, but issues such as the future of work, climate change, and global health are recurring focuses as well. Broader agendas became more common in the decade following the 2008 global financial crisis, when the G20 was able to turn its attention beyond acute economic crisis management. But at recent summits, countries have struggled to reach a unified consensus—the hallmark of previous repetitions of the conference—as the interests of high- and low-income economies continue to diverge. The COVID-19 pandemic posed a major test for the group for largely failing to move beyond “uncoordinated national policies.” However, G20 countries did agree to suspend debt payments owed to them by some of the world’s poorest countries, providing billions of dollars in relief. Although climate change has been a focus of recent summits, meetings have yielded few concrete commitments on the issue. At the 2021 Rome summit, countries agreed to curb emissions of methane and end public financing for most new coal power plants overseas, but they said nothing about limiting coal use domestically. (China, the world’s largest emitter, permitted more domestic coal power plants in 2022 than any year since 2015). At the 2022 gathering, Indonesia agreed to close coal power plants in exchange for $20 billion in financing from high-income countries, including the United States. But as of 2023, it is still building coal-fired plants. As the 2023 host, India has framed the agenda around issues facing lower-income countries in the so called Global South. These include rising debt levels, persistently high inflation, 2 depreciating local currencies, food insecurity, and increasing severe weather events associated with climate change. However, none of the ministerial meetings that precede the G20 leaders’ summit has produced a joint communiqué, which prior to the war was a staple of such meetings. With Russian President Vladimir Putin absent at the 2022 summit in Indonesia, leaders issued a joint declaration deploring the “aggression by the Russian Federation against Ukraine.” Putin has again skipped the August 2023 G20 at New Delhi. Chinese President Xi Jinping also skipped the Summit, their places were taken up by Russian foreign minister Sergey Lavrov and Chinese premier Li Qiang, respectively. How G20 Works:  The G20 Presidency steers the G20 agenda for one year and hosts the Summit. The G20 consists of two parallel tracks: the Finance Track and the Sherpa Track. (Sherpas are personal representatives of the leader of member countries. They work behind the scenes and formulate the agenda for the G20 Summit).  Finance Ministers and Central Bank Governors lead the Finance Track while Sherpas lead the Sherpa Track after Finance Track.  The G20 process from the Sherpa side is coordinated by the Sherpas of member countries, who are personal emissaries of the Leaders. Finance Track is led by Finance Ministers and Central Bank Governors of the member countries. Within the two tracks, there are thematically oriented working groups in which representatives from the relevant ministries of the members as well as from invited/guest countries and various international organizations participate. The Finance Track is mainly led by the Ministry of Finance. These working groups meet regularly throughout the term of each Presidency. The Sherpas oversee negotiations over the course of the year, discussing agenda items for the Summit and coordinating the substantive work of the G20.  In addition, there are Engagement Groups which bring together civil societies, parliamentarians, think tanks, women, youth, labour, businesses and researchers of the G20 countries.  The Group does not have a permanent secretariat. The Presidency is supported by the Troika – previous, current and incoming Presidency. During India’s Presidency, the troika will comprise Indonesia, India and Brazil, respectively. 3 India's G20 Priorities: Green Development, Climate Finance & LiFE:  India's focus on climate change, with a particular emphasis on climate finance and technology, as well as ensuring just energy transitions for developing countries.  Introduction of the LiFE movement, which promotes environmentally conscious practices and is based on India's sustainable traditions. Accelerated, Inclusive & Resilient Growth:  Focus on areas that have the potential to bring structural transformation, including supporting small and medium-sized enterprises in global trade, promoting labour rights and welfare, addressing the global skills gap, and building inclusive agricultural value chains and food systems. Accelerating Progress on SDGs:  Recommitment to achieving the targets set out in the 2030 Agenda for Sustainable Development, with a particular focus on addressing the impact of the COVID-19 pandemic. Technological Transformation & Digital Public Infrastructure:  Promotion of a human-centric approach to technology and increased knowledge-sharing in areas such as digital public infrastructure, financial inclusion, and tech-enabled development in sectors such as agriculture and education. Multilateral Institutions for the 21st century:  Efforts to reform multilateralism and create a more accountable, inclusive, and representative international system that is fit for addressing 21st century challenges. Women-led Development:  Emphasis on inclusive growth and development, with a focus on women empowerment and representation in order to boost socio-economic development and the achievement of SDGs. Challenges Before G20:  Geopolitical tensions, heightened by the Russian invasion of Ukraine but also spurred by strategic competition between China and the United States, have increasingly threatened cooperation. 4  In the United States, bipartisan legislative efforts have aimed to deny Russia standing in the World Trade Organization (WTO) and other international institutions. Russia’s participation in the G20 has grown contentious, with some Western countries seeking to exclude Moscow, though members including China and Brazil have opposed that idea.  G20 members economic shocks disproportionately affecting emerging economies. The energy crisis resulting from the war in Ukraine has led to food scarcity and soaring energy prices, as well as inflationary pressures that have engendered a stronger U.S. dollar at the expense of depreciating currencies in emerging economies. As a result, more countries are turning to international lenders for bailouts; over one hundred countries have requested emergency assistance from the International Monetary Fund (IMF) since the beginning of the pandemic.  IMF lending to distressed economies soared to a record high of $140 billion in 2022. The G20 introduced a common framework for debt treatment ahead of its 2020 summit, but only four countries—Chad, Ethiopia, Ghana, and Zambia—have requested debt relief under the framework. Experts blame divisions between lender countries.  Russia recently suspended participation in the Black Sea Grain Initiative, contributing to food insecurity and increasing worries among G20 developing countries. When the G20 finance ministers summit earlier this year proposed paragraphs that stated the Ukraine conflict was causing “immense human suffering” and “exacerbating existing fragilities in the global economy.” China and Russia blocked them.  France has already publicly refused to sign any joint statement that does not condemn Russia’s invasion of Ukraine in the same way that the 2022 Bali statement did.  The United States indications from India that dealing with the Russians will not be business as usual.  The group’s long-standing commitment to an international order based on WTO principles of reducing tariffs and other trade barriers has in recent years collided with growing economic competition between great powers. 5  Strict export controls that restricted China’s ability to buy certain chips made anywhere in the world with U.S. inputs, and an outbound screening regime prohibiting some U.S. investments in Chinese sensitive technology sectors. Recently, China banned iPhones.  Friction within the group regarding climate change. China, India, Russia, and Saudi Arabia reportedly blocked an agreement on phasing out coal use and fossil fuel subsidies at a July 2021 meeting of environment ministers. And following the invasion of Ukraine, Germany and other G20 countries have reneged on previous promises to stop financing fossil fuel projects overseas. Conclusions of G20 New Delhi Summit 2023: Deep Divisions:  Leaders of the world's 20 big economies ended a summit in the Indian capital on Sunday overcoming deep divisions over the war in Ukraine to produce a consensus document and move forward on issues such overhauling institutions like the World Bank.  They also formally admitted the African Union to the bloc to make the grouping more representative. Softer Language On Ukraine War:  G20 nations agreed that states cannot grab territory by force and highlighted the suffering of the people of Ukraine, but avoided direct criticism of Russia for the war. The declaration was seen as an apparent softening from the position that the G20 took last year when it condemned Russia for the war and demanded that it withdraw from Ukraine.  Diplomats said Russia would never have accepted an outright condemnation and that it was still a successful outcome because everyone including Russia committed themselves to not seizing territory by force.  Host India along with Brazil, Indonesia and South Africa, played a key role in avoiding a fracturing of the G20 over the Ukraine conflict reflecting the growing power of the Global South developing nations in the group. 6 African Union Inside the Club:  The 55-member African Union was formally made permanent member of the G20, on par with the European Union, in order to make the grouping more representative. Until now only South Africa was a member of the G20. The entry of the AU would provide greater voice to the Global South within the G20 where the G7 countries have long played a dominant role.  The move also came after the BRICs, another group dominated by China and Russia, was expanded to include Saudi Arabia and Iran among other nations which was seen as an attempt by Beijing to make it a possible alternate to the G20. U.S., Saudi, India Join Hands for Transport Corridor:  Leaders of the United States, India and Saudi Arabia among others announced plans to set up rail and ports links between the Middle East and South Asia and eventually to Europe which U.S. President Joe Biden said was a "real big deal."  The Biden administration is seeking to counter China's Belt and Road push on global infrastructure by pitching Washington as an alternative partner and investor for developing countries at the G20 grouping.  But there were no details about financing or a time frame for the project that involved laying down railway lines in the Middle East and then connecting them to India by port. Incremental Progress On Climate Change:  The G20 leaders agreed to pursue tripling renewable energy capacity globally by 2030 and accepted the need to phase-down unabated coal power, but stopped short of setting major climate goals.  The group did not provide any plan to amend existing policies and targets in order to achieve the target of ramping of renewables. It also said $4 trillion a 7 year would be needed to pay for a green energy transition but did not lay out any pathway to it.  The deliberations of the G20 were being closely watched ahead of the COP28 (Conference of the Parties of the United Nations Frame work Convention on Climate Change 28th Conference) U.N climate summit in the United Arab Emirates later this year. Modi Boosts Standing as India’s Big Moment Arrives:  For Indian Prime Minister Narendra Modi, the leadership of the G20 has been a year-long opportunity to showcase India as an influential diplomatic and economic power, and drive investment and trade flows into the world's most populous country.  It has also provided him with a platform to boost his standing at home as he seeks a third term in office in elections in the next several months. Modi's image has been on G20 billboards across the capital and in the vast and swanky new conference venue. To his supporters the successful outcome of the summit showed India's big moment had arrived. References: 1. G20 summit in New Delhi: How the global media views the event. https://thefederal.com/category/analysis/g20-summit-in-new-delhi-how-the global-media-views-the-event-95872?infinitescroll=1 2. G20 Summit, New Delhi. 3. https://www.g20.org/en/g20-india-2023/new-delhi-summit 4. G20 New Delhi Summit Summary. https://www.mofa.go.jp/ecm/ec/page1e_000768.html 5. What is the G20 and what are the key issues for the 2023 Delhi summit? https://www.reuters.com/world/what-is-g20-what-are-key-issues-2023 summit-2023-09-04 6. Key takeaways from the 2023 G20 summit in New Delhi. https://www.reuters.com/world/key-takeaways-2023-g20-summit-new delhi-2023-09-10 G20 Summit 2023 Outcome’s: Delhi Declaration, Guest List.https://www.nalandaopenuniversity.com/g20-summit-2023-schedule venue-dates 8 7. Was the G20 Summit a Turning Point for the Global South? https://www.cfr.org/councilofcouncils/global-memos/was-g20-summit turning-point-global-south 8. G20 Finance Ministers Meeting in India Ends Without Consensus. https://www.voanews.com/a/g20-finance-ministers-meeting-in-india-ends without-consensus/7186148.html#:~:text=share ,G20%20Finance%20Ministers%20Meeting%20in%20India%20Ends%20W ithout%20Consensus,-July%2018%2C%202023 9. France won't sign G20 communique unless it strongly condemns Russia. https://www.reuters.com/world/europe/french-finance-minister-says-g20 must-condemn-russia-ukraine-war-2023-02 24/#:~:text=France%20won%27t%20sign%20G20%20communique%20unl ess%20it%20strongly%20condemns%20Russia 10. Delhi G20 summit confirms isolation of Russia, Macron says. https://www.reuters.com/world/europe/french-finance-minister-says-g20- must-condemn- russia-ukraine-war-2023-02-24/ 9