Passing on the G20 Presidency Baton: From Indonesia to India
What is the G20?
The Group of Twenty (G20) is the premier forum for international cooperation on the most important issues of the global economic and financial agenda consisting of 19 countries and the European Union. Because of its size and strategic importance, the G20 has a crucial role in setting the path for the future of global economic growth.
The G20 was formed in 1999 with the aim of discussing policies, in order to achieve international financial stability. This forum was formed as an effort to find a solution to the global economic conditions hit by the global financial crisis in 1997-1999. Following the global financial crisis in 2008, the urgent need for a meeting of the G20 at the leaders’ level emerged. For the first time in November 2008 in Washington D.C., G20 Leaders convened and coordinated fiscal, monetary and economic policies and set the global economy on a path to recovery. Since then, the G20 has organically evolved into a unique international forum to address long-term structural challenges.
Objectives of G20
Through the G20 forum, member countries aim to achieve the following:
- Policy coordination among themselves in order to achieve global economic stability, sustainable growth;
- Promote financial regulations that reduce risks and prevent future financial crises;
- Modernise international financial architecture.
The G20 Structure
The G20 brings together leaders, finance ministers and central bank governors from 19 countries like Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, and the United States of America, plus the European Union, represented by the President of the European Council and by the Head of the European Central Bank.
Together, the G20 countries represent 80% of global GDP, 75% of international trade and two-thirds of the world’s population.
The presidency of the G20 rotates annually among its members. The presidency leads a three-member management group of previous, current and future chairs, referred to as the Troika, the purpose of which is to ensure transparency, fairness, and continuity from one presidency to another. The G20 does not have a secretariat of its own. A temporary secretariat is set up by the country that holds the presidency for the term of chairmanship.
Apart from the Leaders’ Summit which crowns the presidency, the ongoing work is divided into two tracks; the Sherpa Track and the Finance Track, which continue throughout the year.
Each country has a Sherpa, one who coordinates other official meetings and working groups. The Sherpa track has twelve workstreams: anti-corruption, agriculture, culture, development, digital economy, employment, environment and climate, education, energy transition, health, trade and investment, and tourism.
The Finance Track deals with economic issues through meetings of finance ministers and central bank governors. It has eight workstreams, namely: global macroeconomic policies, infrastructure financing, international financial architecture, sustainable finance, financial inclusion, health finance, international taxation, and financial sector reforms.
There are also Engagement Groups – 20 each from business, civil society, labour, parliament, science, supreme audit institutions, think tanks, urban development groups, women and youth. The two most important from the point of view of policies are the Think 20 and the Business 20.
Overview of Indonesian Presidency
In October 2021, Indonesia was handed over the G20 Presidency by Italy, at the G20 Rome Summit, 2021. On the backdrop of the Covid-19 health emergency and global economic crises set off by it, Indonesia’s theme during its presidency was “Recover Together, Recover Stronger”, to create an inclusive and sustainable foundation for growth.
Understanding the challenges and the need for collective action, Indonesia focused on three main pillars during its tenure, namely: global health architecture, sustainable energy transition, and digital transformation.
Global health architecture involves deliberations towards strengthening global health resilience and making the global health system more inclusive, equitable, and responsive to crises. Sustainable energy transition discussions have focused on ways to accelerate the transition towards cleaner energy sources. In particular, since any such transition requires substantial investments, the efforts have been focused on finding a platform for such investments. Digital transformation involves deliberations centered on achieving the full potential of rapid digitalisation of the global economy by creating a new landscape of cooperation among nations.
Through these pillars, Indonesia took the lead on ensuring equitable access to COVID-19 vaccines, promoting sustainable and inclusive economic development through MSMEs participation and digital economy, while also maintaining the aspiration to continue to improve the collective capacity in securing the shared prosperity among nations, through various reform efforts in global taxation, stronger cooperation in fighting corruption, deepening of infrastructure financing, and pushing for a more democratic, and representative international cooperation.
Key Takeaways from the G20 Bali Summit
The Indonesian Presidency concluded at the G20 Bali Summit in November, 2022. The summit was hosted by Indonesia and attended by the participant countries, nine guest countries and ten international organisations. Here are some key takeaways from the summit:
- The leaders adopted a declaration deploring Russia’s aggression in Ukraine “in the strongest terms” and demanding its unconditional withdrawal. They also recognised that while most members condemned the war in Ukraine, “there were other views and different assessments of the situation and sanctions”, the declaration stated.
- G20 communique echoed PM Modi’s message to Russian President, Vladimir Putin, underlining that “Today’s era must not be of war.” This, according to Indian officials, was an outcome of a constructive, cooperative, and consensus-building approach adopted by India, which helped bridge the gap between Russia and Western countries led by the US.
- American President Joe Biden and Chinese President Xi Jinping met on the sidelines of G20, their first in-person conversation as leaders of their two countries. The leaders talked for three hours when the ties between the countries have been strained, and their post-meeting comments are seen as an incremental step towards rebuilding the fractured relationship. Taiwan dominated their discussion, and in their readouts of the meetings, both leaders urged “peace and stability” in the Taiwan region.
- The G20 leaders in their declaration agreed to pace interest rate rises carefully to avoid spillovers and warned of “increased volatility” in currency moves. With the Ukraine war, as well as massive pandemic-era spending packages blamed for fuelling inflation, the G20 countries said further fiscal stimulus measures should be “temporary and targeted”.
- India’s Prime Minister Modi and Chinese President Xi met at dinner hosted by the Indonesian President Widodo. In their first public meeting since the India-China border standoff began in 2020, PM Modi and President Xi shook hands and spoke to each other.
- India was handed the G20 Presidency. This will be the first time the country will be holding an international summit of this scale. At the closing session of the summit, PM Modi told the G20 leaders that India’s presidency will be “inclusive, ambitious, decisive, and action-oriented.”
India and the G20
India has been actively involved in the G20 preparatory process both at the Sherpas Track and at the Financial Track since its inception. India’s agenda at the G20 summits is driven by the need to bring in greater inclusivity in the financial system, to avoid protectionist tendencies and above all, ensure that growth prospects of developing countries do not suffer. India has worked to maintain the dynamism and credibility of G20 deliberations for establishing a framework for strong, sustainable and balanced growth, strengthening international financial regulatory systems, reforming Bretton Woods’s institutions, facilitating trade finance, and pushing forward the Doha agenda. India remains committed to the G20 process for achieving a stable, inclusive and representative global economic and financial system.
With the Presidency baton being passed onto India, on the backdrop of issues such as food security, the looming energy crisis, and geo-political tensions, which aspects of socio-economic growth and development is India willing to focus on?
India’s theme for its G20 Presidency is “One Earth, One Family, One One Future”, commonly known as Vasudhaiva Kutumbakam. India’s agenda will closely align with those of the last three presidencies of Indonesia, Italy and Saudi Arabia, namely global health security, energy and environment, and digital governance.
“India will work with other G20 members to address serious issues of debt, of economic growth, food and energy security and particularly of the environment. The reform of governance of multilateral financial institutions will continue to be one of our core priorities”, said External Affairs Minister S Jaishankar.
India is also readying to push for global consensus on maintaining stable supply chains for food and fertilisers to build food security globally, and for stable supplies of energy. Another important agenda might be the challenges of technology transfer, specifically that of Unified Payment Interface (UPI), a homegrown payments system, to other countries. Attention will be paid to closing the digital divide at the international level.
Additionally, it is likely that the agenda may include the issue of terror financing, especially when “new kinds of technology are being used for terror financing and recruitment.” Prime Minister Modi, while addressing the “No Money for Terror” conference 2022, said that, “Challenges from the dark net, private currencies and more are emerging. There is a need for a uniform understanding of new finance technologies… From a uniform understanding, a uniform system of checks, balances and regulations can emerge.” This hints at India’s willingness to unite the world on coming up with ways to keep a check on terror financing, which may be taken up during its G20 Presidency.
What has India planned?
Starting December 1, 2022, India will begin its G20 Presidency, during which it is set to chair over 200 meetings in 32 different sectors that aim to secure global economic growth and prosperity. These meetings are said to take place at 50 locations – covering every state and union territory, culminating in a two-day summit at New Delhi in September, 2023.
While its priorities have not been confirmed yet, it is expected that they would revolve around inclusive, equitable, and sustainable growth, LiFE (Lifestyle For Environment), women’s empowerment, digital public infrastructure and tech-enabled development in areas ranging from agriculture to multilateral reforms.
With regards to these priorities, India set the ball rolling even before taking over as the G20 President. Highlighting India’s efforts in the field of sustainable development, the Prime Minister said, “We have to make sustainable development a part of individual LiFE, rather than just a system of governments. The environment is a global cause for us as well as personal responsibility.” He also highlighted the contribution of Ayurveda and noted global enthusiasm for Yoga and coarse grains.
The Prime Minister said that many of India’s achievements in aspects like digital technology in development, removal of corruption, improving ease of living, can be used as templates by other countries of the world. The Prime Minister also highlighted India’s women empowerment and women-led development and financial inclusion through the Jan Dhan Yojana which will reach the world through the opportunity of the G-20 presidency.
On matters related to climate change, India has also joined the Mangrove Alliance for Climate (MAC), a joint initiative of Indonesia, the UAE, Sri Lanka and Spain, which seeks to educate and spread awareness worldwide on the role of mangroves in curbing global warming and its potential as a solution for climate change.
Emphasising the need for proper use of technology, Prime Minister Modi at the closing session of the G-20 summit in Bali said, “Proper use of digital technologies can become a force multiplier in the decades-long global fight against poverty. Digital solutions can be helpful in the fight against climate change as we saw in examples of remote-working and paperless offices during Covid”.
The world’s eyes are on India as it is set to begin its G20 Presidency. Having gained traction in recent years as a powerful and emerging economy, the world looks at it as a powerful leader of the Global South. The G20 Presidency places a great responsibility on India’s shoulders to chart a path of long-term economic growth and stability, against the backdrop of supply-chain disruptions, food and energy security, rising cost of living and rapid climate change.