17 Dec

G-20/G-21

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Content

• Introduction
• Members
• Significance
• G 20 Summit: India
• India-Middle East-Europe Economic Corridor (IMEE EC)
• Global Biofuel Alliance

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Introduction

• The Group of Twenty (also known as G-20 or G20) is an international forum for the governments, finance ministers and the central bank governors from 20 major economies.
• It was founded in 1999 as an informal forum of Finance Ministers and Central Bank Governors of its members to meet annually, with the aim of studying, reviewing, and promoting high level discussion of policy issue pertaining to the promotion of international financial stability.
• Its agenda was expanded in 2008 with the inclusion of the head of government in the meet. After this first summit it replaced the G8 as the main economic council of the wealthy nations.
• G-20 in the current from is the child of 2008 global financial crisis.
• Please note that G20 is an informal grouping and thus it doesn’t have permanent secretariat/ staff. Rather, G20 presidency rotates annually among members and is responsible for bringing together the G20 agenda, organizing its workings and hosting summits.

Members

• 19 countries and EU
  • Canada, US, Mexico, Brazil, Argentina, UK, France, Germany, Italy, Turkey, South Africa, Saudi Arabia, Russia, China, India, Japan, South Korea, Indonesia and Australia.
  • EU is represented by European Commission and European Central Bank.
• Note: In the 2023 summit in Delhi, inclusion of African Union has been agreed upon.
• The UN, IMF and WB also attend G20 meet.
• Spain is a permanent guest invitee at the summit.

Objectives:

• Policy Coordination between its member countries in order to achieve global economic stability, sustainable growth.
• To Promote Financial Regulations that reduce risks and prevent future financial crisis.
• To Create a new international financial architecture.

Significance of G20

• G20 has emerged as the premier forum of international economic cooperation, a sort of mini UN, towards building an open world economy. G20 got its reputation because of its ability to restore stability in the global financial system after the 2008-09 crisis.
• Discussions and agreements at G20 help in reshaping the governance of global finance. It has enabled work towards reform of IMF, WB and United Nations as all the major world economies are represented here.
• The member countries (before addition of AU) represent 90% of the Gross World Product, 80% of the trade, 2/3rd of the World Population and approximately half of the world land area.
• When global governance in general is continuing to reflect the power equations at the end of World War – II, the G20 is a recognition of the changed realities and has given a place at the international high table to emerging powers.

2023 G20 Summit India

• India’s Presidency Theme was “Vasudhaiva Kutumbakam” which means “the world is one family”.

Key Outcomes:

• New Delhi Declaration: The G20 has adopted a consensus declaration with following highlights:
  • On Ukraine War:
    • All states must act in a manner consistent with purposes and principles of UN
      charter in its entirety.
    • They must refrain from threat or use of force to seek territorial acquisition against territorial integrity and sovereignty or political independence of any state. States must also refrain from use of or threat of use of nuclear weapons.
    • Peaceful resolution of conflicts and efforts to address crisis as well as  diplomacy and dialogue are critical.
    • “Today’s ERA must not be of war”
  • On Grain/Food/Energy Security:
    • The declaration calls on Russia and Ukraine to ensure unimpeded delivery of food and fertilizer inputs from Russia and Ukraine.
  • On Economies and Financial Market:
    • It endorses financial board’s high level recommendations for regulation , supervision and oversight of Crypto-assets, activities. Finance Ministers and central bank governors will discuss taking forward the cryptocurrency roadmap at their meeting in October.
    • Renew our commitment to ensure a level-playing field and fair competition by discouraging protectionism, market distorting practices.
  • On Climate Change:
    • Notes that there is a need to accelerate efforts to phase down unabated coal power, in line with national circumstances.
    • The declaration noted that $5.8-5.9 trillion in pre-2030 period is required by developing countries, in particular for their needs to implement their emission targets.
  • On Global Debt Vulnerability:
    • It committed to promoting resilient growth by urgently and effectively addressing debt vulnerabilities in developing countries.
  • Health: It remains committed to strengthening global health architecture.
  • Terrorism: It condemns terrorism in all its forms and manifestations, including those on the basis of xenophobia, racism, and other forms of intolerance, or in the name of religion or belief, recognizing the commitment of all religions to peace.
• Announcement of G-20 decision to include the 55-nation African Union, the second regional bloc to join the G-20 after the EU.
  • With this, the future summits in Brazil and South Africa is expected to take India’s Global South Initiative forward.
  • The move help tilt the balance within G-20 away from Power-11 of the geopolitical
    powers, the G7, Australia, the EU and the Russia and China combined to the Developing 10 (Argentina, Brazil, Mexico, African Union, South Africa, Turkey, Saudi Arabia, India, South Korea and Indonesia) who make up rest of the member.
• Finance Track of India’s G20 Presidency also paved the way for coordinated global approach to regulating cryptocurrencies, strengthening multilateral development banks’ lending capacity and replicating the use of digital public infrastructure like the India Stack to expand financial inclusion around the world.
  • Discussion on the regulation roadmap for cryptocurrencies and strengthening of developmental banks will continue in Morocco in Oct when the G-20 ministers will meet in Marrakech for the IMF and World bank autumn meeting.
• Announcement of India-Middle East – Europe Economic Corridor (IMEE EC) to strengthen economic connectivity between India-West Asia and Europe.
• Launch of Global Biofuel Alliance on the sidelines of G20 summit.

Analysis:

• Positives:
  • India’s G20 presidency was both a challenge and opportunity for India to showcase its leadership in global affairs:
    • There were several challenges – the international order is in a flux, geopolitical
      contestation has sharpened, weaknesses of existing multilateral institutions and
      the global economy is facing strong headwinds.
    • But, by forging the consensus between the G-20 nations on New Delhi Declaration, India has shown its diplomatic ability, growing clout and cordial relations on both sides of the divide.
• India has made G-20- more inclusive: What was once a summit merely for technocrats and policy wonks has become a people’s festival.
  • It was a tremendous organizational effort, with over 200 meetings in 60 cities, and association of sections of society, economy and the academic community.
• Interest of Global South has been given much higher profile in this summit.
  • India organized a Voice of Global South Summit with participation from 125 countries.
  • The inclusion of African Union was a powerful symbol of importance attached to the Global South.
• IMEE EC which was unveiled during the summit has the potential to be an effective counter, though comparatively limited in scope, to the ambitious BRI.
• The GBA was an important step towards more research and delivery of alternative energy sources for a world still dependent on fossil fuel.
• The summit also focused on Technological Transformation and Digital Public Infrastructure(DPI), thus providing India an opportunity to showcase its considerable accomplishments in these areas.

Conclusion 1:

“With its deft leadership, New Delhi has managed to put its own distinct imprimatur on the G20, making it a much more dynamic platform and in the process, India has managed to elevate its own credibility in the global order” – Harsh V Pant.

Conclusion 2:

• “As the G20 President, we had pledged to make the global table larger, ensuring every voice is heard, and every country contributes. I am positive that we have matched our pledge with actions and outcomes” – PM Narendra Modi.

India Middle East Europe Economic Corridor (IMEE EC)

• It was announced by PM Modi during the G20 Summit in India in 2023.
  • India, USA, UAE, Saudi Arabia, France, Germany, Italy and the European Union Commission have signed MoU to establish IMEE EC.
• It entails an ambitious project that could leverage railway tracks and shipping corridors to help physically link up a vast stretch of the Eurasian subcontinent and in the process improve digital connectivity and catalyze trade among countries including energy products including Green Hydrogen.
• It will consist of two separate corridors:
  • East Corridor connecting India to West Asia/ Middle East
  • Northern Corridor connecting West Asia/Middle East to Europe

i. It involves laying of a railway link through the Arabian Peninsula that could then link up with shipping passages to India and Europe on both ends.

• The initiative is jointly spearheaded by the US and India, and spans India, UAE, Saudi Arabia, Jordan, Israel, and the European Union.

Significance:

• Impetus to Economic Development: It is being positioned as a modern-day spice route which can lead to enhanced connectivity and economic integration.
• Strategic Significance: it will act as weighty ideological alternative to China’s BRI.
• Reduce dependency on Suez Canal: The use of land route in the Arabian Peninsula could mean bypassing he congested Suez Canal that cargo ships currently take. Eventually it will create a seamless corridor running all the way from Southeast Asia to Europe.

Official timelines and Funds details is yet to be announced.

Global Biofuel Alliance

• Launched during the sidelines of G-20 Summit in Delhi in 2023 by PM Modi and a host of global leaders including US President Joe Biden, Brazilian President Lula da Silva, Bangladesh PM Sheikh Hasina and Italian Prime Minister Giorgia Melon.
• Initiating members include USA, Brazil, Argentina, Italy, South Africa, Mauritius, UAE, India and Bangladesh.
  • Observer Countries: Singapore and Canada.
• Other G-20 countries have been urged to join the initiative.

The alliance is aimed at facilitating global cooperation in increasing the sustainable production and use of biofuels across the sector.

• Its focus is on strengthening market, facilitating global biofuel trade, developing concrete policy lesson-sharing and providing technical support for national biofuel program worldwide.
• Target: Take ethanol blending with petrol globally to 20%.
• The Alliance mirrors International Solar Alliance (ISA) which aims to bring clean and affordable solar energy within the reach of all.