India's G20 Presidency: Here's why the timing is perfect

On December 7, precisely 200 kites flew above the historic Kumbhalgarh Fort, when the participants of the G20 Sherpas meeting—from the 20 economies of the G20, nine guest countries and 14 international organisations—came visiting after finishing three days of marathon meetings 84 km away in Udaipur, Rajasthan. The kites symbolised the 200 meetings that the G20 group of nations would engage in, in 50 cities across India during the country’s year-long presidency that started on December 1. As Amitabh Kant, India’s G20 Sherpa, noted during his opening remarks on December 4: “This is a unique forum of both developed world and emerging economies, so we need to build approaches to benefit the world on key global issues.”

Indeed, the mix of 19 countries and the European Union (see chart) brings greater hope that this group could generate some real outcomes. “G20’s significance lies in its diversity of nations being grouped together as against, say, G7, which is a grouping of developed economies. G20 gives a voice to the Global South (regions within Latin America, Asia, Africa, and Oceania), and member nations together account for more than 60 per cent of the global population,” says Neeraj Bansal, Partner at KPMG in India. “Thereby, the group is in a more effective position to implement financial inclusion and ensure inclusive global growth.”

At the head of a group that represents around 85 per cent of the world’s GDP and over 75 per cent of global trade, India will steer the 200 meetings in multiple challenge areas through various working groups of ministers, secretaries, central bank governors, international organisations, along with several engagement groups involving parliamentarians, think tanks, women, youth, labour, businesses and researchers of all these countries.

That makes for a potent mix of not just countries, but also a diversity of voices that will be heard and debated. So, what are the areas that could form the focal areas of India’s presidency, especially in light of noises being made of focussing on the so-called Global South? “While it would be beneficial for India to prioritise themes from developing countries’ perspectives, India chose its mantra to be ‘One Earth, One Family, One Future’ to pave a path for global welfare,” says Ajit Pai, Lead Strategy Partner, Government & Public Sector and Strategy & Transactions at EY India. “Besides prioritising developing countries’ issues, it will be important to focus on key global issues of critical priority to all which will ensure effective coordination and positive outcomes.”

Three critical issues of global priority were outlined by Gita Gopinath, First Deputy Managing Director of the IMF, in a video posted on Twitter on December 14: “The first is in the area of debt. We have a large number of low-income countries that are in debt distress, and while we have the G20 common framework to help with that resolution, we absolutely need to improve the strength of the mechanism to get much more timely resolution.” The second and third areas, Gopinath said, were in the areas of internationally agreed upon standards for regulation such as in crypto, and climate finance, where developing countries would need much higher financing to adapt to climate change and contribute to climate change mitigation.

There’s a bit of hope in the air about the presidency being held by India, a country that is showing positive economic growth at a time of global macro crisis, a nation that helped smaller countries during the Covid-19 crisis with its vaccine diplomacy (some countries like Jamaica publicly expressed gratitude for the help they received), and the very nature of the independent stance taken by the country in a crisis like the Russia-Ukraine conflict. EY’s Pai points out that the world has set its eyes on India’s G20 leadership to find consensus on actions needed to promote an inclusive and sustainable global economic recovery. “The challenges now being known gives us greater opportunity to address them, if not ameliorate them, in designing and propelling forward the agenda, while pushing for meaningful outcomes that the world desperately needs,” he says.

KPMG’s Bansal points out that by chairing a group of the world’s most important countries, India is in a position to influence global issues and deliberations. There has been much talk about financing developing countries against climate change impact, but the promises have remained largely unfulfilled. Bansal says: “India is in a position to leverage the G20 presidency to build pressure on the developed world for not living up to its pledge of hitting $100 billion in climate finance a year to developing countries by 2020.”

Building influence aside, the sheer reach of the G20 meetings across 50 cities of India gives the country the opportunity to build its image as a soft power. India would hope that the bewildering variety of cultures across these cities, the strength of its knowledge economy and multiple investment areas in the country would attract significant, positive collateral benefits. “This also gives rise to a unique opportunity for India where the country can showcase its diverse culture, thereby proving to be an attractive destination for business, investments and tourism. This also enables India to build its soft power incrementally on a global platform,” says Bansal of KPMG.

By the time the next heads of state meeting happens on September 9 and before handing over the baton to Brazil for the 2024 presidency, India would surely want to draw upon its strengths in multiple areas, not least in terms of building a resilient economy that can manage inflation and GDP growth challenges at a time when the world is looking for answers. As Pai of EY says: “India will aim to leave behind a strong legacy from its rich democracy, collective decision-making approach and citizen-centric governance model. India has championed the use of technology to create digital public goods that are open, inclusive and inter-operable.” If India can help the world learn from these successes and replicate them, its presidency of G20 could help calm the world.

@alokeshb