Do not be in a hurry to cancel the G20: it kept its promises, although under pressure
The wordy and ambitious “Rome Declaration” was adopted on October 31 after five days of extensive negotiations at the conclusion of the 16th G20 summit. Prime Minister Narendra Modi led the Indian delegation and played a proactive role in shaping its program and outcomes. India would now be part of the G20 troika on December 1, 2021 as the host country for the 2023 summit.
Just as the anti-G20 voices became more strident, the group once again kept their word. It took a Herculean effort to endorse and pass the important OECD (Organization for Economic Co-operation and Development) agreement on the global minimum corporate tax to close a glaring loophole happily exploited by multinational giants, by guaranteeing profits in a subsidiary in a tax haven. Significantly, 136 out of 140 countries have agreed, with reservations in some cases, to introduce a corporate tax of at least 15% as of January 1, 2023.
Despite fierce criticism, the amount of the tax is reasonable and fair. The fact that it is implemented by countries representing 90% of global GDP itself demonstrates its urgent need. This would increase GDP growth between 0.2 and 0.9 percent all at once (IMF Blog) and would be particularly beneficial for emerging economies like India. It should be noted that Prime Minister Modi had been a strong advocate for reform and encouraged it during his very first outing to the G20 summit in 2014. President Biden hailed it as “diplomacy reshaping our global economy and in the service of our people â.
Pitch from PM to G20
The theme of the summit was âPeople Planet and Prosperityâ and mainly focused on recovery from the pandemic, reviving economic growth, climate action, sustainable development, health and nutrition. In one of the landmark results, developing countries led by India were once again able to include and reiterate the principle of common but differentiated responsibilities in the Declaration. Which puts the onus on the developed world as chief polluter to do the heavy lifting, including providing at least $ 100 billion annually through 2025. Surprisingly, Afghanistan has found no mention of it. in the Declaration despite an extraordinary meeting of G20 leaders on Afghanistan convened on October 12, 2021.
Regarding the COVID pandemic, the Prime Minister referred to his vision of âOne Earth – One Healthâ implying that no country was an island or immune from the scourge. He emphasized cooperation for a steady supply of raw materials and prompt WHO approval of vaccines made in India. The fact that India was following the rhetoric was evident in its announcement that national capacity had been increased to produce 5 billion doses by 2022. In its intervention at the âGlobal Supply Chain Resilience Summitâ convened by the President Biden, Prime Minister Modi spoke in a similar speech. chorus.
PM Modi announced a series of climate change mitigation measures to significantly reduce GHG (greenhouse gas) emissions in India. He criticized the developed world for failing to do âclimate justiceâ and for not allocating adequate resources to the development of green technologies that can help developing countries switch to energy efficient options.
READ ALSO | COP26: With the developed world not doing its part, India’s case for climate justice is strong
A lively reception
While the G20 summit is important in itself, the formal and informal interactions between heads of state and government on its fringes are equally significant. Between Rome and Glasgow, Modi would have interacted with virtually all of the major world leaders present. Diplomats came up with colorful phrases to describe these conversations – out of the way, out of the way, by the fireside and now also âconversations by the fountain,â as leaders gleefully gathered for a photo of. family at the iconic Trevi Fountain in Rome.
Images of President Biden engaged in conversation with an arm around the neck of the Prime Minister or French President Macron engaging him in a bear hug (Covid-19 or not) have their own story to tell. The affection and warmth that most world leaders radiate towards PM Modi is exceptional. While all leaders are uncompromising and very concerned with national interests, personal chemistry makes a difference and crucial to that. After all, they are also humans, sensitive to the emotions and perceptions that affect their decisions. President Nixon’s aversion to Mrs. Gandhi led him to command the 7th Fleet in the Bay of Bengal during the Indo-Pakistani conflict of 1971. President Bush’s penchant for Manmohan Singh pulled India out of nuclear cold.
For Pope Francis to abandon his usual reserve, embrace Modi like a longtime friend, extend the audience to one hour against the 20 minutes provided and willingly accept his invitation to visit India would have been a bitter remedy for the ‘professional’ India-bashers, both at home and abroad, to swallow.
Not to mention the enthusiastic welcome that the Indian diaspora extended to the Prime Minister in Rome! Many of them had traveled overnight to see the Prime Minister. “He renames the name of India,” remarked one of his admirers.
An Indian leader is not remembered enjoying rock star popularity among the Indian diaspora over the past decades. The same phenomenon is occurring in India with 70 percent of the population having a favorable opinion of the Prime Minister, the highest among the 13 world leaders polled in a survey conducted by Morning Consult in early September, which is in its eighth year in office. .
The future of the G20
Overall, the first leg of the PM tour was action-packed and productive.
But what about the future of the G20?
Although it is the most democratic and representative body dedicated to harmonizing the fiscal and economic policies of 19 of the world’s largest economies, the task is daunting. A complicating factor is that emerging economies do not have a similar experience with advanced economies when it comes to collaboration. Second, emerging economies have not been very adept at advancing their development agenda which is at odds with the priorities of advanced economies. Third, advanced economies have failed to demonstrate the political will to reform the Bretton Woods institutions, despite pledging to do so. There is no reason to continue the convention of an American at the head of the World Bank and a European at the IMF.
All the same, with all its weaknesses, the G20 is the best institution the world has today. Instead of throwing out the baby with the bathwater, the need now is to invest more in the group to develop a cooperative habit. The G20 has shown that it can deliver under pressure or in a crisis. Why not in normal times? There are no easy answers!
The author is a former envoy to South Korea and Canada and official spokesperson for the Ministry of Foreign Affairs. The opinions expressed in this article are those of the author and do not represent the position of this publication.
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