The G20 Presidency: An Economic Boon for India

By Aman Kayal (Editor-In-Chief)

You might have often come across the term ‘G20 Presidency’. But have you ever wondered what it means for India and how will it benefit economically?

G20 was formed in 1999 as a forum for finance ministers and central bank governors to address issues related to the global economy after the financial crisis of the 1990s. From 2007 onwards, G20 started including heads of states and governors as well and played a crucial role in restoring economic growth after the 2008 global financial crisis. G20 comprises 19 countries and the European Union which represents nearly 80% of the world Gross Domestic Product (GDP). The G20 countries together represent 75% of the international trade and 60% of the world’s population cumulatively. Over time it has expanded its focus on climate change, migration and sustainable development. The union does not have a permanent secretariat and the presidency is supported by the Troika, the previous, current and incoming presidency. The troika will comprise Indonesia, India and Brazil respectively.

The G20 does not have a permanent secretariat and one country takes over the presidency each year. In 2024, India will hand over the presidency to Brazil. During its presidency, India will hold 200+ meetings across 50 cities and states. The 18th G20 Summit will take place on the 9th-10th September, 2023 in New Delhi. It will be a culmination of all the meetings and processes that will be held throughout the year.

The G20 is split into two tracks:

– The Finance Track: This track would be led by finance ministers and central bank governors of member counties.

– Sherpa Track: The Sherpa track would be led by personal emissaries of leaders of member countries. The former IAS officer, Amitabh Kant will be India’s Sherpa who has led Niti Aayog for 6 years.

The former foreign secretary, Harsh V Shringla has been appointed as India’s chief G20 Coordinator at the secretary level. Under his leadership, India has successfully accomplished ‘Vande Bharat Mission’, ‘Operation Devi Shakti’ and ‘Operation Ganga.’ The responsibilities of the G20 secretariat would include implementation of overall policy decisions and arrangements needed for steering India’s presidency.

What does the G20 Presidency mean for India?

The G20 Presidency doesn’t come with a formal power but it is a responsibility and an opportunity for India to emerge as a leader by solving major problems that the world faces today.

According to PM Narendra Modi, the G20 presidency will be inclusive, ambitious and action oriented. Primarily, India will be focussing on attaining global stability and macroeconomic coordination. The primary focus will be to bring sustainable development in accordance with climate , finance, technology transfer and emission reductions due to historically high consumption patterns. India will be looking to prioritise more on Digital transformation in coming years. 

Under India’s presidency, G20 will focus on solving major challenges such as the slowing global economy, poverty due to COVID-19 pandemic, debt crisis and climate crisis. Moreover, G20 nations’ agenda for 2023 also includes reforms in institutions such as the World Bank, World Trade Organization and the International Monetary Fund. The central motto for India’s G20 is ‘One Earth, One Family, One Future.’ This was announced by our Prime Minister Narendra Modi who shared India’s vision of uniting the whole world together for a better future, while also highlighting the fact that India understands and has close relations with both developed and developing nations.

International trade and investment supports the world economy and development. The G20 policy decisions in this area have a strong impact on global growth, international trade and investment flows, and their organisation into global and regional value chains. In addition, G20 members account for 70% of aid for trade flows and around the same share of global foreign direct investment (FDI) outflows. G20 co-operation has been critical, as the global economic crisis marked a structural shift in the relationship between global growth and international trade and investment trends. 

Food security and nutrition are persistent global concerns. The 2030 Agenda reflects the critical role of the global food and agriculture system in producing safe and nutritious food to meet a growing demand, contributing to the sustainable management of natural resources, adapting and mitigating climate change, and generating employment opportunities and incomes. G20 members’ domestic actions have a significant impact on global food security and nutrition. The G20 has also contributed to global progress on food security through a number of initiatives and collective actions. Food security, productivity and sustainability have been at the core of successive G20 Agriculture Ministers’ declarations and the adoption of the G20 Food Security and Nutrition Framework. In recent years, particular emphasis has been put on the sustainable use of natural resources. Some G20 initiatives aimed at enhancing agricultural productivity include Agricultural Market Information System, G20 Framework for Analysing Policies to Improve Agricultural Productivity Growth Sustainably, Group on Earth Observations Global Agricultural Monitoring Initiative, etc.

Infrastructure is at the forefront of the G20’s work to strengthen the structural foundations of global growth and make it more sustainable while minimising adverse impacts. G20 aims to improve the infrastructure by working to support structural reforms to facilitate regional connectivity in developing countries and identify exemplary infrastructure projects, reform of multilateral organisations to strengthen engagement in public-private partnerships (PPPs), project preparation facilities and multilateral development bank (MDB) balance sheet optimisation, working on development finance and the mobilisation of private finance (e.g. PPPs, private-sector instruments and blended finance) and engagement of institutional investors for long term investment, governance of infrastructure and diversification of financial instruments including  improving data availability and transparency on infrastructure investment through the planned international organisations’ Infrastructure Data Initiative. The G20 aligned its goal with the 2030 Agenda to reduce to less than 3% the cost of remittances and to eliminate remittance corridors with costs higher than 5%. Achieving this goal would, at a minimum, generate an extra $25 billion per year by 2030. The G20’s work on the international financial architecture is well aligned with the 2030 Agenda, which calls for strengthening the voice and participation of developing countries in global international economic and financial institutions. 

The world is confronting a deep and fast-paced technological transformation that requires people to be equipped with the right skills for a digital and technology intensive economy. At the same time, increased human longevity and the rapidly changing nature of work increase the demand for access to adult learning. Training and education systems have to be upgraded and adapted to provide the right tools and transferable skills throughout life; from initial education and certification to professional training and lifelong learning opportunities and also by reskilling and up-skilling. Furthermore, despite significant progress in access to education globally, developing countries continue to face challenges that deserve specific attention. Responding to this challenge, the G20 has placed increasing emphasis on the following global policy priorities for collective actions like promoting more and better-quality jobs, through an integrated approach to achieve full and productive employment and high-quality work for all, supporting human resource development through education, quality apprenticeships and training to enhance vocational skills development and lifelong learning, increasing the inclusiveness of labour markets by closing the gender gap, reducing the number of young people left behind and also identifying solutions for groups with particular needs, such as children in the first years of their lives, rural youth in developing countries, and women and girls. The G20’s actions in these areas are contributing to progress across the 2030 Agenda. The G20 is continuing work towards its target to narrow the gender gap in labour force participation by 25% by 2025 in G20 members. 

The implementation of the 2030 Agenda for Sustainable Development offers an opportunity not just to achieve the sustainable development goals but also to contribute to progress on a wide range of goals, as well as to achieve basic human rights. The G20’s strong focus on gender equality and women’s empowerment can be traced back to its 2014 commitment to reduce the gender gap in labour force participation. Innovation is a key driver of sustainable development: it drives productivity, which in turn is central in fostering growth; it affects the availability of more affordable products and services; but it can also impact inequality via its influences on the demand for labour and on competition and concentration in the economy. In many developing countries, productivity levels have remained low and stagnant for decades and in some regions even declining, reflecting a difficulty in moving from a growth model driven by the expansion of physical factors of production to one driven by innovation. The 2030 Action Plan sets out directions for the G20 on innovation, including: (a) enhancing synergy and cooperation in national innovation systems and building dynamic innovation ecosystems; (b) intensifying cooperation in creating a global environment that facilitates lawful access to science and technology, promoting voluntary knowledge sharing, and exchange of good practice; (c) supporting the United Nations Technology Facilitation Mechanism for enhanced co-operation on technology; (d) emphasising open trade and investment regimes to facilitate innovation, including through IPR protection and enforcement; and (e) facilitating innovation, new industrial revolution and the digital economy with special attention to low income and developing countries, to ensure that no one is left behind.

India will have an action-oriented and development-oriented presidency striving for a rules-based global order promoting international peace and advocating for just and equitable growth in a sustainable, holistic and inclusive manner. To culminate the priorities that India wishes to achieve by the end of 2023 include Global health infrastructure, health financing and digitization of service delivery; Digital public infrastructure and tech enabled development in education, Livelihoods Disaster resilience; Fight against economic crime; Reform of Multilateral Organizations; Leveraging the Blue economy; Climate Financing and the Green Hydrogen Mission, Accelerated pace of Sustainable Development Goals (SDGs) implementation, Energy security and transitions and finally Women’s empowerment without any gender discrimination. The motto of ‘Vasudhaiva Kutumbakam’ can be satisfied if we work together, and feasible and mindful decisions, at individual and public levels prompt more educated and extraordinary activities worldwide, adding to a cleaner, greener and bluer future.

References

About G20. (n.d.). G20. Retrieved January 16, 2023, from https://www.g20.org/en/about-g20/#overview

The Group of Twenty (G20). (2022, December 16). National Portal of India. Retrieved January 16, 2023, from https://www.india.gov.in/spotlight/group-twenty-g20

Reddy, K. (2022, December 22). India’s 2047 goals will guide G20 presidency. Hindustan Times. Retrieved January 16, 2023, from https://www.hindustantimes.com/opinion/indias-2047-goals-will-guide-g20-presidency-101671722854902.html

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