On 28th June, 1919, Maharaja Ganga Singh, a member of the Imperial War Cabinet, was in the Hall of Mirrors to sign the Treaty of Versailles that finally brought the end to a 4-year war which destroyed the world. Little did he and other signatories know, the same peace treaty would form the basis for one of the most destructive wars 20 years later. To believe 20 of the most powerful entities that make up 80% of GDP, 75% of trade, and 60% of the population of the entire world, sitting in a single room would mean a better future, is a farce. Yes, it is the G20, and the only reason the G20 seems to be making a lot of noise in international circles is the Ukraine conflict. The G20 is one of the very few organisations of which the US and Russia are a part. The global economy still reels from the aftermath of the COVID-19 pandemic. It was immediately bombarded by the conflict, destroying global supply chains. At this juncture, India takes over the presidency of G20. The question is if the G20 will deliver for the world- but there is no definite answer. The ruling party of India and Narendra Modi would hope it succeeds in this highly crucial year before the big 2024 election.
What is the G20?
On 27th January, 2008, many world leaders and the G20 offered their condolences to Indonesia for the demise of Suharto, the longest-serving president of Indonesia, who ruled the country with an iron fist for 32 years. But the irony here is that the same leader’s economic policies, the fall of the Indonesian Ringgit and the Thai Baht[1] all led to the Asian Financial Crisis[2], and eventually the formation of G20. Later the 2008 financial crisis upgraded it to a leadership summit. Right from its founding, the G20 has been widely appreciated for delivering on the economy and trade issues– the main reason for its formation.
Does the G20 matter?
If not for the Ukraine conflict, the G20 would have never been the buzzword it is now in the international diplomatic community and think tanks. To be precise, the G20 is no security alliance or an organisation that legally binds member countries to enact the resolutions passed at the summit. It is an organisation that sits at the table and solves their common problems, and at most advises each other to make better laws helpful to all.
What probably matters most is what happens on the sidelines of the summit. All the heads of the countries would majorly focus on one-on-one interactions, with their counterparts signing trade deals, some solving security issues and others improving their diplomatic relations. In conclusion, whether on the sidelines or as one organisation, G20 does matter and is very important for the world economy, trade and finances.
What’s for India from the G20 Presidency?
The theme for India’s presidency this year is “Vasudhaiva Kutumbakam”[3] translating to “One Earth, One Family, One Future”. The goals of India, which are aligned with the G20 theme, are what it wants to achieve through its presidency. One of the major takeaways has been the talk of the Global South and India as a torchbearer for it, willing and ready to take forward their issues. With the troika of G20 (previous, present, and succeeding presidents of the G20) consisting of countries from the Global South (Indonesia, India, Brazil), only fate can decide what India can achieve for itself and the Global South to cement its position as its leader. The other pivotal move would be to bring World Peace and Inclusive Development as a part of the agenda under its leadership. Apart from the goals and motives of its presidency, which are not of much value, India would like to focus on a few key issues.
Russia-Ukraine Conflict
The pivot around which the entire G20 conference is going to revolve is the Ukraine conflict. As Prime Minister Narendra Modi stated, “This is not an era of war”, India would definitely try to broker a peace deal or at least find some middle ground, though it looks hugely impossible. But India will have to take a shot, and if by any chance it is successful, the world will have a sigh of relief from the soaring inflation and shattered global supply chains. By achieving such a feat, it will truly cement India as the emerging world power it wants to be. However, External Affairs Minister Jaishankar and PM Modi would know what is the probability of achieving something that monumental.
Debt Restructuring
The finances of many countries around the world have been hit hard due to the COVID-19 pandemic. Many have even defaulted on repayment of their loans, as we have seen in our immediate neighbourhood in Sri Lanka and Pakistan. Keeping in mind the financial and economic distress it causes, and the implications it has if further worsened, it can lead to migrant overflow. The G20 under India would push for either a complete set-off or at least a restructuring of the debt of the poor countries[4].
In the recently held Finance Ministers’ meeting in Bangalore[5], there was talk about debt restructuring, but it didn’t lead to any quality outcome due to the differences between the two biggest lenders, i.e., China and World Bank. The latter is funded by Western countries, mainly the US. China infamously lends a lot of money at very high interest rates. Once a country defaults, it will take its ports, roads and other infrastructure. The Chinese don’t lend money as a last resort to help others, but to build heavy infrastructure projects which are worthless and are of no use to the countries they are building for. The Chinese have agreed to not set off loans but prolong the due date but they have put forth a condition that the West should take the first step in setting off loans. It is very shrewd of the Chinese to ask of this and the West will definitely not buy it. It will only result in more distress for the resource-hit countries.
Food Security
Russia and Ukraine combined supply more than a quarter of wheat to the world, a major staple diet for most of the planet[6]. The conflict between the two countries led to acute wheat shortage because of the destroyed global supply chains, and this is where India sees its brightest answer: millets. In fact, India made the UN announce the year 2023 as the International Year of Millets. India is a major producer of millet and has all the answers to the wheat shortage problem. Millets with high nutritional value, produced using less water, and a smaller carbon footprint compared to wheat will be the perfect substitute for it. India will leave no stone unturned to push forward their millet case. We have seen this drive in the recent budget presented by Nirmala Sitharaman, calling millets ‘Sree Anna’.[7]
Global Trade
The other big problem G20 would be worried about is China and how the entire global supply chain is overly dependent on it. Scepticism around China is growing day by day. India, the fastest developing economy with the G20 presidency under its belt, would push for its most prominent opportunity: the idea of the China-plus-one factor[8]. The China-plus-one factor is the idea of finding an alternative to China and solving the over-dependence of the global supply chain on China. This is probably where India must and will put their entire might into play to put forward their case.
Bridge the Digital Divide
In spite of being a heavily uneducated country according to the digital framework, India has its own success story. This would be one of those issues where India, instead of projecting what it wants to provide, must project what it has already provided. India's highly successful UPI model and the JAM trinity will showcase to the world what it is capable of. UPI, through which India does most of its day-to-day transactions, could be a game changer for many other countries too. The JAM (Jan Dhan Account, Aadhar Card, and Mobile Network) trinity is how the Indian government does the world’s biggest Direct Benefit Transfer (DBT) schemes. The JAM trinity is highly successful, with zero corruption and no middlemen. India will present its model to other countries for their own DBT schemes. [9]
De-Dollarization of the World
Even if not pushed by India but through China or Russia would be about how using its influence, the US has militarised the Dollar. The perfect example of this is the recent Ukraine conflict and how Russian bank accounts in the US were frozen. With even Russia starting to use the Chinese Yuan in trade with countries other than China, both of them will push the Yuan, or probably even the prospective BRICS currency, as an alternative to the Dollar. This would be one of those issues that India should stay as far away from because India would never want someone standing head-to-head at its border, and as a double whammy, theirs being the dominating currency. India should stay far away from the idea of a BRICS currency as well. The sum of the GDPs of the four other BRICS countries will not eclipse the towering China. It will leave these nations at the mercy of the Chinese. [10]
Can the G20 deliver?
Twenty countries sitting in a room might not give us the desired result we want. The G20 is no perfect organisation- it is more of a group divided by differences rather than a collective that backs and supports all members. The perfect example is that there has been no group photo from the recent Finance or External Affairs Ministries meetings, let alone from the leadership summit in Bali last year. To make matters worse, no joint communique was released for these meetings, as is the unwritten norm for any international grouping or organisation. The G20 is in such a mess that a country’s most important ally and the arch-rival share the same stage. In some cases, both of them are each other’s closest allies. For instance, one of India’s closest allies, Russia, and India’s biggest security threat, China, are both part of the G20 and are very close allies. Different camps are supporting different countries and it doesn’t mean all the supporting countries are on the same page. India and China are both close allies of Russia, but these two countries wouldn’t even come close to each other. France and the USA are on the same page on Russia, but not China- a recent statement by Macron claiming that the European Union should have a different, independent view on Taiwan is a testament to that. For the G20 to not do much and underdeliver for the international community isn’t their mistake, but ours to have expected. It is in this geopolitical muddle that we take over. Though India becoming the president doesn’t change the facts on the ground, if at least a joint communique is released or a group photo is captured by the end of the summit, it will be considered a success.
Implications on Domestic Politics
Whether the G20 under India will deliver for the international community or not is a different aspect because irrespective of its result, it will definitely deliver for Narendra Modi and that is what he wants. Does Modi want a successful G20 or a successful 2024? Of course, he wants a resounding third straight general election victory and nothing else is more important than that for him. Geopolitics is nothing but domestic politics is paramount for politicians. India will do what is best for its own interests, as does the USA or any other country. It is the political benefit that it offers to those leaders that matters. Being a superpower, the USA has done more harm than good to a few countries but that does not stop other nations from striving to become a superpower. Just imagine, 6 months before the general election, all world leaders will be around Modi, with him being the centre of attraction and praising him and his governance. This is what Modi and Amit Shah would want right before the election. Modi, if he wins 2024, would become only the second person after Nehru to win 3 straight general elections. He will most probably be the first Indian Prime Minister to complete 3 straight full terms. India will become G20 president again after 20 years and it will be the president of other organisations too, but if Modi wins 2024, he will be one of very few to achieve what he had even in the near future in Indian domestic politics.
Though Maharaja Ganga Singh signed the Treaty of Versailles, it was of no use. Even if Modi doesn't deliver the joint communique of the G20 in 2023, it doesn’t matter as all he needs to do is present India as a ‘Vishwaguru’ and project himself as its leader. Six months down the line, the desired outcome he needs will be realised.
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