As India prepares itself for G20 Presidency in 2022, it is important for the country to articulate its position based on research and consultations and its needs and requirements
The G20 Saudi Arabia Presidency comes at a difficult time when the world is suffering from one of the worst health disasters leading to slowdown in economic growth and trade.
Today, the global economy is facing loss of lives and livelihood, and rising healthcare, social and economic costs, were not even perceived when G20 was first conceived to bring economies out of the financial crisis. The global growth is projected at negative 4.9% in 2020 by the IMF. The UNCTAD and OECD forecast that global FDI flows will decrease by as much as 40% in 2020. The WTO projected a steep decline in world trade by up to 32%. The recent visa restrictions by the US and import restrictions by India are examples of how countries are implementing protectionist measures. Apart from these, there is growing geo-political tensions between countries such as the US and China and India and China.
The G20 members account for 85% of the global economic output, 75% of global trade, 80% of global investment and 66% of the world’s population. Thus, they are the key players in addressing the pandemic and reviving the global economy. However, their individual ability to manage pandemic within their countries vary widely. According to the WTO, the G20 economies had implemented 93 trade and trade-related measures (as of mid-May) linked to the covid-19, which primarily consisted of export restrictions. In addition, there are travel bans. Thus, the role of Saudi Arabia becomes crucial to build consensus, support countries to address the pandemic and revive growth and trade. Its partnership with India is important as economic recovery will spin off to 2021 and beyond to India’s Presidency in 2022.
Saudi Arabia has pledged $500 million to international organisations for development, manufacturing and distribution of covid-19 diagnostics, therapeutics and vaccines, and to help bridge a financial gap of around $8 million. Around $150 million has been allocated to the Coalition for Epidemic Preparedness and Innovation, $150 million to the Global Alliance for Vaccines and Innovation and $200 million to other international and regional health organisations and programmes. India with its comparative advantages in low cost and high-quality health care, R&D and technology can participate actively in such initiatives. Several Indian expatriates are in Saudi Arabia and the Kingdom has pledged to provide free covid-19 related medical care to all expatriates. In this initiative, Indian healthcare sectors can provide support through supply of medicines, PPE kits, telemedicine, and other technologies. This is also the right time for India to showcase Ayurveda and other traditional medicines with preventive properties.
At a group level, the G20 leaders have supported the launch of the ‘Access to COVID-19 Tools (ACT) Accelerator' initiative, to facilitate high level control of the pandemic in the medium-term through four pillars-- diagnostics, treatment, vaccines and health system strengthening. They have agreed to put in over $5 trillion as part of targeted fiscal and economic policy measures to reduce the adverse social, economic and financial impacts of the pandemic. The leaders have endorsed the ‘G20 Action Plan Supporting the Global Economy through the COVID-19 pandemic’ in April as the first step in formulating a collective response. One of the objectives of this Action Plan is to address debt vulnerabilities in low-income countries and enhancing co-ordination among international organisations to optimise the use of resources.
In April, the G20 nations announced a one-year debt standstill for the least developed countries. On July 18-19, the Saudi Presidency hosted a virtual talk of G20 finance ministers and central bankers to further discuss this issues and economy recovery. The G20 announced a debt service suspension initiative (DSSI), which supports a time bound suspension of principal and interest payments for eligible countries that make a formal request for debt relief from their official bilateral creditors. However, India’s role in these initiatives and its position is not available in public domain, as it is of other countries like France.
As India prepares itself for G20 Presidency in 2022, it is important for the country to articulate its position based on research and consultations and its needs and requirements. Today, it is a unique opportunity for India to work together with Saudi Arabia, a country with which it shares many common interests. Saudi Arabia has recognised India as an important strategic partner under its Vision 2030 programme, which has been aligned with India’s flagship initiatives such as ‘Make in India’, “Start-up India’, ‘Smart Cities’, and ‘Digital India’.
There is scope for collaboration and attracting more investment from the Kingdom in areas like healthcare research, healthtech, fintech, digital economic development with emphasis on areas of importance to Saudi Presidency like women and youth empowerment through digital financial inclusion. India needs to broaden its existing collaborations with the Saudi Arabia beyond energy and strategic to encompass, healthcare, technology, start-ups and empowerment of vulnerable groups like women, youth and small and medium enterprises. India also needs to focus on research-based action plans and strategies for 2022, based on inputs from its think-tanks in lines with research support provided by the think-tanks of earlier G20 Presidencies.