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Business News/ Opinion / Columns/  The G20 summit is over but the hard work begins now

The G20 summit is over but the hard work begins now

Overcoming hurdles related to trade and China’s sway in Africa are challenges yet to be faced

A big achievement was the inclusion of the African Union (AU) as a permanent G20 member, which helps burnish India’s claim as a true representative of the Global South. (HT_PRINT)Premium
A big achievement was the inclusion of the African Union (AU) as a permanent G20 member, which helps burnish India’s claim as a true representative of the Global South. (HT_PRINT)

It’s over, bar the shouting. The headline for India’s G20 presidency will undoubtedly be a consensus forged among fractious global leaders. This was in addition to successfully aligning the summit agenda with the Global South’s interests, which included, among other things, re-focusing attention on the indebtedness that has afflicted poor and developing nations after the pandemic. The Indian presidency’s extraordinary achievements will now have to be followed up with equally exceptional steps to dispel doubts that G20 commitments rarely translate into action.

The Indian presidency’s crowning moment was the unexpected but unanimous acceptance of a Leaders’ Declaration, that too a day in advance. This was achieved with sophisticated, deft deployment of words that speak but do not tell. The Leopard-2 tank in the room—the Russia-Ukraine war—threatened to derail consensus; however, the wording of the final text, which departs from the Bali declaration, not only had the West’s approval, but also assuaged Russian and Chinese concerns. The other big achievement was the inclusion of the African Union (AU) as a permanent G20 member, which helps burnish India’s claim as a true representative of the Global South. This inclusion was overdue and it’s to the Indian leadership’s credit for pushing it over the line. There are other notable commitments as well, including a new gas-to-digital supply chain spanning India, West Asia and Europe.

Once the post-summit celebrations are over, it might be necessary to think about some of the challenges that might arise from the G20 declaration. This becomes even more pressing when considering the view of John James Kirton, professor emeritus and founder of the G20 Research Group at the University of Toronto: “Most of the commitments were weak, with G20 leaders promising to keep doing what they have already committed to do."

Two issues need immediate attention.

The first relates to the movement of people as part of trade agreements. The Declaration states: “…well-integrated and adequately skilled workers benefit origin and destination countries alike and (we) commit to working towards ensuring well-managed, regular and skills-based migration pathways." But people movement seems to be holding up the UK trade deal. India’s ambassador in London, Vikram Doraiswami, went public recently to pacify UK’s anti-immigration lobbies (tied umbilically to the Rishi Sunak government) and to re-emphasize nuances in India’s demand for visas, intended to serve as a placatory gesture. Doraiswami’s statement raises concerns whether India is walking back from its stated position on movement of professionals, which is now part of the New Delhi G20 Declaration also, in its eagerness to conclude the trade deal. India has been dogged in its opposition to the developed world’s barriers on movement of professionals, otherwise known as Mode-4 services exports under the General Agreement on Trade in Services. This might be India’s moment to take advantage of the G20 momentum.

The second issue relates to the AU’s admission to the club. It will be interesting to see how this plays out because it is individual countries, and not the AU, which are members of important global platforms such as the World Trade Organisation (WTO). The WTO is important because India’s stand at the trade body, despite being frequently aligned with the interests of many African nations, has found few supporters. Often, African support for India was sacrificed at the altar of curious trade deals with the West. The AU inclusion now provides India with additional bragging rights in the continent.

This becomes doubly urgent in the light of China’s incursions in the continent and the sovereign indebtedness it has spawned in pursuit of the Belt and Road Initiative (BRI). Michael Bennon and Francis Fukuyama write in Foreign Affairs that many African countries have been seeking loans from multilateral and bilateral lenders in their quest to wriggle out of the BRI-focused debt trap. This might be an opportune moment for India to revive its instrument for economic diplomacy: project-linked bilateral lines of credit, which are more recipient-friendly in design. Its performance has been underwhelming so far, but the AU platform should be able to provide India with a head-start. The G20 has time till the 2024 Brazil summit to follow up on the Delhi commitments, including operationalizing the new trade route.

But beyond its global remit, the 2023 G20 summit also has a domestic fallout. The Indian presidency was able to take a staid, solemn (and usually boring) summit to the masses by holding over 200 meetings in 60 different towns and cities across India. Prime Minister Narendra Modi credited this to his government’s belief in bipartisanship and cooperative federalism. Many opposition leaders have, however, been accusing New Delhi of increasingly centralizing power. The veracity of the government’s claims will be tested by November-end from two Constitution-mandated developments: who it appoints as chairman of the Sixteenth Finance Commission and the panel’s terms of reference. In the true spirit of cooperative federalism, if the states are to be genuinely treated as critical partners in the country’s growth regardless of their political disposition, a lot will depend on how the Commission finalizes the sharing of resources and revenues between the Centre and states.

Rajrishi Singhal is a policy consultant and a senior journalist. His Twitter handle is @rajrishisinghal.

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Published: 10 Sep 2023, 08:48 PM IST
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