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Economic Highlights
New Delhi, 11 September 2023
MBDs, DPI, Biofuels
G20 OPENS UP MANY DOORS
By Shivaji Sarkar
The G20 year-long India presidency bash achieves a lot amid
global Ukraine-Russia conflict overshadowing the bid for peace. India’s
bilaterals with the US, neighbours and Indian Ocean partners Mauritius and
neighbour Bangladesh clinch many issues. The G20 has sealed many pacts on
digital payments, debt, multilateral development banks, crypto currency, One
Future Alliance (OFA), biofuels alliance and a greater push to sustainable
development goals (SDGs) since November 2022 at 220 meetings spread across 60
cities in 28 States.
India has included Bangladesh, Egypt, Mauritius, the
Netherlands, Nigeria, Oman, Singapore and UAE as the guest countries. It also
insists that Africa is given special treatment as well. This is an Indian
overreach to give a new dimension to global discussions.
The summit sums it up with bridging divides, breaking
barriers, sowing seeds of collaboration in a world where unity prevails over
discord, says Prime Minister Narendra Modi as he connects G20 to ASEAN meet
being held in Malayasia.
Addressing a press conference on Friday, Economic Affairs Secretary
Ajay Seth said India’s G20 Presidency, which focused on supporting “inclusive”
and “sustainable” global growth, held several “rich and intense” discussions
with members on strengthening MDBs (multilateral development banks.)There is a general consensus on four key
financial matters – including the Global South in industrial economies’ growth
strategies, restructuring MDBs for inclusive global growth, leveraging digital
technology for societal development and exploring potential of new technology
for common good.
At the same time, the country has shown a finesse of holding
and spreading G20 meets in remote areas and exposing people to the grand G20,
an effective extension of G7 and its multinationals. India has steered a global
developmental agenda.
The grand operations were allocated Rs 990 crore for the bid
to bring a new world economic order. While the budget for direct expenses
related to the presidency has been presented, the government has also spent
money on preparation of New Delhi for the grand summit. Over Rs 4,100 crore was
spent on Delhi in the lead up to the G20 summit, according to a document posted
by Union Minister Meenakshi Lekhi on X. As per the document, the cost was
incurred by Delhi and Central government agencies. Closures of core area
markets for smoothening security also has cost the local business, trade bodies
say.
According to the report, the money was spent on roads,
security, footpaths and lighting, among several other things. Several
sculptures have also been installed at various places in the national capital
as part of the makeover process. Other direct costs related to the event being
held in Delhi have not been revealed so far. In many cases the State
governments also spent to spruce up the meet venues on their home turf.
Such summits bring in benefits as well open up doors of
multinational corporations to increase their footprints as well.The Non-Aligned
Movement (NAM) and Commonwealth Heads of Government (CHOGM) meets held in New
Delhi also had a cost. The Asiad Games and Commonwealth Games and several other
international conferences have given India the expertise to hold mega shows
over decades, starting from 1951 Asiad Games.
A key achievement of the G20 summit is to see the emergence
of an India-led multilateral and multi-stake holder institution dedicated to
taking India experience of digital public infrastructure (DPI) global, called
the One Future Alliance (OFA). The OFA will be the third major international
institution to be pioneered by India under Modi.
It also paves the way for a Global Biofuels Alliance, a
multi-system low carbon pathway. The Union Cabinet approved it and it is being
considered a major takeaway of the summit. This will open up sharing of best
bio-fuel practices.
The others are International Solar Alliance and the
Coalition of Disaster Resilient Infrastructure. The OFA, if succeeds, will aim
at building capacity, provide funding, offer technical assistance and synergise
global efforts in the domain of DPI. It will be supported a new Global DPI
Depository, a virtual and voluntary bank of DPI initiatives of G20 members. The
headquarters may just be in India. The DPI and the G20 Financial Inclusion
Action Plan 2024-26 will play a crucial role in enabling progress towards SDG,
a key United Nations objective.
The other area of convergence is around the regulation of
crypto currency and its assets. The crypto currency has huge risks as
highlighted by the International Monetary Fund (IMF) and Financial Stability
Board. The IMF-FSB underlined macroeconomic risks has now laid down a
comprehensive road maps on crypto asset regulation.
All of it is an outcome of the 27 meetings, including four
ministerial meetings across 12 States and two Union Territories, hosting 3000
delegates. The summit has assembled over 30,000 delegates, official entourage,
business participants and 3000 journalists covering the programme from across
the globe. Indeed, a mega show.
Another major achievement is to shake up the multilateral
development bank (MDB) for the 21st century. This is based on the
work of an expert group led by US Treasury Secretary Lawrence Summers and
Indian 15th Finance Commission chair NK Singh. The group submitted
its first report in July 2023 in Gandhinagar. It will give its second report in
Marrakesh in October. The debt management mechanism like that of Sri Lanka,
Gambia, and Ghana has also been discussed. However, China is opposed to it.
The G20 has worked out a broad consensus around the issue of
climate finance and enhancing the role of MDBs. A related issue pertains to
setting up a G20 Technical Assistance Action Plan (TAAP) and the
recommendations made to overcome data-related barriers to climate investments
in a transitional world. It was originally termed as climate transition.
Saudi Arabia objected to it and it was simplified to transition.
Despite Russia’s objection, G20 has agreed to express
concern over macroeconomic consequences of food and energy requirements. This
hits the low-income countries (LIC) the most.
Consensus has not been easy. Brazil and South Africa helped
India forge a text in the last minute negotiations where Russia and China took
tough stands. The Indian presidency would be remembered for enshrining G20 with
its stamp of a compassionate voice for poor nations, particularly the Global
South.
As Foreign Secretary Vinay Kwatra said, “It’s a fact that
industrial economy comes from vastly different economic base, social base, and
the Global South comes from a different economic base. But this is not to say
that the priorities, interests and the concerns of the Global South are not
relevant in the context of the G20…If anything, they are perhaps, central to
the effective functioning and successful outcome”. The years ahead would unfold
the benefits the world has because of India.---INFA
(Copyright, India News & Feature
Alliance)
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