EDITORIAL ANALYSIS: A multilateral platform in a polarized world

Source: The Hindu, Economic times

• Prelims: Current events of international importance, G20, G7 etc.
• Mains GS Paper II: Significance of G20 countries, Bilateral, regional and global grouping and agreements involving India or affecting India’s interests.

ARTICLE HIGHLIGHTS

• The G20 Foreign Ministers’ Meeting (FMM) on 7—8 July 2022 was hosted at Bali, Indonesia. Indonesia is the current President of G20.
• The summit ended with no joint statement, and no announcements of any agreements being reached.
• The 17th G20 Heads of State and Government Summit is happening in November in Bali. After Indonesia, India will assume the presidency of G20 from December 2022.

INSIGHTS ON THE ISSUE

Context

G20:

• The G20 is an informal group of 19 countries and the European Union, with representatives of the International Monetary Fund and the World Bank.
• The G20 membership comprises a mix of the world’s largest advanced and emerging economies, representing about two-thirds of the world’s population, 85% of global gross domestic product, 80% of global investment and over 75% of global trade.

Origin:

• 1997-1999 ASIAN Financial Crisis: This was a ministerial-level forum which emerged after G7 invited both developed and developing economies. The finance ministers and central bank governors began meeting in 1999.
• Amid the 2008 Financial Crisis the world saw the need for a new consensus building at the highest political level. It was decided that the G20 leaders would begin meeting once annually.
• To help prepare these summits, the G20 finance ministers and central bank governors continue to meet on their own twice a year.
• They meet at the same time as the International Monetary Fund and The World Bank.

How does the G20 Works?

• The working of G20 is divided into two tracks:
  • The finance track: It comprises all meetings with G20 finance ministers and central bank governors and their deputies.
    • Meeting several times throughout the year they focus on monetary and fiscal issues, financial regulations, etc.
  • The Sherpa track: It focuses on broader issues such as political engagement, anti-corruption, development, energy, etc.
    • Each G20 country is represented by its Sherpa; who plans, guides, implements, etc. on behalf of the leader of their respective country.

Structure and Functioning of G20:

• The G20 Presidency rotates annually according to a system that ensures a regional balance over time.
• For the selection of the presidency, the 19 countries are divided into 5 groups, each having no more than 4 countries. The presidency rotates between each group.
• Every year the G20 selects a country from another group to be president.
  • India is in Group 2 which also has Russia, South Africa, and Turkey.
• The G20 does not have a permanent secretariat or Headquarters. Instead, the G20 president is responsible for bringing together the G20 agenda in consultation with other members and in response to developments in the global economy.
• TROIKA: Every year when a new country takes on the presidency, it works hand in hand with the previous presidency and the next presidency and this is collectively known as TROIKA. This ensures continuity and consistency of the group’s agenda.

The work of G20 members is supported by several international organizations:

• They provide policy advice.
• These organizations include:
  • The Financial Stability Board (FSB). The FSB, which was established by G20 leaders following the onset of the global financial crisis,
  • The International Labour Organization (ILO).
  • The International Monetary Fund (IMF).
  • The Organization for Economic Co-operation and Development (OECD)
  • United Nations (UN)
  • World Bank
  • The World Trade Organization (WTO)

Key Highlights of the meet:

• Two important sessions held:

1. First Session: The first session was held on strengthening multilateralism.
   1. It explored joint actions to strengthen global collaboration and foster mutual trust among countries.
   2. It was aimed at creating an enabling environment that will support world stability, peace, and development.
2. Second Session: The second session was on the Food and Energy crisis.
   1. It discussed strategic actions to combat food insecurity, fertilizer shortage, and rising global commodity prices

• It Called for an end to the war and grain blockade in Ukraine:
  • G20 foreign ministers called for an end to the war and grain blockade in Ukraine.
  • The forum was the first face-to-face meeting between Russia and the fiercest critics of its war.
• Differences within the G-20 grouping was visible
  • The meetings indicated the emerging differences within the G-20 grouping.
  • Russia accused the United States of forcing Europe and the rest of the world to abandon cheap energy sources.
  • The U.S. blamed Moscow for global food insecurity.
• The Ukraine war and its economic fallouts are hinting at a division within the ranks of the global grouping.
• The S., EU, Japan, Canada, Australia and France are increasingly forming one anti-Russia block. While the rest of the countries prefer a cautious approach asking for peaceful resolution of the war in Ukraine.

India at G20:

• India was represented by the EAM, Dr. S. Jaishankar at the G20 Foreign Ministers’ Meeting.
• India as a troika member
  • India is a G20 troika member and as the incoming G20 Presidency, India’s role in this summit assumed greater importance.
  • The Troika of G20 consists of the current (Indonesia), previous (Italy) and incoming (India) G20 Presidencies.
  • India will assume the G20 Presidency on 1 December 2022 from Indonesia.
  • It will convene the G20 Leaders’ Summit for the first time in India in 2023.
• New Sherpa nominated
  • Former NITI Aayog CEO Amitabh Kant has been picked as India’s new Sherpa for the G-20.
  • The Sherpa engages in planning, negotiation and implementation tasks through the Summit.
  • He replaced Piyush Goyal, Minister for Commerce & Industry and Consumer Affairs, who was appointed as the G-20 Sherpa in September 2021.
• Bilateral meeting with US and Russian Foreign ministers: On the side-lines of the summit, EAM held discussions on regional and global issues in bilateral meetings with his US and Russian counterparts.
• He also met the Foreign Minister of China and called for an early resolution of all the outstanding issues along the LAC in Eastern Ladakh.

Present global challenges that need to be addressed:

Implications for India to establish the International Institute for Regulatory Development (IIRD):

• Establishment of IIRD: This is an opportunity to initiate the reshaping of the global regulatory construct through the establishment of an International Institute for Regulatory Development (IIRD).
• India can be a torchbearer for a new regulatory framework: It provides an opportunity to ‘tropicalise’ regulations and regulatory framework. While the Bretton Woods institutions had their origin in the US and Europe, India could be the torchbearer for the new regulatory architecture, of which the IIRD would be the lynchpin.
• Collective assessment: IIRD would be a forum where regulators, global institutions, systemically important market players, multilaterals and governments can collectively assess risks and new market opportunities.
• Regulatory standards and benchmarks for technologies: IIRD would have the vision and mission of devising regulatory standards and benchmarks for emerging and frontier technologies, facilitating and enhancing inter-regulatory coordination and information sharing
• Assessment of global and local risks:It can assess collective risks arising globally and locally from excessive leverage, poor valuation, liquidity mismatch and creating a forum for public consultation, for drafting of international regulations and improving public participation by emerging economies.
• Public-private and multilateral funding: IIRD could be funded through a combination of public, private and multilateral resources, housed in India and populated with exceptional talent from India and across the world.
• Deployment of technologies: It will deploy technology itself, including regulatory technology (RegTech) and supervisory technology (SupTech) and the best technology for training, skilling, data sharing and dissemination.

 Way Forward

• As a founding member of the G20, India has used the platform to raise issues of vital importance and those that impact on the most vulnerable around the world.
• G20 needs leaders with impeccable global credentials. With India to assume the Presidency in Dec 2022, it has the opportunity to restore the world’s faith in multilateralism.
• The G20 must strengthen the partnership with international organizations such as the IMF, the OECD, the WHO, the World Bank and the WTO, and delegate them the task of monitoring progress.
• Upcoming G20 meet is an opportunity for India to initiate the reshaping of the global regulatory construct through the establishment of an International Institute for Regulatory Development (IIRD). India can be a torchbearer for a new regulatory framework.
• The bigger challenges, however, will remain for India to assist Indonesia in protecting the idea of the G20 and keeping it from fragmentation in the face of geopolitical fissures, where leaders are loath to hear each other speak, or even sit in the sameroom together.

QUESTION FOR PRACTICE

1. The long sustained image of India as a leader of the oppressed and marginalized nations has disappeared on account of its new found role in the emerging global order.’ Elaborate(UPSC 2019)

(200 WORDS, 10 MARKS)