By Manish Chand
Call it the Power of 20. It’s the world’s most powerful economic club, bringing together 20 most developed and emerging economies in the world, spread across five continents. The G20 comprises around 90 per cent of the global GDP, 80 per cent of the world trade and more than two-third of the world’s population. Six years and eight summits later, it’s a high moment for G20 as the leaders of the world’s premier economic forum gather for their 9th summit in Brisbane, the picturesque gateway to Australia, November 15-16.
The Brisbane summit is set to be perhaps the most substantive one as it would seek to fructify some of key initiatives that have been in the making for some time and coalesce global efforts to achieve an additional 2 per cent growth that is expected to inject $2 trillion into the global GDP and create millions of new jobs and viable employment opportunities around the world.
India’s core priorities
With India’s economy growing at a fast clip and armed with a solid majority in parliament, all eyes will be on India’s reform-minded Prime Minister Narendra Modi as he attends his first G20 summit in Australia. India has an ambitious multi-pronged agenda for the G20 summit that ranges from deploying global surpluses for infrastructure development and inclusive development to energy efficiency and global action to mitigate ebola. Topping the list is lifting the global economic growth by 2 per cent – the overarching goal of the Brisbane summit -- and blending growth with sustainable development and job creation.
Ahead of his trip, Prime Minister Modi has pithily encapsulated India’s core goals at the G20 summit as "global economic growth and stability, stable financial markets and global trading regimes and employment generation.” He has also underlined India’s development priorities and enlisted the global support for accelerating "the creation of next generation infrastructure, which also includes digital infrastructure, and ensure access to clean and affordable energy.” He is also expected to highlight the importance of international cooperation against black money.
Inclusive Development and Infrastructure
Many issues will be competing for the mindspace of the world leaders. Promoting inclusive development agenda and enhanced infrastructure investment will be a top priority for India at the G20 summit. With Prime Minister Modi looking to re-make India as a manufacturing powerhouse and an economic dynamo, he is expected to renew the call to the world to ‘Make in India.” For the new dispensation in Delhi, enlisting global partnerships for infrastructure upgrade in New Delhi is not just an economic priority, but also a core foreign policy priority as the Indian prime minister has consistently emphasised on infrastructure development in all his interactions and summit meetings with foreign leaders.
This time around, with the leaders of the world’s leading economies gathered on the same platform, he is expected to make a robust pitch for attracting more investment for infrastructure development in India as well as in the developing world. In India’s assessment, infrastructure investment is crucial to lifting global growth. India has also stressed that the quantity as well as quality of infrastructure development is equally important. In this context, the concretisation of a Global Infrastructure Initiative (GII) at the Brisbane summit could be critical. "The GII will be designed to complement the work of international development banks and the initiatives in member countries, such as India's recently-announced 'PPP (Public-Private Partnership) in India'. A mechanism to implement specific elements of the GII will be announced in Brisbane,” says Patrick Suckling, Australia’s High Commissioner to India.
Reducing the cost of remittances will be another key priority for New Delhi. This is also an issue close to Prime Minister Modi’s heart as his government has made the welfare of the 25-million strong Indian diaspora spread across continents a core focus issue of the country’s foreign policy. The leaders of G20 countries are aware that India is the single largest recipient of global remittances, and therefore a consensual decision on reducing transaction costs matters a lot to India. There is clearly a lot at stake for India here: even 1 per cent reduction in costs of remittances would mean an additional flow of $700 million for India (at the current rate of $71 billion remittances). Besides, this is the hard-earned money of Indian workers who toil hard in difficult conditions in foreign lands, and send their savings back home, a point stressed eloquently by Mr Prabhu in his pre-summit briefing. "Many of our friends from Kerala, many of our friends who work in more than 50 degree centigrade. They work hard, send the money back to India which supports the Indian economy significantly because that reduces the gap of Current Account Deficit,” he said. India’s target is to reduce cost of remittances cost from 10 per cent to 5 per cent. "It is very ethical, logical, and very important that why should a worker who is working there should pay a bulk part of his money in order to remit money back home, just because the banking system does not operate in a proper manner,” he added.
Revamping global tax regime
India is also going to be proactive in pushing a global regime for automatic sharing of information between tax authorities to help identify and fix tax-evaders by 2017-2018. The Brisbane summit is also expected to agree to a revamped tax regime for multinationals, including global e-commerce giants who avoid paying taxes by hiding behind intricate corporate structures. India would be quick to welcome the new tax regime as it has been relentlessly pushing for transparency in the international taxation system.
Promoting energy security and energy efficiency will also be high on India’s agenda, with India expected to press for a dialogue on global gas markets and strong collective action on climate change. At the G20, India is expected to push for adopting measures that discourage wasteful energy consumption. In its pursuit of clean and green growth, India is demanding strong action on climate change within the framework of the United Nations Framework Convention on Climate Change (UNFCCC), based on the principle of common but differentiated responsibility of developed and developed countries. India will also be advocating a change in global energy mix with greater emphasis on renewables and focus on mitigation to climate change.
Reforming global financial architecture
Most important, the perennially elusive quest of fashioning a democratic global financial architecture, which reflects the 21st century realities and the tectonic shift of economic gravity from the west to the east, is expected to see a renewed push at the Brisbane summit. One can expect India’s prime minister to make a strong pitch for spurring the reform of the global financial institutions, asking the advanced economies to honour their long-overdue promise to implement the 2010 IMF quota and governance reforms. "The post-Cold War global economic governance order needs to be recast. It will be a major priority for India at the G20 summit in Brisbane,” says Pinak Ranjan Chakravarty, former secretary (economic affairs), Ministry of External Affairs, India.
The Way Ahead
In the end, the G20 process is about balancing competing interests and setting global rules of economic engagement. Born in the crucible of the 2008 global economic crisis, the G20’s agenda has moved beyond crisis management to enhanced global macroeconomic coordination to create a new equilibrium and resilience in global economy. In the scrambled alphabet of global geopolitics, the G20 finally seems to be getting the script right.
Across the summits, India, Asia’s third largest economy, has emerged as a fine balancer, delicately blending its national interests with the imperatives of global economic integration. With upbeat projections about India’s economic growth in the years come, expect India to contribute substantially to global economic growth and be a more proactive player in shaping the G20 process. Against the backdrop of an uneven global economic growth, marked by stark asymmetries across geographies it makes sense for the world to be on the side of the India story and global economic resurgence.
(Manish Chand is Editor-in-Chief of India Writes Network, www.indiawrites.org, a portal and e-journal focused on international affairs and the India Story)
- The views expressed in this article are solely those of the author.
Australia G20 website:
Transcript of Prime Minister’s on-board briefing en route from St. Petersburg G20 Summit
G20: Bridging hope deficit and reviving world economy
Transcript of Media Briefing on forthcoming G20 Summit (November 6, 2014)
G-20 Leaders' Declaration G-20 Leaders' Declaration (889KB)