The 17th annual G20 summit is all set to be held in Bali, Indonesia on November 15th and 16th. It will be the pinnacle of the G20 process and intense work carried out within the Ministerial Meetings, Working Groups, and Engagement Groups throughout the year. The focus of the G20 agenda is on three main priorities: the global health architecture, digital transformation, and sustainable energy transition, in addition to post-pandemic macroeconomic policies. The G20 nations have been tasked with dealing with several challenges, including a slowing global economy, with several major countries headed into a recession, increase in those living in poverty due to the COVID-19 pandemic, supply chain disruptions due to the Russia-Ukraine war and the climate crisis. Let’s take a deep dive into this year’s G20 agenda, what the upcoming presidency means for India and what the overall objectives of the G20 include.
What to watch out for in the 2022 summit?
The 2022 Bali summit will also be the first in-person meeting between the United States President Joe Biden and Chinese President Xi Jinping since Biden was elected in 2020. Prime Minister Narendra Modi will also be attending the summit, just weeks before the country will take over the G20 presidency from December 1. The Prime Minister is also expected to hold meetings with various world leaders on the sidelines of the summit. The theme of the 2022 summit is “Recover Together, Recover Stronger”, as the global economy and the world at large has been facing several challenges in all sectors due to the overall impact of the COVID-19 crisis and the war in Ukraine.
The first pillar of the 2022 G20 summit is global health architecture, including strengthening the global health system, and making sure it is more inclusive, equitable, and responsive to crises. Pandemic preparedness, including advancing transformative infrastructure post-COVID-19 will be the focus of several discussions during the summit. The summit will also bring together all nations and stakeholders to enable them to gain the benefits of rapid digitalization of the global economy. Some of the priority agenda items, including acceleration of MSMEs into the digital ecosystem, including encouraging digital entrepreneurship. The third and final agenda includes promoting the use of cleaner and greener energy sources.
What is the G20?
The Group of Twenty, or G20, is a forum for international cooperation on some of the most important aspects of the international economic and financial agenda. The members of the G20 represent 90 percent of the global gross domestic product (GDP) and 80% of the international global trade. Roughly 2/3rd of the world’s population lives in G20 member countries. The members of the G20 are: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Türkiye, the United Kingdom, the United States, and the European Union. In addition to this, each year, the presidency invites guest countries to participate. The G20 has no permanent secretariat and the presidency of the G20 rotates every year among its members, with the country that holds the presidency working together with its predecessor and successor, also known as Troika, to ensure the continuity of the agenda.
The G20 was formed in 1999 as a collection of twenty of the world’s largest economies. It was created in response to the financial crises that arose in a number of emerging economies in the 1990s and due to growing recognition of the fact that some of these countries were not adequately represented in global economic discussion and governance. It was conceived as a bloc that would bring together the most important industrialised and developing economies to discuss international economic and financial stability. The thematic agenda of the annual summit is developed through the organisation of several Ministerial Meetings, such as the Joint Meeting of Finance and Development Ministers, and the Labour, Agriculture and Tourism Ministerial meetings. Some of the other objectives of the G20, include modernising international financial structure, ensuring policy coordination, restoring global economic growth, strengthening and reforming international financial institutions while also ensuring Policy coordination between its members to help achieve global economic stability, sustainable growth. In the last few years the G20 has moved beyond a predominantly short-term crisis-management role to focus more on long-term agenda-setting, as reflected in the main themes of recent G20 Presidencies. The G20’s major achievements include strengthening the role of emerging economies, such as BRICS, reforming international financial institutions, improving discipline and tightening oversight over national financial institutions and regulators, and creating financial and organisational safety nets to prevent severe economic slumps in the future.
What will India’s upcoming presidency of the G20 mean?
India has been active in the G20 processes in both the Sherpas and finance track and its support for global cooperation, inclusive development, economic stability, and sustainable growth is in line with its national goals and the values espoused by other leaders of the G20. On 1st December 2022, India will assume the G20 presidency for the first time, and the theme will be “One Earth, One Family, One Future.”New Delhi will set the G20 agenda, organise the Leaders’ Summit, and host meetings with ministers, government officials and civil society. Some of the major agendas, issues and overarching themes that India will have to focus on as it takes over the presidency of the G20 will include providing global health goods, international finance systems and enabling a digital economy.
The uncertainty induced by the pandemic and the Russia-Ukraine war has added to the global supply shocks which has in turn amplified the inflationary pressure, especially in the energy and agriculture sectors. For 2022, the inflation is projected to be at 5.7 percent in advanced economies and 8.7 percent in emerging market and developing economies, which has led to a tightening of monetary policy in most G20 economies. The monetary policy is likely to differ across countries, thus, it would be crucial for the G20 to ensure that central banks effectively communicate their outlook on inflation and monetary policy to be transparent and avoid policy surprises. Industry analysts also suggest that the Indian presidency needs to explore a new financial mechanism for Pandemic Prevention, Preparedness, and Response to ensure the provision of global health goods.
Other important goals will include making the global digital economy more accessible for all. This would involve building a global framework to enable cross-border trade that respects the different economic speeds, market competitiveness, and supply chain characteristics of the developing nations. India will have to use the upcoming G20 presidency for a fair, enabling and robust digital economy.