G20 : Economic Cooperation ahead

A new global vision for G20

Note4Students

From UPSC perspective, the following things are important :

Prelims level : G-20

Mains level : Paper 2- New framework for G20

Context

While India has taken a clear view of the role of the G20, there is concern that the agenda, themes and focus areas which India will set for 2023 lack vision.

What is G-20?

  • Formed in 1999, the G20 is an international forum of the governments and central bank governors from 20 major economies.
  • Collectively, the G20 economies account for around 85 percent of the Gross World Product (GWP), 80 percent of world trade.
  • To tackle the problems or address issues that plague the world, the heads of governments of the G20 nations periodically participate in summits.
  • In addition to it, the group also hosts separate meetings of the finance ministers and foreign ministers.
  • The G20 has no permanent staff of its own and its chairmanship rotates annually between nations divided into regional groupings.

Significance of G20 in shaping global order

  • The G20 plays an important role in shaping and strengthening global architecture and governance on all major international economic issues.
  • It recognises that global prosperity is interdependent and economic opportunities and challenges are interlinked.
  • The challenge is to craft new approaches to overcome the acute global discord.

Why we need new model of cooperation

  • Multilateral commitments are faltering: Governance in a world that is steadily becoming more equal needs institutional innovation.
  • This is because the role of the United Nations and the World Trade Organization in securing cooperation between donor and recipient country groups is losing centrality.
  •  There are now three socio-economic systems — the G7, China-Russia, and India and the others — and they will jointly set the global agenda.
  • Strategic competition: Ukraine conflict, rival finance, the expanding influence of the trade and value chains dominated by the U.S. and China, and the reluctance of developing countries to take sides in the strategic competition as they have a real choice requires fresh thinking.
  • Preventing the clash of ideas through reorientation: The primary role of the G20, which accounts for 95% of the world’s patents, 85% of global GDP, 75% of international trade and 65% of the world population, needs to be reoriented to prevent a clash of ideas to the detriment of the global good.
  • The solution lies in a new conceptual model seeking agreement on an agenda limited to principles rather than long negotiated anodyne text.

What should be on agenda when India hosts G20 in 2023

1] Underlining the need for new framework

  • Redefining common concerns: First, the presumed equality that we are all in the same boat, recognised in the case of climate change, needs to be expanded to other areas with a global impact redefining ‘common concerns’.
  • Second, emerging economies are no longer to be considered the source of problems needing external solutions but source of solutions to shared problems.
  • Third, the BRICS provides an appropriate model for governance institutions suitable for the 21st century where a narrow group of states dominated by one power will not shape the agenda.
  • Ensuring adequate food, housing, education, health, water and sanitation and work for all should guide international cooperation.
  • Principles of common but differentiated responsibilities for improving the quality of life of all households can guide deliberations in other fora on problems that seem intractable in multilateralism based on trade and aid.

2] Collaboration around science and technology

  •  The global agenda has been tilted towards investment, whereas science and technology are the driving force for economic diversification, sustainably urbanising the world, and ushering the hydrogen economy and new crop varieties as the answer to both human well-being and global climate change.
  •  A forum to exchange experiences on societal benefits and growth as complementary goals would lead to fresh thinking on employment and environment.

3] Redefining digital access as universal service

  • Harnessing the potential of the digital-information-technology revolution requires redefining digital access as a “universal service” that goes beyond physical connectivity to sharing specific opportunities available.
  • For global society to reap the fruits of the new set of network technologies, open access software should be offered for more cost-effective service delivery options, good governance and sustainable development.

4] Collaboration in space technology

  • Space is the next frontier for finding solutions to problems of natural resource management ranging from climate change-related natural disasters, supporting agricultural innovation to urban and infrastructure planning.
  • Analysing Earth observation data will require regional and international collaboration through existing centres which have massive computing capacities, machine learning and artificial intelligence.

5] Collaboration in health sector

  • Public health has to learn from the COVID-19 fiasco with infectious diseases representing a market failure.
  • A major global challenge is the rapidly growing antimicrobial resistance which needs new antibiotics and collaboration between existing biotechnology facilities.

6]  Avoiding strategic competition

  • Overriding priority to development suggests avoiding strategic competition.
  • Countries in the region will support building on the 1971 UNGA Declaration designating for all time the Indian Ocean as a zone of peace and non-extension into the region of rivalries and conflicts that are foreign to it.

7] Reviving Global Financial Transaction Tax

  •  A Global Financial Transaction Tax, considered by the G20 in 2011, needs to be revived to be paid to a Green Technology Fund for Least Developed Countries.

Conclusion

Given the significance of G20 for the global order it should lead the way in formulating the new framework based on collaboration in areas such as science and technology, innovation and away from aid and trade.

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