Introduction
The 20 (G-20) group is an initiative to attend to the global economic crisis and climate change-related risk reduction and achieve sustainable development goals. G-20 was initially formed as an inter-governmental forum to achieve new economic agendas and cooperation. Currently, it has 19 member states and the European Union, representing the world’s most significant geographies, economies and developing countries, including the most powerful nations in terms of weapons, military, and influence.
Since the birth of G-20, it’s successfully carried out the summit from 2008 till 2022, and delegations of member states met twice a year. The G-20 was formed in 1999 and emerged as a new economic bloc to bridge industrialized and developing countries and ensure financial stability. In the first G-20 summit, the Group’s leaders promised to address global economic issues apart from their political disagreement and ideological differences. The Group’s response to the 2008 financial crisis was remarkable. But the growth of this Group didn’t come up with satisfactory results due to geopolitical rivalries, power politics and the national interest of a few actors. US President Joe Biden has promised to bring back the glory the G-20 cooperation through new economic agreements and reform on corporate taxation. But tensions among major players exhausted the financial arrangement; for example, the Bali summit couldn’t ignore the Russia-Ukraine War and clearly the Group became divided on the issue. In this critical geopolitical context, India takes the G-20 presidency.
The present study intends to explore how India’s leadership will benefit the world, specifically, what would be India’s initiatives to bring economic prosperity to the region during its presidency. India has developed several new policies to make collaborative solutions to global and regional challenges with more preference for economic, environmental, climate change and human security. India has a tradition of humanistic thinking. The subcontinent has already become a role model with its Covid-19 vaccine policy. During the pandemic, India was the only hope for many nations; besides its neighbour, India supplied Covid-19 vaccines to 94 countries (The Hindu, 2021).
In addition to economic agendas, India should reach vast arching areas of cyber security, artificial intelligence, outer space, good order at global commons, and sustainable development goals. EAM S. Jaishanker stated that the G-20 presidency is unparallel, a crucial responsibility” (Bhattacherjee, December 2022). There is no doubt that India has already proven to the West that it carries an independent foreign policy and has not been influenced by any other nations. India demonstrated its independent stance on Ukraine-Russia War. There is much pressure from the West on India over the Ukraine issue. But, India implies its traditional ideological perspectives; the ‘Non-Alinged policy,’ and didn’t join any entity or alliance. There is also criticism levelled against India over its neutral stance on the Ukraine issue. India asserted that it never supported any kind of aggression over any sovereign state. Still, at the same time, India is conscious about Great power rivalries and is not interested in getting into them.
At the G-20 summit in Bali, Prime Minister Narendra Modi criticised Russia by saying, “This is not an era of War’. At the same time, India maintains its strategic relationship with Russia as old friends. ‘Russia is India’s foremost supplier of military equipment, oil, coal, and fertilizer. Recently, Russia sent a list of more than 500 products to India for potential delivery, which includes spare parts for the automobile industry, aircraft and trains. Due to the embargo by the West, Russia’s economy is facing hurdles, So India is the only choice for Russia after China. From India’s point of view, Russia is a big market for it, and India utilized this opportunity to create a demand for Indian products in Russia’ (Reuters, December 5, 2022). It can be predicted that India will try to resolve the War between NATO (Ukraine) vs. Russia. So, emerging economies, developing and least-developing countries of the world would not become victims of the War. Many South Asian nations are dependent on Russia for energy supplies. India could play a significant role in bringing two parties NATO (Ukraine) and Russia, to sit for peace. India announced the establishment of equal economic opportunity and benefits. The supply of food and basic human needs have been weaponized and controlled by a few powers. G-20 shares 60% of the world economy and holds stakes in key economic international organizations. Hence, the world’s leading economic power have a role in building a sustainable financial future for other countries.
India’s G-20: Aims, agenda and cooperation
Primarily G-20 countries aimed to enhance economic development, resolve financial crises, and policies to support mutual interest among member states. But, the forum does not limit its engagement to economic issues only. G-20 states expressed concerns about major geopolitical issues. In a recent Bali summit, countries voiced on the Russian invasion of Ukraine. Though the goals of making G-20 were initially to achieve the economic objective,but no initiative can escape from geopolitics and geo-economical interest. There is a lot of criticism against the economic Group G-20 because the membership is highly restricted and represents an elite club. Third-world or least-developed countries primarily depend on the major developed country’s economic initiatives and observed that the economic order is unequal in many cases and has not benefitted all continents equally. The leading economic initiatives like the Bretton Woods Agreement (1944), International Monetary Fund (IMF), and World Trade Organization (WTO) were born in the West. Throughout history, industrialized and developed countries constructed the International economic order. The underdeveloped or emerging developing country’s voice is unheard; sometimes, these countries couldn’t even get access to be part of these economic initiatives.
Bremmer and Roubini (2011) criticized the G-20 and stated that a G-Zero world is emerging against G-20. However, India’s leadership mantra carries the vision of making “One Earth, One Family, One Future.” In his remarks at Bali, PM Modi promoted “Vasudhaiva Kutumbakam” (the world is one family) and sought the world community to unite through cooperation to battle against all odds. India takes the presidency in a fragile period when geopolitical rivalries and economic crises are certain. India is an emerging economic power of the world, which has undergone a lot of economic transition since 1947.
Thus the subcontinent can bring new monetary policy which will benefit not only the global West, but also the global South. India has already announced its commitment to the global South. And EAM Jaishanker affirms that “New Delhi will seek to emerge as the voice of Global South, and work to depoliticize the global food supply, fertilizer, and medical product” (Sharma, December 2, 2022). India is aware of the current geopolitical reality of the world and possibly could play a role in minimising the effect of polarization on the global South. Premier Modi in his several tweets assured that India “will work to further promote oneness, inspired by the theme of One Earth, One Family, One Future”, and listed terror, climate chage and pandemic as the greatest challenges that can be best fought together” (Sharma, December 2, 2022).
G-20 countries are central industrial states of the world and are responsible for rising carbon emissions and global warming. India is conscious of the impact of climate change in South Asia and every year, the region faces climate change-related disasters such as floods and soil erosion. Many south Asian states are going to be affected severely due to the rise of seawater. Therefore, India is promoting an environment-friendly economic structure and seeking to develop countries to contribute.
India as Head of G-20: Implication on South Asia
India is the largest country in South Asia which borders other nations in the region by land or sea and shares historical, cultural, linguistic, religious and ethnic ties. ‘Neighbourhood First Policy’ was promoted and gained popularity under the present regime. India’s commitment to Global South is very much related to its neighbours. South Asian states are the least developed countries in the world. The region is more prone to natural disasters and is a victim of climate change. India could utilize the diverse platform of G-20 to make a consensus on common issues such as climate change effects, food security and its battle against terrorism etc., India is the world’s largest democracy, thus expectations for India from the global south are massive. At the beginning of its presidency, India committed to create equal opportunity and sharing benefits among all countries of the world in a collaborative manner.
The role of G-20 is geo-economically and geo-politically vital in many cases, and earlier, all economic initiatives ended up with block politics and alliances. No doubt, superpower rivalry and block politics don’t fade out yet. Still, rising new Asian powers like India and its influence in the world economy, increased the possibility of wide-ranging economic plans and cooperation, which will benefit the member states and the rest of the world.
The Bali G-20 summit is unique in many characters, because India seems to be the next Asian power other than China. India is an emerging Asian power and has played a strong balance of power role among major strategic partners. With India’s presidency at the Bali summit-2022, two significant possibilities come up before South Asia.
Firstly, India finally got the opportunity to execute its global vision and grand strategy, and secondly, South Asian region is going to get benefits through India’s leadership in G-20. India can do a lot for South Asia before the next summit. But the most challenging aspect before India will be to utilize the G-20 platform to address geopolitical security issues and narrow the gap between member states. India could play a decisive role in solving the post-pandemic economic crisis.
The Russia-Ukraine War made the post-pandemic economic issues more critical. The world expects to face an economic recession by next year or 2024. So, India takes the G-20 leadership in a hard time when the region and world are going through substantial financial hardship.
The economic growth of South Asia is diminishing after post-pandemic era”. The financial distress has affected almost all states of South Asia, but India has quickly overcome the post-pandemic economic effect. Bhutan, the Maldives, Sri Lanka and Nepal resumed tourism, two years after the pandemic. Bangladesh was comparatively in a better position during the pandemic, but the Ukraine-Russia war affected that country’s economy, and it is also facing high inflation.
Sri Lanka’s economy was worsening ever since the Covid-19 pandemic struck the island. The food and energy supply chain broke due to war. And political instability had made the economic situation imbalanced, worsening debt woes and foreign reserves. Pakistan also faces severe economic debacle due to flood and one-third of the country became inundated. Like other countries, Pakistan also became the victim of war. All South Asian states faced a price hike of natural commodities and suffered high inflation.
This year (2022), the Bali declaration addresses the War and its impact on people and the economy. Major countries condemned Russia’s invasion and appealed to the members to pressure Russia to end the War. However, it’s impossible to ensure a stable economic environment and sustainability in the world, until the geopolitical tension among major countries are lowered and a peace conversation kicked off between Russia and Ukraine. Because already most of the G-20 states stood against Russia’s aggression and supported the USA’s economic sanctions on Russia. But can it be possible to bring peace by intimidating with economic policy and countermeasures to target geopolitical rivals?
Kristalina Georgieva (Managing Director of the IMF) said, ‘Geopolitical problem can’t be resolved with economic policy measures. According to the IMF top official, the world will face three financial distress: Inflation, high debt rates and food insecurity. To battle against all these economic crises, countries should work together to reduce the high inflation rate. And in the case of emerging developing countries, the high inflation rates and debts will pave the way for survival threats to its citizens’ daily existence, food insecurity and living standard. Countries that have high debt levels will face more challenges.
Sri Lanka’s economic fall can be a warning sign for the rest of the emerging developing countries (IMF: July 16, 2022). Due to geopolitical rivalries, G-20 is now facing a severe crisis. Russia vs. NATO or US issues have a vast effect on Asia. Still, it’s not a bipolar world anymore, it’s a multi-polar world, and many countries in Asia are now in a power race. India is also in this race; through economic development, innovation, military power, humanitarian assistance, and successful diplomacy, India is now on its way to achiving ‘Great power’. But it would challenge India to establish multilateralism effectively in a polarized world and revive global governance.
Small states have lost faith in global governance and order due to sovereignty threats from big powers and developed countries’ domination in setting economic rules. These issues have long-term effects on Global South. So, India is a hope for many global south countries and it should include the opinions of least developed countries and facilitate the opportunity for those countries which are not direct members of G-20. After the end of the cold war, G-20 remains the only forum that brings developed and developing countries under one umbrella. Countries can sit and discuss global economic issues and governance despite different geopolitical interests and competitions. India can effectively utilize its growing power, emerging economy and successful diplomatic stands to build consensus on global financial issues. India has always been vocal and focused on the Global South issues, and India represented the global at a multilateral forum like the United Nations.
The challenge before India will be bridging communication among major powers, and its neutral take on the Russia-Ukraine war might be able to break the economic deadlock and bring both sides to the negotiating table. India is aiming to work for “inclusive, equitable and sustainable growth; women empowerment, health, agriculture, education, culture, tourism, circular economy, food security, energy security, green hydrogen, digital public infrastructure and tech-enabled development, climate financing, disaster risk-reduction and resilience; developmental cooperation; fight against economic crimes; and multilateral reforms” (D’ Souza et al, November 29, 2022; Rajan and Thakur, November 22 ,2022). G-20 was initially formed to manage only global economic challenges, but the current Group diversified its interest and also gave preference to several sustainable development issues. The Group’s role is influential in running global governance. India seeks to include various social and humanitarian problems in the G-20 forum, such as a pandemic, epidemic, climate change, terrorism and sustainable development goals.
India’s G-20 vision is to create oneness and a great sense of solidarity among countries. Since it is the world’s largest multi-cultural democracy, so it has the experience to balance between diverse stakeholders and opinions. And following that, this year India’s theme of the G-20, 2023 presidency is Vasudhaiva Kutumbakam: One Earth, One Family, and One Future” (The Indian Express, November 14, 2022). India has extended its humanitarian assistance by providing Covid-19 vaccines to more than 70 countries worldwide. It also appeals to all nations to work together to win the battle against the pandemic. In my opinion, the effect of the pandemic on the global economy is still not over. The Russia-Ukraine War and the US and its allies’ sanctions complicate the economic order. Indeed, the world is divided into different groups. Now, it’s high time for India to bring developed countries into a practical conversation through its leadership. Because, without peace, the economic agreement will not see the light.
It will be interesting to see how South Asia takes the benefit of India’s presidency or vice versa. Since the beginning of his government, PM Modi has prioritized the neighbourhood. And as we know, post-pandemic period, South Asian states are facing a severe economic crisis. Due to the war, economies of countries like Bangladesh, Nepal, Bhutan and Sri Lanka’s have suffered. As Taliban took over the regins of Afghanistan, a problematic change in South Asia has cropped up. So, what could India bring to its neighbours? Meanwhile, Sri Lanka needs gigantic economic support to revive its economy again. With this, geopolitical rivalry between India-Pakistan and India-China will always remain a barrier to establishing any fruitful monetary policy in the region. South Asian Association for Regional Cooperation (SAARC) has remained inactive for many years because of India-Pakistan hostility and lack of mutual trust.
Consequently, India came up with sub-regional initiatives like Bangladesh-Bhutan-India-Nepal Motor Vehicles Agreement (BBIN-MVA) in 2015, which finally came into effect on March 2022. Through BBIN, the member states try to enrich economic connectivity throughout South Asia. India’s other sub-regional policy established through the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) creates environments for cross-border economic interactions and connectivity to make integrated regions. India’s presidency at G-20 will also utilize other sub-regional and regional platforms to overcome global financial constraints.
Summary:
India takes the G-20 presidency in an acute financial crisis and geopolitical rash situation. We hope India’s leadership will bring fruitful policy and action to overcome inflation, high debt, food security and climate change issues. South Asian countries are also going through price hikes of essential commodities, debt distress and high inflation rate issues. So, India now has a lot to do for its neighbours, and it can narrow the geopolitical polarisation gap and bring consensus among developed countries. Tariff-free product export within South Asian region could change the picture of South Asia. Food security is already a concern in South Asia, and inflation can bring hunger and poverty to millions in the region. So, this is high time for India to achieve economic sustainability in the region through effective monetary policy and strong leadership.
Farjana Sharmin
(Farjana Sharmin is a Doctoral Candidate, Department of International Relations, Faculty of Social Sciences, South Asian University, New Delhi, India. Her research interest includes International Relations, Geopolitics, Geopolitics of Outer-Space, Space policy, Space Strategy and Security focus on South Asia. The author can be reached at https://www.linkedin.com/in/most-farjana-sharmin-south-asian-b08898121)
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