This year’s Group of Twenty (G20) Summit, under the theme ‘One Earth, One Family, One Future,’ is set to begin on September 9 in New Delhi, India. Throughout the year, India has used its G20 presidency to focus discussions at ministerial meetings, preparing for the summit. The agenda that has emerged will prioritize economic growth, financial stability, and development needs – issues that are significant for countries in the Global South. Prime Minister Narendra Modi has intentionally avoided the contentious Russia-Ukraine issue, arguing that the United Nations is better suited to address it, while the G20 should focus on economic and financial coordination.
Modi’s pragmatic approach, however, has been undermined by the decisions of Russian President Vladimir Putin and Chinese leader Xi Jinping not to attend the summit. This move may partially be a response to the language in the draft communiqué condemning Russia’s war in Ukraine. These developments confirm the divisions within the G20 and indicate a shift from a premier forum for international economic and financial coordination to a platform of competition between the Group of Seven (G7) and China and Russia for influence. As a result, expectations for this and future G20 summits should be adjusted – they are more likely to yield small steps forward instead of major breakthroughs.
Despite this challenging backdrop, India’s approach could still lead to concrete results at the summit, particularly outcomes that benefit developing countries. Whether announced in a joint communiqué with consensus or summarized in a chairman’s statement, India’s efforts to raise issues important to the Global South should be acknowledged. Several key issues worth exploring include the possibility of granting G20 membership to the African Union (AU), reforming global financial institutions, sovereign debt restructuring, and climate financing.
India has proposed inviting the AU, which comprises all fifty-five African countries, to join the G20 as a full member similar to the European Union. This proposal is likely to materialize at the summit, given the support expressed by US President Joe Biden and German Chancellor Olaf Scholz. The inclusion of the African Union would represent a significant step towards making the G20 more representative of the world and providing a platform for developing countries to voice their concerns. However, the AU’s membership could prompt discussions on inviting other regional organizations such as the Organization of American States and the Association of Southeast Asian Nations.
Another area where progress may be achieved is the G20’s approach to multilateral development banks (MDBs). The G20 can advocate for incorporating climate change financing into the core missions of MDBs and increasing their lending for climate-related activities. Specifically, the G20 may push for the implementation of the proposed Capital Adequacy Framework (CAF) to enable MDBs to optimize their balance sheets, freeing up room for new loans. These reforms could potentially increase annual lending by an estimated eighty billion dollars without jeopardizing their AAA credit ratings. While this may not fully address the needs of developing countries, it is a step in the right direction. Additionally, discussions on the International Monetary Fund’s (IMF) sixteenth general review of quotas and the issue of excess special drawing rights pledged by rich countries are expected to take place at the summit.
Reforming the World Trade Organization (WTO) to provide equitable and rules-based access to world trade for developing countries is another demand that may be raised. However, breakthroughs on this issue are challenging, particularly in relation to the functionality of the WTO’s Appellate Body and China’s approach to supporting its companies in domestic and global markets.
Sovereign debt restructuring is an area where the G20 has made some progress, including the establishment of the Global Sovereign Debt Roundtable. Further discussions are expected on improving debt transparency and comparability of treatment. The recent debt restructuring deal for Zambia indicates a willingness to address the issue, although more needs to be done to support highly indebted emerging markets and low-income countries in debt distress.
Climate financing will be a key focus for the developed countries in the G20. Calls to fulfill the 2009 pledge of transferring one hundred billion dollars annually to help developing countries cope with climate change impacts are expected. Proposals such as debt-for-climate swaps, which involve significant sovereign debt relief for climate change mitigation and transition activities, may also be discussed. However, it remains uncertain whether the G7 will agree to the UN secretary-general’s proposal for a five hundred billion dollar stimulus to support UN Sustainable Development Goals by 2030.
In addition to addressing these specific issues, the upcoming G20 Summit could also mark the beginning of a competition between China and India for influence in the Global South. India’s approach focuses on proposals to reform the international economic and financial system and institutions to better meet the development needs of developing countries. On the other hand, the expansion of the BRICS group, including countries like Russia and Iran, may present challenges if anti-US polemics are used to advance their own agenda. It is crucial for developing countries to recognize this challenge and align with India’s more cooperative approach. The G7 should support India’s efforts to become the voice of the Global South against China’s influence, both at this year’s summit in New Delhi and next year’s summit in Rio de Janeiro.
