New Delhi: India claimed success in reaching a consensus over the G20 Leaders’ New Delhi Declaration on Saturday, September 9. “On the back of the hard work of all the teams, we have received consensus on the G20 Leaders’ Summit Declaration” and “I announce the adopting of this declaration,” Prime Minister Narendra Modi told the G20 leaders, including the head of newly admitted African Union.
The Indian G20 Presidential is exceptional, external affairs minister S. Jaishankar claimed. In a seemingly rhetorical flourish, the poster boy of Prime Minister Modi apparently said India contributed to making “India world-ready and the world India-ready”.
The consensus on the NDD (New Delhi Declaration) seems to have come after Russia and China agreed to the specific language in paragraph eight, titled “For the Planet, People, Peace and Prosperity” that merely said “concerning the war in Ukraine,” instead of “aggression by the Russian Federation against Ukraine” in the previous Bali Declaration last year.
Clearly, this appears to be a blow to the United States, as the stern position adopted by Russia and China seems to have prevailed. It is a polarising issue and there are multiple views on this. There is a spectrum of views on this, so I think in all fairness, it was only right to record what was the reality in the meeting rooms.
Big bilateral initiatives
Besides, the G20 meeting produced several bilateral deals and new initiatives on the margins of the two-day conference. In what appears to be a well-planned initiative behind the scenes, the United States and the European Union on the one side, and India, Saudi Arabia, and the United Arab Emirates entered into a memorandum of understanding to build a new rail and ship corridor that would connect India with the Middle East.
Apparently, the joint railway project is aimed at countering China’s growing influence through its belt-and-road investments in the Middle East and elsewhere.
Like the WTO ministerial meetings, which are increasingly dominated by non-mandated issues among “friends of the willing” or “coalitions of the willing”, the Indian Presidency has subtly paved the way for pursuing issues that could further vitiate/polarize the overall security climate.
The so-called boat and rail project is expected to be one of the key deliverables Biden wanted to achieve during the New Delhi meeting. The US President touted the project saying Saudi Arabia, Israel, the United Arab Emirates, and Jordan will be part of the initiative. “It’s a big deal… It’s a real bog … this project will contribute to making the Middle East a more prosperous, stable, and integrated region,” according to a news report by the US outlet Axio.
However, the US’ track record of complying with its promised commitments/ initiatives is anything but satisfying.
“Today’s era must not be of war,” in paragraph 14 appears to reflect what Narendra Modi had told President Putin at a meeting of the Shanghai Cooperative Organization.
While the New Delhi G20 leaders meeting is marked by major bilateral meetings on the margins of the Bharat Mandapam, there appear to be no substantive gains for India and/or other developing countries.
“We are now halfway through a 4-year run of G20 Presidencies under developing countries (Indonesia and India being the first two and Brazil and South Africa are going to be the next two) and there is nothing so far about development challenges … this text has nothing to say on development challenges which are pretty telling from an Indian perspective,” said a senior UN development official on a background basis.
“The trade text is incredibly weak – which shifts the focus to Brazil and South Africa to show that they can bring a development dimension to what looks increasingly like a 21st-century reincarnation of the League of Nations and whether what they are calling the premier cooperation platform can offer anything to the majority of countries on the planet … the league ultimately just acted as cover for 19th-century colonialism,” the official said.
After all, it is common knowledge that the G20 Leaders’ Declarations lack any binding effect and invariably they remain somewhat platitudinal/aspirational in nature.
However, there is no dearth of lip services in the G20 Declarations. Certainly, New Delhi deserves credit for maximizing those services apparently at a cost of well over USD 50 million (around Rs 450 crore).
The addition of Africa Union to G20 can be claimed as the biggest gain for the developing countries but it remains to be seen as to the extent to which AU can effectively contribute to G20 in the coming years.
The G20 or the Group of 20 industrialised and several developing countries and now the new member African Union is a premier economic forum that took birth in end-2008 in the shadows of the financial crisis caused by the banks of Wall Street and successive American policymakers- who did away with the Glass-Stegall Act of 1933. The G20 comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, and the United States along with the European Union and now the African Union.
Successive G20 meetings have merely added incremental changes proposed by developing countries that faced fierce opposition from the United States and other major industrialized countries. Invariably, it is the Group of Seven industrialized countries that succeeded in including their priorities and initiatives while developing countries are apparently handed over brownie points in the final declaration.
Despite the unlimited hype about holding the presidency by India at a cost of hundreds of crores of rupees, the NDD seems to have rehashed the previous G20 Leaders’ Statements with some inconsequential additions here and there with little impact.
The preamble to NDD contains a dozen grand pronouncements ranging from “accelerating strong, sustainable, balanced and inclusive growth”, the much-abandoned “full and effective implementation of the 2023 Agenda for Sustainable Development” and scaling up financing for accelerating progress on SDGs (United Nations Sustainable Development Goals” and reform of multilateral development banks.
Given the lack of binding nature of these pronouncements, there is little point in crowing about the NDD. Effectively, the language is phrased as we “call on “, “we commit”, “we recognize”, “we reaffirm” and so on.
The NDD notes in paragraph 16 that “the uncertainty around the outlook remains high………with notable tightening in global financial conditions, which could worsen debt vulnerability, persistent inflation and geoeconomic tensions, the balance of risks remains tilted to the downside.
However, the NDD failed to point the finger at one country that caused this macroeconomic crisis, namely, the continued hikes in interest rates by the United States which escalated the debt of poor countries by around $ 800 billion over the last year.
The developing countries are already trapped in a vicious cycle of “deepening distress” that could ultimately result in a “lost decade” for them, largely due to the recent high-interest rate hikes by the central banks of the developed countries.
UNCTAD (United Nations Conference on Trade and Development) said the deepening debt distress in developing countries could cause a “developmental crisis”, with 39 countries paying more to their external public creditors than what they received in new loans, with an adverse impact on public investments and social protection.
Sustainable Development Goals
It is easy to call for “accelerating progress on (UN’s 17) Sustainable Development Goals” that were launched in 2015 and need to be complied fully by 2030. So far, around 12% of progress has been made in complying with the 17 goals that recognize “ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests.”
Even India’s track record of complying with the SDGs is anything but satisfactory. According to several studies, the number of people below the poverty line has substantially increased in the last four years following the COVID-19 pandemic.
Thus, grand pronouncements of “recommitting to achieving SDGs”, “eliminating hunger and malnutrition”, “macroeconomic impacts of food and energy insecurity”, and delivering quality education among others, remain empty promises if the host country for the G20 meeting is unable to comply with them.
The NDD emphasizes making WTO a member-driven organization with a fully functioning Appellate body by 2024 but falls short in terms of mentioning the need to uphold the core principles of consensus decision-making and SDT which are major demands of the developing countries.
At a time when India or Bharat is harking back to religion and religiosity, it is perhaps unsurprising that in paragraph 31, specific language on “culture as a Transformative Driver of SDGs” is inserted.
Under the title of “Green Development Pact for a Sustainable Future”, the NDD includes specific language ostensibly to address climate change. It reiterates the specific objectives of the Paris Climate Change Agreement of 2015, including “its temperature goal, reflecting equity and the principle of common but differentiated responsibilities and respective capabilities, in light of different national circumstances.
However, the NDD turns a blind eye to unilateral carbon taxes that are going to be imposed by the European Union, the US, and other industrialized countries. In one go, India’s much-boasted image of representing the Global South seems somewhat smudged.
The NDD appears to be on its weakest wicket when it comes to delivering on “climate sustainable finance.” Although it makes the right noises about implementing previous Green Climate Fund and enhanced role of multilateral development banks in providing public finance, it meekly notes “the need of USD 5.8-5.9 trillion in the pre-2030 period (as) required for developing countries, in particular for their needs to reach implement their NDCs (nationally determined contributions)”. In the very next paragraph, it underscores the “commitment made in 2010 by the developed countries to mobilizing jointly USD 100 billion climate finance per year by 2020.”
At a press conference, President Macron of France praised the NDD’s special emphasis on climate finance. He said France will fulfill all its commitments. In the same breath, Macron talked about carbon taxes and the measures being taken by several industrialized countries to implement these taxes. He mentioned the EU’s regulation of deforestation-free products that comes into force in next June. President Macron dropped a subtle hint that Brazil is going to host the next G20 meeting.
Brazil along with several South American countries fiercely opposed the EU’s deforestation-free products regulation at the WTO and other international forums.
So far, none of the industrialized countries that caused climate change, have met their commitments. Little wonder the vacuity of NDD stands exposed on the issue of climate finance.
Worse still, the industrialized countries are in no mood to relax their intellectual property rights on the rapid development of green technologies. It would be a misnomer to talk about effective aid and assistance coming from the US and other developed countries.
One of the issues which has been included in the G20 statement is the issue of loss and damage. It states “We will work to successfully implement the decision at COP27 on funding arrangements for responding to loss and damage for assisting developing countries that are particularly vulnerable to the adverse effects of climate change, including establishing a fund. We will support the Transitional Committee established in this regard, and look forward to its recommendations on operationalization of the new funding arrangements including a fund at COP28.”
However, one area where the advanced countries seemed to have prevailed strongly is in trade and environment. G20 will “Ensure that trade and environment policies should be mutually supportive, consistent with WTO and multilateral environmental agreements.”
While WTO is an organization for negotiating trade rules, advanced countries want to use it for negotiating legally binding commitments from developing countries in the environment, as is seen in Trade and Environmental Sustainability Structured Discussions (TESSD), while they enjoy best endeavor clauses in climate negotiations.
Coming to “multilateral institutions for the 21st century”, the NDD is replete with calls. It says “The 21st century also requires an international development finance system that is fit for purpose, including for the scale of need and depth of the shocks facing developing countries, in particular the poorest and most vulnerable” and “We are working to deliver better, bigger and more effective MDBs by enhancing operating models, improving responsiveness and accessibility, and substantially increasing financing capacity to maximize development impact.”
However, the reality on the ground is that the multilateral development banks are unable to provide finance to address current challenges stemming from the climate crisis. The Delhi Declaration says “Stronger MDBs will be important to our efforts to mobilize financing from all sources for a quantum jump from billions to trillions of dollars for development”. It weakly underscores “the need for enhancing representation and voice of developing countries in decision-making in global international economic and financial institutions in order to deliver more effective, credible, accountable and legitimate institutions.”
Yet, calls for the international finance system to deliver significantly “more financing to help developing countries and EMEs to fight poverty, tackle global challenges and maximize development impact,” invariably remains only on paper since the first G20 leaders in Washington meeting some 15 years ago.
The former Finance and Commerce Secretary S.P. Shukla says: “It is unrealistic to expect the jamborees like G-20 to deliver what the standing fora of the United Nations like UNCTAD and ECOSOC (Economic and Social Council) and other multilateral fora such as WTO, IMF and IBRD (International Bank for Reconstruction) have failed to do.”
He says, “The problem of the North is still too real and too strong to permit any substantial gains to the South in a multilateral forum like G-20 where the balance of power is tilted in favor of the North.”
In short, “The solution has to emerge from the Collective Self-Reliance of the South with an expanded ambit to include Russia and China,” Shukla told this writer.
Ravi Kanth Devarakonda is a senior journalist based in Geneva.