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G20 - India's Presidency - Keep eyes peeled for new bubbles of geopolitics & geoeconomics!

TIOL - COB( WEB) - 814
MAY 05, 2022

By Shailendra Kumar, Founder Editor

LET me begin by raking over a smidgen of old coals! When the WHO had notified the COVID-19 as pandemic in 2020, the global consensus among, not only the G7 countries, but also G20, was that the pandemic was a common scourge and each nation worth its scientific and financial 'salt' ought to put its finger in the 'dyke'! Most global think-tank institutions and also governments across many continents believed that the global cooperation would not have been needed more acutely in the past than to deal with the life-gobbler virus! While major swathes of the globe shut down in phases to delay the inevitable and rummage the state-of-the-art labs to develop vaccines, a geopolitical squabbling also broke out, simultaneously, between the US and China over the issue of the origin of the virus! Their bilateral trade bumped along the bottom and the war of words escalated in a trice and plateaued at no less height than 'Mt Everest'! Voila!

WHO itself came under verbal artillery fire and the US, much to the horror of the acolytes of multilateralism, not only suspended its funding of the global health regulator but also put wet blanket on its membership. This was the beginning of the end of the phenomenon of globalisation riding the cart of multilateralism driven by multiple 'horses' like the UN, WTO, UNSC, IMF, World Bank and also G20! The cracks widened a bit more starkly when countries began to restrict exports of COVID-related goods and also raw materials, including APIs for many drugs-manufacturing! The canyon without the 'arches' grew further in size when the vaccine was developed and the G7 countries overbooked the supplies with their pre-orders! A new controversy of vaccine inequity coupled with a new genre of vaccine diplomacy raised its demonic head and sparked another bout of pugilistic trade restrictions on export of vaccines! A major bump in the road to global cooperation! Or, call it turkeys voting for Christmas!

Even as the jitters relating to the COVID-variant Omicron were still around and most countries were busy finding ways to recover the lost economic health, the wet-behind-the-ears autocrats acted the antsiest and the bravest and decided to give a flight to their long-snarled wings for territorial expansionism. China recklessly contributed to the rapidly-fracturing geopolitical mirror by breaching the Line of Actual Control on the Indian borders! A rude display of toxic masculinity! India also decided to give China the hairy eyeball! And China's triumphalism thus far looks contained! But, soon followed suit its all-wet kindred friend from Russia who certainly wallowed in self-made belief that capturing Ukraine would not be more than a bumpy morning walk on an unpaved walker's track! But, ripples of surprise awaited Mr Putin and he appeared to be lost in the moorland of the vast war zone. The Russian troops played into the talons of Ukraine's self-defence gimmickry! Mr Putin's awe-inspiring troops were found to be plodding and anaemic!

However, it was a shock-and-awe experience for the world, particularly the NATO which was caught on the wrong foot! With diversity in shrieks and wails of civilians piercing through the eardrums of the Western leaders, the Franklin Roosevelt's 'great arsenal of democracy' and the democratic West hit back with a deluge of economic sanctions against Russia. Later, the NATO which firmly stuck to the policy line of self-restraint by not directly engaging in the war, began talking turkey and opened the floodgate of supplies of advanced military hardware and financial assistance. The war crime charges finally enabled the West to eject Russia out of the UN Human Rights Council. However, over 50 countries abstained from voting at the UN and the World today stands caught in a sharp cleft stick! The West is trying to woo India, Brazil, China and Indonesia to openly lambast Russia's naked aggression! The West is also in a perpetual state of panic about the widely-believed hypothesis that like Hong Kong, China may try to annex Taiwan and may not mind using military firepower. White House believes that Mr Xi Jinping would prefer giving his eye teeth for Taiwan! He is just waiting for the final outcome of the Ukraine war! However, given the stiff resistance by Ukraine where even the lamest duck has proven to be the bravest, the geopolitical canvas may not be up to the liking of China or 'shellshocked' triumphalist! It may not be ill-put to say that as far as Taiwan goes, Mr Xi Jinping has never heard of the Goodhart's law - 'When a measure becomes a target, it ceases to be a good measure'! Taiwan would always remain a good target on Mr Xi's radar! And he does not give a hoot to eye-rolls by the West! Shock horror!

With the geopolitical tensions weaving a new global zeitgeist, the G20 Finance Track wing recently held its review meeting in the Washington DC. Though there were many pressing agenda items to be discussed but the gathering could not rescue itself from the darkening clouds of geopolitical fracture which may widen and deepen with each summit of multilateral bodies in the coming months! The G20 Finance Ministers and Central Bank Governors' summit was predictably precariously perched! Carrying the load of Ukraine war, the US and its allies called for excluding Russia from international gatherings and from financial institutions. Among those who walked out of the meeting when the Russian Finance Minister joined the meeting virtually were, the Fed Chair, J H Powell, the Treasury Secretary, Janet Yellen, the president of the ECB, Christine Lagarde, the governor of the Bank of England, Andrew Bailey and the Deputy PM and FM of Canada, Chrystia Freeland. The nub of the story is - the G20 now stands divided into three tents with China backing Russia and the emerging economies preferring not to strain their vocal cords and watch the unfolding antics with a tinge of bewilderment! The resolve of the Western democracies to defenestrate Russia out of G20 is so firm and rocky that Germany which has the present rotating presidency of the G7, has invited Prime Minister Modi to attend the next month summit, and it is widely expected that India's support would be sought to toss Russia out of G20 forum! A catch-22 for India! Enormous! Enormous!

In this grim backdrop, India is going to assume the crown of the rotating presidency of G20, for the first time, from December 2022 till November-end 2023. Undoubtedly, it is a huge recognition of India's growing heft-ness on the global canvas of geopolitics and geoeconomics but my fear is that its presidency may turn out to be a crown of thorns! Leave alone the peacetime diseases like stifled growth, soaring debts, rising poverty and stalled international trade, India would have to navigate very carefully to stymie any bid to further widen the growing gulf among the critical engines of global growth! Given the fact that the Ukraine war is turning out to be a quagmire for Russia and the engine of a new round of cold war has roared back into life, India will have to play the role of a 'fire brigade' to douse fresh 'ambers' of differences so that this forum is not hollowed out of its raison d'être! Ideally, during its Presidency, India should stick to just a handful of priority issues to spawn tangible results but it also needs to keep the door open for what is widely known as the 'Ant Colony Optimisation' method in the software world - It basically means random rerouting! Depending on the volatile nature of the world economy which is heading against the headwinds of stagflation and taxing escalation of food and energy prices, India may require to tweak its priority bucket accordingly! Lo and behold! Lots of water would flow over the bridge by the time India takes over the Presidency and no amount of homework would work as situation in the next 12 months may entail India to pull it by bootstraps!

While sticking to the Indonesian leitmotif - Recover Together Recover Stronger, India should list out minimum issues to carve out its own legacy. Since food is back, not on the plate but on the agenda, the WTO rules would have to be tweaked to deal with exigencies so that poor nations are not starved. G20 needs to feel the wet of tears of poor countries which are crumbling under the weight of their mounting external debts and skin-crawling inflation! Lanka is just one example. There are dozens of such economies in Africa and Latin America which are being crushed by the uncorked demon of inflation! Supply chain bottlenecks would not ease sooner and the G20 needs to work together for a diversified supply-basket. Given the hot lava beneath the US-China relations and also the sublime mistrust among EU countries against China, the West would support India if it struts its stuff well! Energy and climate change, seemingly endless problem, would remain red-hot issues! Beware of soaring silhouettes of the twin crises! And India would need to keep sensitising the rich economies to pay for the larger share of carbon sins done in the past. Technology transfer for carbon capture and green fuel like hydrogen needs to be universalised to save the planet. No IPR business, please!

Indo-Pacific geopolitical issues would remain hot on the plate for years to come and the G20 needs to work out exit routes to avoid eyeball to eyeball confrontation. Besides greater tax transparency eco-system, India needs to develop consensus over the long-pending reforms of the global lenders - the IMF and the World Bank. Emerging economies need to be acknowledged by their enhanced representation and the G20 needs to admit that the present global scenario is not post-World War II period! The clock has been ticking and time cannot be frozen in 'geopolitical freezer'! For fair and smooth functioning of these institutions, elite members like the US and Japan will have to accept diluted shares! Similarly, strengthening of the UN, particularly UNSC, is long overdue. If UN is going to survive, meaningfully, in the transformed global realities, its key councils and bodies have to be reformed and fairly represented. Though I am not too optimistic of bulky successes but even a smidgen of change in the right direction would help the next Presidency to carry forward! Time to cure the rot festering to the bone of the core of these multilateral institutions a la discontinuation of Ease of Doing Business Report! Thoughtful steps are needed to prevent the deepening process of omnishambles! Gene-editing measures are the need of the hour to sculpt new DNA for these institutions to serve new challenges confronting humanity! Hope, G20 would not wallow in past glory and make right overtures to retain its legitimacy and relevancy for the Gen Z! Hurray!

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