Dining at the G-20

image_pdfimage_print
The US
and China signing an agreement on climate change excludes India from
the G-2 consensus on this critical issue. A decade ago, India and China,
both members of the G-20, were invited to be permanent invitees to the
G-8. This was on account of the efforts of the then Canadian prime
minister, Paul Martin, who was so dedicated to seeing this happen that,
in the week of the election he lost to Stephen Harper, he flew down to
the G-8 meeting in the Bahamas to argue this case. Martin contended that
India and China must not be excluded because, as shown by the Canadian
policy
analyst, John Kirton, head of the G-8 Research Group at the Munk
School of Global Affairs, Toronto, their economies were in the top
eight. I invited Kirton to the G-20 meeting in Delhi last year.
It was Jim Balsillie, the Canadian chief of BlackBerry, which is
headquartered at Waterloo, who spearheaded this effort. The book,
Reforming From The Top: A Leaders’ 20 Summit, was this effort’s bible.
In this book, edited by John English, Andrew Cooper and Ramesh Thakur,
the case was made for direct diplomacy at the world’s high table to
solve global problems. Anne-Marie Slaughter, then dean of the Woodrow
Wilson School at Princeton, pushed the agenda and is now advisor to the
US State Department. Juha Jokela, in his by now well-known 2011 paper,
“The G-20: A Pathway to Effective Multilateralism?”, tracing the history
of the G-8 since then, documents the role that India played in bringing
the developmental needs of poorer countries to the world high table. As
an Indian, my argument in a paper cheekily called “Sherpas and Coolies”
in Reforming From The Top was that supping at the high table was
productive only if India’s concerns on water, energy, nutrition and
trade were taken on board. Jokela traced precisely whether this had
happened or not.
The position recently stated by the prime minister’s G-20 sherpa is
that India’s views on climate change and, therefore, energy ought to be
different from China’s, because energy and emissions issues have to be
looked at in per capita terms, and not as absolute numbers. This is
important, the argument goes, because poor countries must be allowed to
pursue development, and domestic and global policies have to be designed
to enable growth to be sustainable. Historical emissions on account of,
say, a large cattle population in India, are recorded, and it is the
magnitude of change that is important. In per capita terms, both India
and China are way below the developed world in energy intensity. In
absolute terms, India

may
burn half a billion and China more than two billion tonnes of coal. The
Chinese have, of course, in a sense already decoupled and formed the G2
with the US.
India pursues three objectives at the G-20. The first is to seek
stability to enable reform. The second is improvement in the global and
national architecture to deepen financial markets in pursuit of
inclusive growth. The third is concerned with how these two link to
trade policy. India’s phased process of reform, with the ultimate goal
being complete capital account convertibility, stated initially during
my stint as planning minister in the Ninth Plan document, was to be
protected from the wild swings of global financial markets, which were
particularly evident after the East Asian meltdown. India wanted the
rules to be clear and the paths to be flexible. At the G-20, India must
constantly project the art of following its own interests and
championing the growth of poor countries as two sides of the same coin.
Having increasingly utilised the market in its larger economic policies,
Indians tend to be appreciative of the consensus on formulating
country-specific commitments for G-20 initiatives like the Mutual
Assessment Process, leading to action plans for higher growth. At the
measurement and operational levels, India correctly argues that
commitments emerge from domestic policies, and the necessary global push
is absent. It also has a somewhat realistic approach to the rebalancing
doctrine, recognising the scales of the US and German economies but
asking for creative institutional experimentation to encourage trade
between the faster-growing developing economies. This is needed to avert
global crises and push growth rates higher. However, uncoordinated
rebalancing may make things worse.
Tax reforms and public sector reforms are also important areas of
concern at the G-20. India’s central bank chiefs have always been
involved in the pursuit of transparency and rules-based operations in
global financial flows. Concerns over corruption and illegitimate money
flows are shared globally. With a conservative banking system and strong
regulatory central banking tradition, Indian central bank chiefs such
as Y.V. Reddy and his successors are recognised names in the search for
financial transparency. India must work to consolidate their reputation.
– See more at: http://indianexpress.com/article/opinion/columns/dining-at-the-g-20/2/#sthash.qckj6ivt.dpuf

Please follow and like us: