The G20 is perhaps the ideal multilateral agency to lead the world out of its pandemic induced economic morass. Yet, it has been shy in deploying its full economic might and leveraging its power. With India assuming its Presidency in 2023, what could the G20 do to bring an end to the pandemic, accelerate a rapid and inclusive recovery, and prevent the occurrence of the next global epidemic?
The Global Financial Crisis cemented G20’s reputation as the premier crisis management and coordination body. The US, which held the G20 Presidency in 2008, elevated the meeting of the Finance Ministers and Central Bank Governors to Heads of State, resulting in the first G20 Summit.
The Summits in Washington DC, London, and Pittsburgh set the scene for some of the most durable global reforms of our time: blacklisting states in an effort to tackle tax evasion and avoidance, provisioning stricter controls on hedge funds and rating agencies, making the Financial Stability Board an effective supervisory and watchdog body for the global financial system, proposing stricter regulations for too-big-to fail banks, refraining members from imposing new barriers to trade and investment for a period of 12 months (the standstill provision), to name a few.
By the time Covid-19 stuck, the G20 had wandered off from its original mission. In the absence of any global financial crisis, G20 reinvented itself by widening its agenda to include issues such as climate change, jobs and social security issues, inequality, agriculture, migration, corruption, terror financing, drug trafficking, food security and nutrition, disruptive technologies, and meeting the sustainable development goals. G20 lost its focus.
In the mid-2010s, many G20 members were swept away by anti-globaliser movements and distracted by bilateral squabbles. Brexit lent a devastating blow to G20 , raising the uncomfortable question of whether global interdependence has gone too far. Former US President Donald Trump’s recalcitrant stance on global issues meant that G20 lost its key voice. The China-US trade friction split asunder G20.
Walking the talk
G20 members have made all the right commitments after the pandemic, but there is little to show in action. At the Riyadh Summit in October 2020, they prioritised four things: fighting the pandemic; safeguarding the global economy; addressing international trade disruptions; and enhancing global cooperation. The Italian Presidency in 2021 has rightly focused on three broad, interconnected pillars of action — People, Planet, Prosperity — vowing to take the lead in ensuring a swift international response to the pandemic.
Yet, the global inequity in vaccine roll-out has persisted. Despite millions of deaths, the G20 members have refused to give the legal backing to manufacture vaccine in developing countries. While recently the US has backed patent waiver on Covid-19 vaccines, other G20 members continue to block the proposal made by India and South Africa for a waiver from certain provisions of the TRIPS agreement for resolving supply side bottlenecks.
G20, post-Covid, needs to do three things.
First, it needs leaders with impeccable global credentials. With Indonesia and India in line to assume Presidency in 2022 and 2023 respectively, President Jokowi and Prime Minister Modi have the opportunity to restore world’s faith in multilateralism.
Second, the emerging economies, along with the US, must make equitable vaccine rollout and patent waiver the number one priority for G20. Finally, G20 must strengthen the partnership with international organisations such as the IMF, the OECD, the WHO, the World Bank and the WTO, and delegate them the task of monitoring progress.
The post-Covid world needs more multilateralism, not less. The advanced economies carried its torch for seven decades with impressive track record, but they seem exhausted.
The writers are with ICRIER