Delhi G20 – some key issues may be off-agenda

AS SUMMIT meetings go, the Group of 20 (G20) has a mixed record. The first few were certainly instrumental in helping to ride out the 2008 global financial storm. Subsequent ones have had other lofty targets, but have not always resulted in decisive action. The 18th iteration of the summit, to be held this weekend (Sep 9 to Sep 10) in New Delhi, may skip over some significant issues.

The standard format is that at the end of the meeting, there would be a leaders’ declaration on their agreement on current global economic issues. But disagreements in the past have led to statements that omit mentioning the key challenges of the day. For instance, the need to end coal-powered electricity generation to curb greenhouse gas emissions, or the economic fallout from the Ukraine war. Such setbacks are perhaps inevitable, given that the final communique has to be the product of a consensus; everyone present must agree to everything in the communique.

The group was formed following the 2008 crisis that rattled the confidence of the West to manage the global economy on its own. Washington then invited 20 nations, representing about 75 per cent of the world’s gross domestic product, to begin the era of “summits on financial markets and the world economy”, also known as the G20. By the time of the second meeting in London the following year, the G20 together had pumped in the equivalent of US$5 trillion in stimulus into the world economy. It was an unprecedented but timely jolt to global demand that had fallen off a cliff. It was then agreed that G20 meetings would become the premier forum for international economic cooperation.

Over the years, the urgency of the early times waned, and other items got onto the agenda, including cuts to trade and budgetary deficits; the Seoul Development Consensus for Shared Growth; information networks to enhance food-market transparency; ways to fight youth unemployment and generate well-paying jobs with social security. There is even the ambitious target of reducing the gender gap in the labour workforce by 25 per cent by 2025. Other agreements included pacts on refugees, terrorism and sustainable development.

One of the more successful agreements was on taxation. The so-called Action Plan on Base Erosion and Profit Shifting was of particular concern to the European Union. The plan called for regulatory agencies to watch over the tax-avoiding antics of multinational enterprises (MNEs): profitable MNEs had to pay taxes where their consumers are located, not in low-tax havens. The accord also set a 15 per cent global minimum effective tax rate for MNEs with annual revenues of 750 million euros or more.

What can be expected from the Delhi summit? Two leaders will not be in attendance – one is Russia’s Vladimir Putin, citing his preoccupation with the Ukraine conflict. For perhaps obvious reasons, he also skipped the recent Brics (Brazil, Russia, India, China and South Africa) summit in Johannesburg as well as last year’s G20 talks in Bali. Chinese President Xi Jinping is also staying away.

Unfortunately, this could mean that some acute problems facing the global economy, such as declining farm production because of the climate crisis or rising global food prices because of choked supplies of Ukrainian grain, may be off the agenda. It must be hoped that the other attending leaders will, nevertheless, strive to get an agreement on these pressing issues.