Since 2008, when the G20 was formed, how has the global financial architecture evolved? And what has been India’s contribution to it?
India has a reasonably good influence in terms of global governance. For example, on BEPS (base erosion and profit sharing), India has played a very constructive, important role. We have worked with every other country, pushed for measures to tackle BEPS in every committee. We made the pitch that measures to tackle BEPS should not be restricted to just the G20, but should be implemented by other countries as well. Likewise, FATF (Financial Action Task Force). We have done the pushing, tried to push beyond G20.
As a country, starting 2014, the G20 commitment in Australia was to add 2 percentage points to growth. We have our contribution. We have done a reasonable job in country-level actions that needed to be taken. We have been playing our role well.
At most sherpa meetings, most members expressed pessimism about growth because things are not working out that well in Europe. Even in the US, the recovery has been rather slow. On this one, I have been repeatedly saying that my pitch always has been that not all is gloom. India is growing at 8 per cent and while China’s growth rate has declined, but 6 per cent growth on a $10 trillion economy is $600 billion. So I have been positive and maintained that we should not take an overly pessimistic view of what is happening in the world economy.
How much has India contributed to this 2 percentage point global growth?
We do not have numbers.
In this G20, what are the top three agenda items for India, which is the fastest growing economy?
One thing that we have explicitly tried to pitch through a non-paper is in the context of climate change that G20 should also push for energy conservation through lifestyle changes. I put it in one of my interventions during the sherpa meeting — When I go to New York, I see all these buildings which are lit up and the air conditioners running, but nobody is inside the building. So, simply turning off the lights and ACs in the night can save energy. On this, we have done a non-paper. Turkey has joined us in that non-paper.
Second thing that we push consistently — we have not yet presented a non-paper on this — is cross-border mobility of professionals. It affects us big time. As we go forward, we will build more pressure on that. India will be the only country with excess supply of professionals. Everywhere else, there is excess demand. Our demography is such that we will have a more young workforce now than before. Every other country, including China, the workforce has started declining. Even for them, its not that the recipient countries are also worse off because of the migration. There are domestic policy implications.
As other countries grow older, and more and more grey, they will need nursing and care services. We are the most likely to be able to provide that. This automatically translates into policy imperatives for us:
We ought to think in terms of spending more in nursing training and education. This is one example.
For this Presidency, one important agenda is sustainable development goals, we have to focus on poverty eradication. We have been helping countries in Africa and we will mobilise other countries for support. It is also our ongoing agenda to push countries to reduce the cost of remittances. We had floated a non-paper in Turkey also. On terrorism financing, we continue to push for implementation of FATF standards.
Today, world over there are concerns of protectionism. What has been India’s position on this?
Our position, first and foremost has been, multilateralism ought to take priority over other forms of trade engagement. So, we continuously push that. We therefore followed up on the Trade Facilitation Agreement and implemented it. We also push the line that we have to take a firm stand against protectionism. G20 has generally done that. Also, we push the line that regional free trade agreements should be compatible with the multilateral liberalisation and commitments made under the WTO.
The rise in regional agreements seems to suggest that multilateral talks under WTO are not really making any good progress.
There are two separate things, right. There is a whole network of multilateral trade agreements, many of which previously happened under GATT (General Agreement on Tariffs and Trade). GATT itself was a big agreement. Then the Uruguay round agreement was completed under WTO in 1994, leading up to GATS (General Agreement on Trade in Services). Then came the TRIPS (Trade-related Aspects of Intellectual Property Rights) agreement. So, there is this network of agreements that exists under WTO. WTO has to implement these.
Countries can’t really violate in their national trade policy actions the commitments they have made under WTO. One big function of the WTO is to ensure that countries live by the agreements they sign. Bulk of what we do in international trade policy is governed by what we have committed to in WTO.
The theory also has been that WTO is like a bicycle, unless you make forward movement, it will fall. That aspect has been at play over the last 12-13 years. We could successfully launch the Doha Development Agenda in 2001, eight years after such a big agreement was signed in 1994 and even before the full implementation of the Uruguay round agreement. Before that, of course, the Information Technology Agreement was signed in 1996. But I think, things slowed down after 2001. The main thing that we could have achieved from DDA is the Trade Facilitation Agreement. Lot of liberalisation which was part of the Doha agenda has not happened.
And in the meantime, regional agreements have gained more prominence. The form has changed now. Earlier, there were all kinds of bilateral deals. Now the groups have become larger. For instance, the TPP (Trans-Pacific Partnership) has been signed, though ratification still remains. Certainly, this is a new thing. India itself is involved in RCEP (Regional Comprehensive Economic Partnership) negotiations. This is also a large grouping.
Within G20, are there doubts that the group is taking too much on its plate, moving further from coordinated monetary and fiscal actions to push global growth to include issues related to trade, climate change, etc?
This is certainly an issue. In the last sherpa meeting, one of the sherpas did raise it. I certainly was with him and said we perhaps need to have a session on stock taking. Because what happens each Presidency introduces new issues because they want to put a stamp on G20 engagements, but the old agenda continues. So that adds to it. Also, the process wise, expansion has led to process expansion. Previously, there were fewer ministerial conferences, but now under the auspices of G20, several ministerial conferences are happening. So you have labour ministers, trade ministers, energy ministers and agriculture ministers meeting. Then there are working groups on many subjects.
Then there are meetings of these G20 think-tanks, G20Business, etc. There are 100-120 meetings. So, for negotiations it creates a difficulty because certain things can be put up in working group meetings where documents are long, and while at the country level, country government is not in agreement but at the working group level some kind of agreement has been reached. This creates a bit of a problem.