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.
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.
The writer is chancellor, Central University of Gujarat
express@expressindia.com
