Opinion Sanjaya Baru writes: Without great powers on board, G20 is adrift

It is instructive to recall how and why the G20 summit came into being. It was in the autumn of 2008, just weeks after Lehman Brothers imploded, that French President Nikolas Sarkozy and the President of the European Commission rushed to Camp David for a meeting with US President George Bush. They sought a joint response to a financial crisis that had enveloped both the US and western Europe.

The then existing Group of Eight (G7 plus Russia) would normally have been considered an adequate platform for a consultation among major economies. However, by 2008, China had emerged as a major economy that had the financial resources to deal with the fiscal challenge the crisis posed.

Expanding the G8 to G9, inducting China, would have been an option. However, the US was not yet willing to give China that status. Perhaps Bush, who was in the midst of concluding a strategic partnership with India, was also conscious of how India would respond to such an elevation of China. Sarkozy reportedly told Bush that there was a plurilateral group of finance ministers that included several middle powers, including China, India, Saudi Arabia and Indonesia, so why not elevate that group to a summit level? That is how the G20 finance ministers group became a G20 heads of government summit. The first meeting was convened by Bush in Washington, DC in November 2008.

China subsequently played a vital role in the management of what was essentially a “trans-Atlantic financial crisis”, misleadingly dubbed the Global Financial Crisis (GFC) by Western economists. The G20 leadership met again in London in April 2009 and in Pittsburgh in September 2009. These three summits were the most focused in terms of policy response and created new financial institutions and empowered existing ones.

India enthusiastically welcomed the elevation of the G20 since it was for the first time that it had been admitted to a heads of government summit of such importance. Frustrated with the lack of progress in the reform of the United Nations and India’s induction into the UN Security Council, it viewed the G20 as a substitute. Initially, the G20 summits did have the feel of a UN “economic security council”.

However, after the first few summits, G20 gatherings essentially became talking shops. They have not been able to meaningfully address other global challenges like climate change and global trade. Trump’s launching of a trade war against China in his first term (2017-21) and the Russian invasion of Ukraine dealt a wounding blow to the G20. At the 2022 summit in Indonesia, Russian President Vladimir Putin did not turn up.

The news headlines that came out of the 2022 summit focused primarily on the bilateral meeting between China’s President Xi Jinping and US President Joe Biden. The 2023 summit in New Delhi was marked by the absence of both Putin and Xi. India made something of the summit with a focus on the Global South and securing the admission of the African Union. While most heads of government, barring Putin, were present at Brazil’s 2024 summit, nothing much came out of it in policy terms.

The absence of Trump, Xi and Putin at the Johannesburg summit has made the G20 meeting a gathering of what may be termed “middle powers”. Trump is largely responsible for this for three reasons. First, his unilateralism. By declaring a tariff war against the rest of the world and asserting US primacy on a range of geopolitical and geo-economic fronts, he has sought to downgrade the relevance of plurilateral platforms.

Second, by suggesting a “G2” condominium with China, he has elevated a country that the US was not ready to admit into the G8 in 2008. Finally, by recommending the re-induction of Russia into the G8, from which it was evicted in 2014 after its repossession of Crimea, Trump has reduced the relevance of the G20 to Russia.

If the Big Three have no interest in the G20, this group will wither away, with patchy attendance at future summits. Few such groups ever shut shop, but their meetings acquire less relevance for their members. This fate awaits another group of which India is a member — the Quadrilateral Security Dialogue (Quad).

Trump’s new geopolitics in Asia and global geo-economics have forced India to re-examine its own approach to China. While India is scheduled to host the next Quad summit, postponed from this year to the next, its approach to the Quad may change depending on the new dynamics of the US approach to East Asia, on the one hand, and India’s own outreach to China, on the other.

While Prime Minister Narendra Modi chose to stay away from the East Asia Summit (EAS) in Malaysia, seemingly to avoid bumping into an unpredictable and Twitter-happy Trump, this group remains an important platform for India. The EAS brings together important countries from East and Southeast Asia, as well as major global powers. It is today a far more important gathering than the G20 or the Quad.

It is unfortunate that the G20 has been unwilling to address the major global economic challenges of climate change, the rise of mercantilism in international trade and restrictions on migration. Each of these geo-economic challenges can only be addressed through a global consensus that the G20 could have crafted. However, by failing to meaningfully focus on them and seek solutions that address both developmental aspirations and economic security concerns, the G20 has made itself increasingly irrelevant.

Baru was editor, The Financial Express. His most recent book is Secession of the Successful: The Flight Out of New India