The G20’s (Now G21) Path to International Collaboration

By Koketso Mamabolo

In a notable decision this year, the G20 welcomed the African Union as a full member of the G20+, endowing it with the same status as the European Union. This recognition underscores the pivotal role of Africa in international policymaking, emphasising the value placed on regional trade and economic integration to mitigate volatility and risks. This expansion from G20 to G21 signifies a positive signal for private sector entities seeking to tap into Africa’s economic potential.

Emerging from its origins in financial crises, the G20 once again proved its significance as the foremost platform for exchanging insights into the most pressing global economic challenges facing the world’s major economies. Several shared areas were identified where countries can transcend geopolitical differences and policy disparities to seek better coordinated responses to global market fragmentation.

Significance Of Disaster Resilience

As the world has painfully learned, disasters, whether natural or manmade, are not isolated events. They carry far-reaching consequences, inflicting catastrophic human costs and undermining nations’ development efforts. The recent devastating earthquake in Morocco, which is set to host the World Bank Annual Meetings in October 2023, struck on September 8 while G20 leaders were concluding their discussions for the day. This event underscores the urgent need for G20 coordination in reducing the impact of disasters, both natural and man-made.

The business community has been calling for top-level coordination in disaster relief and response. India has taken steps to enhance global disaster resilience through various G20 working groups. As a result of these deliberations, the G20 has established a standing Disaster Risk Reduction (DRR) Working Group to develop and implement policies for reducing risk, building resilience, and facilitating disaster risk reduction globally. This move reflects the G20 leaders’ commitment to practical action, leaving it to Brazil and South Africa, the next two G20 chairs, to carry forward India’s momentum.

Sustained Trade and Global Growth Inclusivity

During the summit, leaders unanimously recognised the importance of fostering global trade continuity and emphasised the negative impacts of protectionism. They stressed the need for open, fair, and rule-based trade, particularly in sectors like agriculture. There was a consensus on enhancing supply chain resilience and collaborating on digital trade. The G20 leaders renewed their commitment to WTO reform and coordinated trade and environment policies, illustrating a broader vision for sustainable trade.

The understanding reached at the G20 Summit received strong support for the WTO during the recent 78th session of the UN General Assembly. The UN General Assembly Political Declaration, adopted on September 19, reaffirms the commitment to a universal, rules-based, nondiscriminatory, open, fair, inclusive, equitable, and transparent multilateral trading system, with the WTO at its core. The G20 also acknowledged the pivotal role of private enterprise in accelerating growth and driving sustainable economic transformations. They pledged to collaborate with the private sector to:

• Establish investment pathways in developing nations, utilising the knowledge of multilateral development banks to attract investments.

• Simplify the process of investing, including Foreign Direct Investments (FDIs), in sustainable business models.

• Enhance the business environment and reduce associated expenses.

• Foster inclusive, sustainable, and resilient global value chains, supporting the aspirations of developing countries to ascend these value chains.

Driving Growth Through Infrastructure Investment and Strategic Partnerships 

The G20 Summit went beyond fostering unity within the G20 itself. It demonstrated a commitment to engaging with the private sector, integrating technology and innovation into resilience strategies, and establishing significant initiatives such as the Partnership for Global Infrastructure and Investment (PGII). These developments highlight the potential for international collaboration in addressing global challenges. A similar spirit of publicprivate collaboration has been evident in G7 discussions in Japan, where the PGII was launched.

The Partnership convened its inaugural meeting with businesses earlier this year, aiming to secure funding for critical infrastructure projects, including roads, ports, bridges, and communication systems, with the overarching goal of enhancing global trade and economic cooperation. Moreover, during the G20 leaders’ event on PGII, the India Middle East Europe Economic Corridor (IMEC) was unveiled, aiming to bolster economic development through improved connectivity and economic integration across the two continents.

Key Notes

The New Delhi Leaders Declaration emphasises inclusive growth, and the proposal for an India-Middle East-Europe-USA Corridor has been approved. Additionally, a Global Biofuel Alliance has been established to promote the use of biofuels. The joint declaration from G20 members expressed concern about the impact of the conflict in Ukraine on global food and energy security but did not directly criticise Russia.

This declaration was met with criticism from the Ukrainian government, which believed that Ukrainian participation would have provided better insight. According to officials, India, along with Brazil, Indonesia, and South Africa, played a significant role in preventing the G20 from splintering due to the Ukraine conflict, highlighting the increasing influence of developing nations from the Global South within the group. 

A new railway and shipping network, supported by the US, India, Saudi Arabia, and the EU, aims to boost trade between South Asia, the Middle East, and Europe while countering China’s Belt and Road Initiative. India’s Prime Minister Narendra Modi successfully showcased the summit to bolster India as a major global power, and himself as an important world leader.

Forward Thinking Strategy

The G20 leaders have come to an agreement aimed at tripling the global renewable energy capacity by 2030 while recognising the imperative of reducing unabated coal power. While they did not set explicit climate goals, they intend to review current policies and targets to achieve the objective of boosting renewable energy capacity. It was also acknowledged that an annual investment of $4 trillion would be needed for a successful transition to green energy.

The roadmap paves the way for a future in which businesses, governments, and institutions not only coexist but also collaborate. Establishing credible mechanisms for more direct business involvement, particularly in areas like disaster risk reduction beyond insurance concerns, signifies a significant shift in paradigm. The 2024 G20 Summit in Rio de Janeiro marks the 19th meeting of the newly expanded Group of Twenty. It is set to be held on November 18-19, 2024, in Rio de Janeiro, Brazil, making it the first G20 summit hosted by Brazil. The summit’s guiding motto is “Building a fair world and a sustainable planet.”

Read The Latest Edition Here: