News: Recently, the Group of Twenty (G20) was facing the heat of disruption. The G7 group of rich nations have ganged. Their leaders walked out of a meeting of G20 finance ministers demanding Russia’s ouster. The developed countries have threatened to prevent the convening of the World Trade Organisation’s 12th ministerial meeting.
It was formed in 1999 in response to the Asian financial crisis. It was a gathering of finance ministers of globally economically consequential countries.
In 2008 the group played a very important role in the resolution of the 2008-09 financial crisis.
What will be the implications of the ongoing split in the G20?
This is a sign that the weaponization of global economic linkages and disruption of global economic institutions by developed economies has become a reality now.
The grouping was created to resolve a crisis, not perpetuate an economic crisis. In 2008, China and the US adopted a cooperative stance that enabled the G20 to restore stability to the world economy unlike the adversarial stand-off taken in 2022.
As per Ex-PM of India Manmohan Singh, India should work for global cooperation on the economic front even if the nations are divided and engaged in geopolitical conflict. The reasons are
(1) The retaliatory economic sanctions imposed on Russia have disrupted the global village. It has hurt all nations, especially developing countries, including India included. The economic sanctions have contributed to global inflationary pressures.
(2) In this fractured G20, India has the opportunity to become leaders in the emerging world system. Apart from a non-aligned doctrine, India needs to adopt a nondisruptive geo-economic policy. It is important for India to adopt a strategic economic self-interest doctrine in all global economic institutions, be it WTO, IMF, World Bank, or indeed G20.
(3) The global economic disruption caused by Western economic sanctions and the ongoing boycott of Russia in global economic forums need initiatives from the countries like India, Indonesia and South Africa. They can act as bridging powers between the East and West.
(4) There is going to be a reshaping and realignment of the world order. This will be a unique opportunity for India to reassess its foreign policy, economic policy and geopolitical strategy.
(5) In the post-Cold War era of globalisation, the North-South economic differences were brushed under the carpet. The East-West geopolitical divide created by the Russian invasion of Ukraine has brought to the fore North-South geo-economic differences.
(6) Few major countries helped bridge both the East-West and North-South divides through cooperative approach. They were successful in creating a multilateral trading system under the auspices of WTO and the progress on climate change negotiations.
Source: The post is based on an article “Ride Between East & West” published in the Times of India on 28th April 2022.