Russia Looks To Dominate G20 Summit As Global Economy Of Serious Concern

Russia’s invasion of Ukraine and its associated sanctions, which the International Monetary Fund’s report for the G20 had highlighted as one of the three major reasons which contributed to the weakening of the global economy.

Russian President Vladimir Putin. (Image: AP/PTI)
Russian President Vladimir Putin. (Image: AP/PTI)

The dominating factor in the United States’ agenda for G20 and the commonality with that of India’s are the global economy and the rising food and energy prices. And the centrality of this discussion falls into Russia’s invasion of Ukraine and its associated sanctions, which the International Monetary Fund’s report for the G20 had highlighted as one of the three major reasons which contributed to the weakening of the global economy. But how successful is the grouping which have been criticized for not doing enough to mitigate the economic fallout from the Covid-19 pandemic?

First off, the key event from November 14 has been the meeting between US President Joe Biden and China’s President Xi Jinping. This as it many say, signals an openness to repairing ties which Bidens administration have recently suggested – despite tensions over China’s aggression towards Taiwan and in the Indo-Pacific region. As one can imagine then, that while many analysts pointed to China being a hot topic, it seems Russia will have all the focus.

In fact, in a statement day before the start of the meet on November 14, a senior administration official at the White House, said during a press briefing that Biden would be focusing on the challenges being faced: “a global economy that faces serious headwinds as a result of Russia’s war against Ukraine, with rising food and energy prices impacting low- and middle-income countries the most.”

While Prime Minister Narendra Modi, in his statement before the Summit said he would have extensive discussions with other G20 Leaders “on key issues of global concern, such as reviving global growth, food & energy security, environment, health, and digital transformation”.

Groups inception and achievement

The grouping of the world’s largest economies came to be in 1999; conceived to discuss international economic and financial stability. Together, the nations of the G20 account for around 80 percent of global economic output, nearly 75 percent of global exports, and about 60 percent of the world’s population.

But how successful has it been? The Council on Foreign Relations (CFR) has said that one of the group’s most impressive achievements was its response to the 2008 financial crisis. The G20 nations agreeing to spending measures worth $4 trillion in 2008 and 2009 to revive their economies, saw the rejection of trade barriers, and implementation of reforms in the financial system.

At the same time, the group has been criticized for being unable to do any concrete commitments on climate change despite it being a focus in the 2021 Rome summit. While countries had agreed to curb emissions of methane and end public financing for most new coal power plants overseas, CFR said it said nothing on measures to limit its coal use domestically.

Furthermore, the Groups response to the devastating Covid-19 pandemic, was deemed as lacking. The one measure which was concrete was that the G20 countries suspended debt payments owed to them by some of the world’s poorest countries. This in effect helped in providing billions of dollars in relief as economies came to a halt with the pandemic and its reactionary lockdowns.

It was the World Bank and the IMF which had urged the G20 to set up the Debt Service Suspension Initiative (DSSI). This was then established in May of 2020, with 48 out of 73 eligible countries participating in the initiative before it expired at the end of December 2021. That term saw the suspension of $12.9 billion in debt-service payments owed by participating countries to their creditors, according to the latest estimates.

So now, with the world still recovery from the shock of the pandemic, facing another crisis in Russia’s invasion of Ukraine which began in February of this year, makes it an obvious subject of importance.

The IMF’s report though had signaled to three factors which have seen the global economy slowdown. One it said was the persistently high and broad-based inflation which was necessitating a tightening of monetary policy in many major economies. Second it reflected on the growth momentum in China remaining weak amid intermittent pandemic lockdowns and the worsening property market crisis. While the third point was Russia’s invasion of Ukraine and its associated sanctions. This it said contributed to the supply disruptions, rising food insecurity, and energy concerns.

But up until October, the signaling has been that China too would be high on the agenda for the US. In its National Security Strategy released by the White House in October, it spoke extensively about China and Russia, with a section it called “Out-Competing China and Constraining Russia”.

It said “The People’s Republic of China harbors the intention and, increasingly, the capacity to reshape the international order in favor of one that tilts the global playing field to its benefit, even as the United States remains committed to managing the competition between our countries responsibly.”

It further pointed to US interests which are best served when its European allies and partners play an active role in the Indo-Pacific – which India is party to.

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For India’s border woes with China, which saw its most violent clash in recent times in 2020, relations have been anything but rosy. But what it would hope works in its favour is India assuming the G20 Presidency from December 1.