What to expect from G20 meeting

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There are high hopes from G20 meeting for the overall macro economy as well as the banking and financial sector. However, the question is whether expectations will manifest themselves. China’s President Xi Jinping is not coming to the meeting. This might create an opportunity for India to become the flag bearer of the global south as both India and China are vouching for that. Besides this Russia-Ukraine war will be one of the major talking points and all the members may not agree on a joint statement in that regard.

Another major issue will be the revamping of multilateral institutions like the World Bank, IMF. Currently, it is perceived that these institutions favor the needs of developed countries over the rest of the world. For quite some time, emerging countries have been pressing for changes in these multilateral institutions to make them more just and adapt to the complex changing dynamics of an interconnected digital global economy. Currently, it seems more like wishful thinking by emerging countries and it may take a long time to bring any changes in these institutions.

Another talking point is debt relief for low-income countries. Low-income countries are in no position to repay debt but providing them with relief is very complex as it is not just in the hands of multilateral agencies. China has also provided large amounts of loans and so does private financers like banks. Providing relief requires cooperation among these sets of players.

Framework for cryptocurrency and startups are also on the card. For crypto and digital currency, regulations are possible and feasible only on a global level.

On startups, common ground may be reached regarding the definition and basic framework for them. However, populism and protectionism are on the rise across the globe. Hence, countries might give preference to their domestic startups (In the form of higher subsidies, tax benefits etc.) over that of other countries. This might lead to some disagreements and that can impact the growth of startups at a global level.

Talking about disagreements, trying to weave all the countries together amidst fragmentation is going to be the core of talks as that is the theme of G20 meeting. This is interesting because India itself has acted as a mercantilist recently by curbing the export of various commodities.

On a side note PM Modi will have 15 bilateral talks with countries like US, UK, Germany, EU. This is happening at a time when India is involved in FTA (Free Trade Agreements) negotiations with EU, UK and there are some disagreements (Investment treaty and IP protection are among major ones). Resolution during G20 bilateral meetings is not likely and it may be a while before India signs a new FTA with EU, UK.