Modi in China: The G20 and Beyond

 
 

Indian Prime Minister Narendra Modi participated in the eleventh G20 Summit in Hangzhou, China on September 4-5, 2016. Before arriving in China, he paid a highly successful two day visit to Vietnam, where he signed 12 agreements significantly advancing bilateral relations in the spheres of defense, trade and investment, culture, and development cooperation.

In addition to attending the different segments of G20 Summit and making focused interventions, Modi met and held talks on key bilateral issues with the host, President Xi Jinping of China, as well as the presidents of Russia, Turkey, and Argentina, prime ministers of the U.K. and Australia, and deputy crown prince of Saudi Arabia. He also informally interacted with U.S. President Barack Obama and French President François Hollande on the margins of official deliberations.

The significance of G20 has been progressively increasing over recent years. It was initially established in 1999 in the wake of the East Asian economic crisis. It was then comprised of the finance ministers and heads of central banks of 20 major economies of the world, who would meet on the margins of the IMF-World Bank meetings every year to discuss issues related to global financial architecture and global economic governance. These meetings were upgraded to the summit level at the suggestion of the then U.S. president in 2008 to deal with the international financial and economic crisis after the fall of Lehman Brothers in September 2008. In 2009 and 2010 the summit was held twice a year. Since 2011 however, it has been held annually.

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The G20 represents 85 percent of world GDP, 80 percent of world trade, and two-thirds of the world population. It is a forum in which world’s major economies, both developed and developing, are represented. In addition to the summits, the G20 also organizes meetings between different ministers and national groups and agencies of member countries. With passage of time, the agenda of G20 summits has continued to expand so that in addition to macro aspects of trade, finance, and economy, the forum also debates political and social issues including terrorism, terror financing, health, education, water, agriculture, and more. It has increasingly become a Christmas tree on which all countries hang their favorite agenda items and issues.

Perhaps unsurprisingly, then, the G20’s record of implementing its decisions has not been very inspiring. According to a study conducted by a Canadian institute, only 77 percent of decisions taken at the last summit in Antalya, Turkey in 2015 have been implemented. In spite of being an extremely powerful and influential forum, G20 does not have a Secretariat or any permanent staff. All work is accomplished by the country that holds the chair for that year.

The Hangzhou Summit was the first G20 summit organized by China and also the first such high level summit to take place in that country. In terms of logistics, facilities, and arrangements, China acquitted itself creditably — barring the snafu at the airport when Obama was not provided a regular staircase to descend from Air Force One on his arrival and the subsequent heated altercation between U.S. and Chinese officials. It is not clear whether the incident was accidental or intentional, although Obama dismissed the episode with a light quip.

Along with the East Asia Summit in Vientiane, Laos, the G20 was the last major international summit that Obama will attend before exiting office in January 2017. This was also the first summit for U.K. Prime Minister Theresa May and Brazilian President Michel Temer. The significance of the summit was further enhanced as it was the first G20 gathering after the Brexit vote and took place just before the U.S. presidential elections, both of which will have a significant impact on the international economy and trade in the coming years.

China identified the theme for the summit as the creation of an “innovative, invigorated, interconnected and inclusive” (the “four Is”) world economy. All these elements are extensively reflected in the final resolution adopted by the leaders.

At the end of the summit, the assembled leaders agreed to coordinate their macroeconomic policies, oppose protectionism, and promote growth and demand. However few concrete proposals emerged to effectively meet the growing challenges to globalization and free trade.

Discussions at the summit were jolted by the test firing of three medium-range ballistic missiles by North Korea, which was an embarrassment to its patron and host country China. Other geopolitical discussions threatened to overshadow the main agenda, as Russian and U.S leaders met on the sidelines of the summit to find a solution to Syria but failed to reach a deal. Discussions are expected to continue. Meanwhile, the United States and China jointly affirmed that they will ratify the COP 21 Declaration on Climate Change, signed last December in Paris, by the end of this year. This provided a big morale booster to implementation of this momentous deal. Twenty-five countries have so far ratified the Accord which will become operational once 55 countries complete their domestic processes.

China was successful in avoiding the summit being hijacked by comments on and criticism of its belligerent position on the South China Sea dispute in preference to focusing on ills that afflict the global financial and economic health and growth. China’s image-conscious rulers made full use of the opportunity to project the country’s emergence as a world powerhouse.

In his address at the summit, Modi exhorted the G20 countries to isolate and sanction countries which sponsor terrorism and not reward them. Without naming Pakistan, he said that a single country in South Asia is spreading agents of terror in India and the region. He referred to the urgent need to curb black money; to forsake protectionism; to promote growth and demand; to safeguard climate justice and uphold the principles of equity and Common But Differentiated Responsibility (CBDR); curb reckless consumption and encourage lifestyles that are in harmony with nature; promote a transparent, equitable, non-discriminatory, open, inclusive and rule-based global trading architecture which positively responds to needs and priorities of developing nations; ensure global and public health security; eliminate “safe havens” for economic offenders; and secure a “full commitment” from global powers to act against the corrupt and to disrupt excessive banking secrecy. He emphasized that India’s priority is to work toward a Trade Facilitation Agreement in Services, as free mobility of skilled professionals and service providers is essential for a knowledge and innovation driven economy.

Modi’s message on terror was stern, cautionary advice to the international community that they should not expect any elasticity or flexibility from India if Pakistan continues its nefarious activities in carrying out terror attacks in India. Modi’s message at the G20 was also directed at China which has continued to blindly support Pakistan on this vital issue. In his bilateral meeting with Xi, Modi said that terrorism should not be viewed through the prism of politics as it is a scourge that afflicts the whole world. Modi strongly urged the BRICS leaders at the meeting which he chaired to take the strongest action against terrorism as the world needs a unified approach to deal with this menace. He stressed that terrorism remains the primary source of instability and biggest threat to societies and countries; its supply chain and reach are global.

In his bilateral conversation with Xi, Modi also underlined that both India and China need to be sensitive to each other’s strategic interests, concerns, and aspirations to realize the full potential of their bilateral partnership. He also raised the issues of India’s membership of the Nuclear Suppliers Group, which was blocked by China at the NSG plenary in Seoul in June 2016; the “technical hold” on designating JeM Chief Azhar Masood as a terrorist by the UN; and construction of China-Pakistan Economic Corridor, which passes through Pakistan Occupied Kashmir, an area also claimed by India. Xi reportedly responded that he looks forward to working with Modi to “maintain their hard-won sound relations and further advance cooperation.”

In the first few years of its establishment, G20 discussions had produced tangible results in coordinated policymaking and follow up action, but the forum has since meandered and lost focus. Its significance has however continued to grow because of the opportunity it provides to world leaders to meet bilaterally with their major partners to discuss and resolve urgent issues of concern and interest.

Ashok Sajjanhar is a career diplomat who has served as Ambassador of India to Kazakhstan, Sweden and Latvia, as also as Secretary/Principal Executive Officer of the National Foundation for Communal Harmony, an autonomous organization with the Ministry of Home Affairs. He has held several significant positions in Indian embassies in Washington, Moscow, Brussels, Geneva, Bangkok, Tehran and Dhaka.

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