What awaits in Buenos Aires G20?

The world is grappling to resolve a host of existing problems. Compounding the issues are new problems created by disruptive technologies. Though technological advancement is certain, its impact, particularly on job creation and employment, is yet to be assessed. Disruptive technologies like crypto-currencies, blockchains, e-commerce, Internet of Things (IoT), machine2machine learning, 3D printing, artificial intelligence and robotics and the use of these disruptive technologies in drone surveillance hold out great scope for economic development. But here one should strike a note of caution: the use of technologies like crypto-currencies, block-chains and e-commerce needs to be regulated through appropriate global and national laws so that tax evasions do not take place and no black money is created. G20 had earlier resolved to tackle the menace of black money, tax havens, imaginative accounting, transfer pricing and the like. Though a humble beginning was made, there are miles to go. Reforming global financial system The much-touted reforms in global financial and monetary system is yet to reach its ultimate shape. In Germany last year, G20 members resolved that efforts will be made to complete quota reforms at the IMF by 2019. Can the world drive a grand bargain between emerging and developed economies on fashioning more representative, effective and legitimate global institutions? After the global financial crisis in 2008, consensus emerged on the need for a better regulatory structure to deal with risks stemming from financial fragility. The Financial Stability Board under the auspices of G20 was set up and it has made a number of recommendations to member countries to combat systemic risks and to strengthen the global financial system. Though a number of regulatory reforms like Basel III, over-the-counter (OTC) derivatives market, changes affecting the regulatory and accounting framework for institutional investors, policy measures for globally systemically important financial institutions (G-SIFIs) are being implemented, the progress has been largely tardy. US Federal Reserve Policy causes currency fluctuations across the globe. Its spill-over affects the US economy too. In this situation, can we have an independent global reserve currency in lieu of US dollars? Can we make SDRs tradable in this situation? There is also the problem of currency manipulation by central banks of some countries. Can we have at least two zones for financial architecture – Asian Financial Architecture and European Financial Architecture? Fluctuation in global crude oil market is another issue. In view of US sanctions against Iran, how can payment be made to Iran? These are some of the nagging issues before the world leaders at the G20 summit in Buenos Aires. WTO & Protectionism The multilateral trading system is at stake with no forward movement in WTO negotiations, with developed countries resorting to protectionist measures. The US has imposed high tariffs on steel and aluminium imports and is planning to do the same for auto-parts imports. It has sorted out the issue with South Korea, Canada and Mexico, but its trade war with China still continues with the latter retaliating with similar measures. The Trump Administration has vetoed appointments to the Dispute Settlement Body of the WTO and DSB is thus facing an existential threat. The multilateral trading body is yet to resolve issues of data security, IPRs and e-commerce. Keeping in view the challenges before the world leaders, the 13th G20 Summit in Buenos Aires on November 30-December 1 in has stressed upon building consensus for fair and sustainable development. In June 2018, the national ministers of G20 countries released a ‘consensus statement’ on energy transitions that seek greater transparency and fair and sustainable development. Building Consensus The Argentina presidency believes that the world has changed very fast this year, and we need to address these changes through consensus. It has stressed on the importance of coordinated work between the two tracks – sherpas and finance ministers who were present at all run-up meeting to the Summit. Argentina has forged its vision for the future on the basis of agreement reached between leaders of G20 in Hamburg in 2017 to promote greater inclusiveness, fairness and equality in pursuit of economic growth and job creation.