PM focus on growth, climate at G20
Prime Minister Narendra Modi arrived in Brisbane to a sticky 40 degrees Celsius on Friday for the G-20 summit, forewarning of the heat that the world's most powerful economic conclave is expected to generate over the weekend.india Updated: Nov 15, 2014 02:44 IST
Prime Minister Narendra Modi arrived in Brisbane to a sticky 40 degrees Celsius on Friday for the G-20 summit, forewarning of the heat that the world's most powerful economic conclave is expected to generate over the weekend.
The G-20 has struggled for coherence since the Pittsburgh summit, which had a single-point agenda of responding to the global financial crisis, because its members have gone their separate economic ways and its agenda has expanded to include trees, gender issues and so on.
India has a limited, if difficult, agenda and this includes:
India is doing better than the most even at an anaemic 5% annual rate. It positively shines given the G-20 target of 2% annual growth for five years. Expect Modi to list all the reforms that he has promised to pass in the coming parliamentary sessions: GST, FDI in insurance and labour reforms to name a few. He is in a better position to walk his talk given his electoral mandate.
The largest multinational companies pay just over 10% tax because of the convoluted way they move their profits around. The governments, India included, are working out a blueprint for reforming the global tax system. New Delhi will push for adoption of the BEPS (base, erosion and profit- shifting system) that says, crudely, where a firm's factory is rather than where its headquarters is will determine where it pays its taxes.
India has made its chances of winning support more difficult by opposing the arbitration clause of the original BEPS proposal. It will be crucial to see how many countries will back India's BEPS variant. New Delhi will also make a big squawk about "black money". The G-20 will perhaps stifle their yawns, introduce some nice phrases but do little.
The compromise deal between India and the United States that will give the former a food security clause in return for unblocking the trade facilitation agreement is now expected to be endorsed by the rest of the G-20, paving the way for the World Trade Organization to rubber stamp it later.
India's hard bargain put aside, it will be a nice-sounding "deliverable" for the Brisbane summiteers to add to their joint statement.
Australian Prime Minister Tony Abbott supposedly wants global warming to be limited to a single paragraph. Not surprising, considering his country is going to be the largest fossil fuel exporter in the coming decade. Modi takes climate change seriously but India will be happy if the US-China carbon agreement doesn't get too much play. Blind-sided by the US-China deal, thanks to a clueless Indian environment ministry, New Delhi will be under pressure to agree to similar climate strictures.
India wants the cost of remittances to be reduced. Makes sense because it is the world's largest recipient of remittances but it is not clear how the G-20 is involved in this.
New Delhi may sign up for Abbott's idea of setting up a "global infrastructure hub" in Sydney which would be a nice bilateral thing to do. India is signing for any infrastructure fund it can find and desperately needs infra-spending, so why not? India will join everyone in urging the US to hand over a few percentage points of its IMF and World Bank votes to emerging economies, as it had promised.
ALSO ON THE TABLE
Everyone will have a set of political grudges to settle. The Western countries plan to give Russia's Vladimir Putin a hard time. He is flexing his muscles too: two Russian warships are sailing off the coast of Australia. China and Japan may use the opportunity to not shake hands. None of this matters to India. Modi is the new kid on the global block so he has a great chance to sell the neo-Narendra narrative of India. He did it in the US, so why not on the Sunshine Coast?