our resolve to promote growth and jobs," the G20 Leaders Declaration at the Los Cabos Summit stated on Tuesday, humanising an effort that since November 2008 has focussed on financial institutions, fiscal deficits, protectionism, trade…everything that’s to do with notions rather than humans.
But even as the global economic crisis remains where it was after the world collapsed on September 15, 2008 following the bankruptcy of Lehman Brothers — Eurozone on the verge of breaking up, the US barely crawling out of its Occupy movement and BRICS (Brazil, Russia, India, China and South Africa) teetering — all that the G20 has been able to offer is to collect leaders of the 19 largest economies of the world and EU, sit them together, get them to chat and spin catchy statements.
I’ve been tracking G20 since November 2008 when I accompanied Prime Minister Manmohan Singh to the Washington Summit and have watched developments from the inside. In the seven summits since then — London (April 2009), Pittsburgh (September 2009), Toronto (June 2010), Seoul (November 2010) and Cannes (November 2011) — each host country has tried to expand the scope of the gathering. While the London Summit sought a green and sustainable recovery, the Seoul Summit introduced climate change and corruption. Each leader has sought to leave his signature that broadens the G20 mandate. At this rate, a few more summits later, it could well take on the United Nations.
As far as signatures go, Mexican President Felipe Calderón's will have a longer shelf life, as he has turned the Los Cabos Summit into something more real and touchable than "economic crisis". At an abstract level, global economic growth is slowing down, with India showing a rather extreme fall, to 5.3% in the March 2012 quarter from 10.0% in March 2006 quarter, the lowest in nine years. As a result, we should find it comforting to see Calderón shift the focus of this gathering that commands 90% of global GDP to growth and jobs from risk and depression. But how far will India go to take a bite of that growth is a constantly-complexifying puzzle, given its internal political contradictions — the policy commitments given to G20, not withstanding (See graphics).
The Los Cabos declaration has stated the obvious — that without growth, there will be no jobs and without jobs any discussion about the global economy would be meaningless. In the context of India, this assumes far greater significance.
The slowing down of economic activity is just the starting point of a mushroom cloud that could explode in our face. The young population that we have been celebrating and seeking a "demographic dividend" out of is today knocking at the doors of politics, expecting jobs
and opportunities. So far, the politics of India seems unwilling to open these doors, paving the way for a demographic catastrophe. Will that change soon or will we have to wait for 2014 for the next general elections?
Stepping back, I see the G20 more as a high-profile weekend getaway that is best left to economists, social scientists, diplomats. The on-ground actions that this informal gathering requires in home countries has been found wanting — despite all talk, there is no meritocracy in the selection of the IMF or World Bank chiefs; it has not been able to control the rising trade protectionism since September 2008; income inequalities remain high across developed and developing nations alike. With so many digressions and distractions polluting it, the main agenda that re-energised G20 —to fight the economic crisis — seems to have lost its way. If we stick with jobs and growth, the world still has hope.
G20 now needs to stop becoming an ego massage for its leaders. Else, it would have outlived its utility.