The Global South – nations with developing, less developed or under-developed economies – will drive two-thirds of global economic growth, G20 Sherpa Amitabh Kant said Friday ahead of the summit to be held in Delhi next month. Highlighting India’s ‘unique position’ as it assumes presidency of the influential bloc, Mr Kant also spoke on the need to restructure financial institutions created under different geopolitical and economic conditions.
“… all growth is now going to come from Global South because demographics are young and dependency burdens are low. In next two decades, two-thirds will come from the Global South,” he said a summit of business leaders from G20 nations.
“And, if Global South is going to drive the global economy… because the population of the western part of the world will be aging and populations in India and other emerging markets will keep getting younger… you need resources to flow in here.”
“That will require multilateral (global) financial institutions to be restructured and redesigned. They were made in the post-World War II period… when there was no climate change and no SDG (sustainable development goal). Therefore these need to be changed… to confront climate change and bring in new instruments, like blended finance, first loss guarantees and credit enhancement to allow private capital to flow in to Global South nations.”
G20 Presidency Big Chance For India
Mr Kant also spoke about India hosting the G20 presidency, noting that it comes at a point when the world faces multiple challenges and gives New Delhi a ‘huge opportunity’.
“One-third of the world is in recession…. 75 nations face debt crisis… 100 million people have lost jobs… there is a food crisis, a fuel crisis and a climate crisis. And the geopolitical crisis in Europe (exacerbated by Russia’s war in Ukraine) continues for over a year-and-a-half.”
“But, in every crisis, there is a huge opportunity and, for India, this is an opportunity to do what Prime Minister (Narendra Modi) called for – to be inclusive, decisive, action-oriented and ambitious,” Mr Kant said.
He pointed out that India assumes presidency of the G20 when its own economy is on a strong upward trend. “… at a time when India has accelerated its pace of growth. India is the fifth largest economy in the world and, in 2027, will be the third largest,” the former Chief Executive Officer of government think-tank NITI Aayog said.
India To Focus On Global South At G20
India has made it clear that the focus of the G20 during its presidency will be on the Global South, which includes poor countries from Africa, Asia and South America.
Foreign Minister S Jaishankar said, as early as last year, that while it is understandable that some of this focus is on issues pertaining to the conflict in Ukraine, this could not obfuscate the real concerns and pain points of the Global South. He said there were countries who could not feed their people, are running short of fuel and had suffered over the past year.