Multilateralism must still prevail in face of global problems

By Song Kyung-jin

The news of Joe Biden and Xi Jinping skipping the ASEAN Summit in Jakarta, Sept. 5-7 and of Xi's absence at the G20 Summit in New Delhi, Sept. 9-10, disappointed the world, which is already much fragmented. Biden and Xi will be represented by Kamala Harris and Li Qiang, respectively. Russia's Vladimir Putin will be absent, too. In allusion, the world is at a crossroads of crumbling multilateralism in need of more coordination and cooperation.

What is unfolding is going in the exact opposite direction of the theme of India's G20 presidency, "One Earth, One Family, One Future." The Chinese leader's decision not to attend the G20 Summit is deeply perturbing particularly after Xi and the India G20 Summit host Narendra Modi vowed to improve China-India relations at the BRICS Summit on Aug. 24 in Johannesburg for peace, stability and the development of the world and the region.

Much of the world was expecting a Biden-Xi bilateral meeting, with the hope that a breakthrough might be reached. Specifically, to global problems in order to boost the global economy and trade, stabilize global supply chains, drive down inflation and coordinate global responses to the climate crisis, among other issues.

With the absence of the leader of the world's second-largest economy, an agreed-upon Leaders' communique seems very unlikely. There has been enough of a precursor in the lead up to the G20 Summit of its seeming inability to produce a communique for the first time since its inception in 2008. A multitude of meetings in the Sherpa track and the Finance track along with various ministerial meetings have failed to produce communiques due to fragmentation among members on the Ukraine war and climate action.

It will certainly be a blunder not just to India, a country in the ascendancy, but also to the significant multilateral forum that brings both developed and developing countries together. The world will again question the relevance of the G20 as a global steering group.

By producing concrete deliverables in India, however, the G20 can again prove its relevance and usefulness. We need not yet lose a ray of hope completely but need to instill a sense of urgency to G20 leaders.

For example, the leaders should build upon their trade ministers' agreement on creating a G20 framework for mapping global supply networks to secure resilient and sustainable global supply chains. In this trying time of more frequent supply disruptions, the G20 global supply chain mapping will be very helpful in quickly assessing vulnerabilities and finding alternatives. The G20 framework must include members of the Global South where there are many critical minerals, for instance, for information sharing and management. Korea, a resource-poor country with high external dependency, should get involved proactively in the G20 framework from the initial phase of creation to management.

Another critical issue the G20 must take up is debt relief for low-income countries, mostly in the Global South. According to the World Bank, the external debts of low- and middle-income countries amounted to $9 trillion in 2022, a two-fold increase from that in 2010. China is the largest creditor country surpassing the G7 countries. Therefore, neither the G7 nor BRICS with expanded membership ― Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates ― is the most pertinent group to deal with debt relief for low-income countries. The G20 is the right platform. Thus, China's continued participation in the G20 is essential.

The G20 is discussing the quota reform of the International Monetary Fund (IMF) which the new BRICS group also called for. The new BRICS urged the reforms of the United Nations Security Council and the World Bank to reflect the changed economic power and realities. Calls for the reforms of these international organizations have been raised for decades, especially emphatically since the 2008 global financial crisis.

Korea, together with India and China, stands to gain the most from the IMF quota reform as it is under-represented. However, skepticism and conspiracy theories abound that the G20 will fail to agree on the quota reform as some do not want to see China gain an increase in quota share. India as the G20 Presidency should ensure that the G20 members will agree on a new quota reform and make it happen by the end of this year. If the G20 fails to do it, some other groupings will keep calling for it. It will effectively call the G20's effectiveness into question.

The world is still too big with one too many problems for one or a small number of countries to manage. So, there is no question that the G20 still holds its unique value in dealing with critical global problems. The question is how we make sure it works as a relevant multilateral grouping for peace and prosperity of the world. The India G20 Summit must produce some concrete commitments for delivery, if not a communique, to prove its unique value once again.

Dr. Song Kyung-jin (kj_song@hotmail.com) led the Institute for Global Economics (IGE), based in Seoul and served as special adviser to the chairman of the Presidential Committee for the Seoul G20 Summit in the Office of the President. Now, she is executive director of the Innovative Economy Forum.