Senior Vice President, Global Initiatives, U.S. Chamber of Commerce
Coordinator, International Strategy & Global Initiatives, U.S. Chamber of Commerce
September 29, 2023
As the curtains descend on India’s G20 Presidency, the global business community can reflect on the G20 Summit with guarded optimism. Under India’s presidency, and with significant engagement by the United States and other nations, this year’s G20 identified several common areas where countries can look beyond geopolitical fault lines and policy disparities to seek better-coordinated responses to global market fragmentation.
Reaffirming the Role of the G20
Born out of financial crises, the G20 has once again proven itself as the preeminent platform for exchanging views on the most critical economic challenges facing the world’s largest economies. This year, a key decision made by the G20 was to admit the African Union as a full member of the G20+, affording the African Union the same status as the European Union. This is a recognition that the global economic future hinges on Africa’s inclusion in international policy making. By welcoming the relatively young African Union, the G20 also highlights the value that countries put on regional trade and economic integration to mitigate volatility and risks. This first ever expansion of G20 to G21 serves as an encouraging signal to private sector entities looking to tap into Africa’s economic potential.
Other Key Outcomes for Business from G20 India
Crucial Emphasis on Disaster Resilience:
The recent devastating earthquake in Morocco, which is set to be the first African host of the World Bank Annual Meetings in October 2023, struck on September 8 just as G20 leaders were concluding their talks for the day. The Morocco earthquake serves as another tragic reminder of the urgency for G20 coordination in reducing the impact of both natural and man-made disasters. The business community has been urging greater top-level coordination in disaster relief and response. India has delivered by enhancing global disaster resilience through the G20’s Development Working Group, the Sustainable Finance Working Group, the Environment and Climate Sustainability Working Group, the Infrastructure Working Group, and the Energy Transitions Working Group.
As the result of these deliberations across all the members, G20 has established a standing Disaster Risk Reduction (DRR) Working Group to develop and implement national policies that reduce risk today, build resilience for tomorrow, and better facilitate disaster risk reduction across the global financial system. As the world has painfully realized, disasters, natural or man-made, are not isolated events. They carry profound and lasting repercussions, inflicting sometimes catastrophic human costs and robbing nations of the fruits of their development. Recognizing this, the G20 leaders decided to move beyond rhetoric, demonstrating a commitment to pooling resources, knowledge, and strategies to counter these challenges in the form of the DRR Working Group. It will be up to Brazil and South Africa, the next two G20 chairs, to build on India’s momentum.
Trade Continuity and Inclusive Global Growth:
During the summit, leaders unanimously acknowledged the importance of fostering global trade continuity. Emphasizing the demerits of protectionism, they stressed the need for open, fair, and rule-based trade, especially in sectors such as agriculture. There was a consensus on enhancing supply chain resilience and digital trade collaboration. The G20 leaders’ renewed commitment to WTO reform and coordinated trade and environment policies exemplified a broader vision for sustainable trade. The understanding reached at the G20 Summit resulted in strong support for WTO during the recent 78th session of the UN General Assembly. The UN General Assembly Political Declaration, adopted on September 19, pledges to “recommit to the promotion of a universal, rules-based, non-discriminatory, open, fair, inclusive, equitable and transparent multilateral trading system, with the World Trade Organization (WTO) at its core, as well as meaningful trade liberalization.”
The G20 also publicly recognized the critical role of private enterprise in accelerating growth and driving sustainable economic transformations. To this end, they have pledged to work with the private sector to:
- Create inclusive, sustainable, and resilient global value chains, and support the desire or developing countries to ascend these value chain.
- Facilitate investments, including Foreign Direct Investments (FDIs), towards sustainable business models.
- Establish investment pipelines in developing countries by leveraging the expertise of multilateral development banks to mobilize investments.
- Promote the ease of doing business and minimize associated costs.
Infrastructure investment and partnerships for progress:
The G20 Summit was not solely about intra-G20 cohesion. The continuous engagement with the private sector, the emphasis on integrating technology and innovation into resilience strategies, and the formation of significant initiatives like the Partnership for Global Infrastructure and Investment (PGII) all underscore the potential for international collaboration. A more focused public-private collaboration has similarly been under way in the G7 talks in Japan, which launched the PGII. The Partnership held its first meeting with business earlier this year and aims to secure funding for critical infrastructure development, including roads, ports, bridges, and communication systems, with the overarching goal of enhancing global trade and economic cooperation. Also announced at the G20 leader’s event on PGII was the India-Middle East-Europe Economic Corridor (IMEC), which aims to boost economic development through enhanced connectivity and economic integration across the two continents.
Blueprint for the Future
The G20's roadmap advances a vision where businesses, governments, and institutions not only co-exist but also cooperate. Setting up credible mechanisms for businesses to be more directly involved, especially in areas like disaster risk reduction, beyond insurance issues, indicates the shifting paradigm.
With the handover of the ceremonial gavel from Prime Minister Modi to President Lula, the transition process for the G20 President's chair to the next round has been initiated. Brazil will officially assume the G20 Presidency on December 1, 2023, under the motto, "Building a fair world and a sustainable planet." The U.S. Chamber of Commerce stands ready to continue working with the government of Brazil to utilize its G20 presidency to advance common objectives and ensure the voice of the private sector is heard.
About the authors
Gary Litman, senior vice president of Global Initiatives at the U.S. Chamber of Commerce, is responsible for the Chamber’s policy advocacy for the economic reform agenda of the G20, G7, and international institutions. He leads the Chamber’s participation in a range of global business coalitions and related business summits focused on sustainable economic policies.