The G20 New Delhi Leaders’ Declaration for sure, is a stupendous achievement to look forward to in multiple shades of public policy and international affairs. The most notable aspect of this Declaration, is that this declaration was accepted without any separate statements, and exceptions. Nevertheless, the legal and policy issues, on which this declaration reflects consensus, is truly an interesting achievement to look forward to.
The most interesting and relevant issues addressed in the G20 New Delhi Leaders' Declaration, in the context of committing to innovative law & policy practices, were the following:
Unlocking Trade for Growth (page 4)
Strengthening Global Health and Implementing One Health Approach (page 8)
Finance-Health Collaboration (page 10)
Culture as a Transformative Driver of SDGs (page 11)
Macroeconomic risks stemming from climate change and transition pathways (page 12)
Designing a Circular Economy World (page 13)
Delivering on Climate and Sustainable Finance (page 15)
Reforming International Financial Institutions (page 19)
Managing Global Debt Vulnerabilities (page 21)
Building Digital Public Infrastructure (page 22)
Crypto-assets: Policy and Regulation, Central Bank Digital Currency & Fostering Digital Ecosystems (page 23)
Harnessing Artificial Intelligence (AI) Responsibly for Good and for All (page 24)
International Taxation (page 24)
This quick explainer on the G20 Delhi Declaration, takes a law & policy outlook on the G20 Delhi Declaration, with a perspective for law professionals and scholars as well.
The Significance of the G20 Delhi Declaration & its Consensus
The G20's Delhi Declaration ushers in an era considered momentous in the annals of history, emphasizing that the decisions made today by this global consortium will profoundly impact both humanity and the planet. This assertion, far from mere diplomatic rhetoric, underscores the paramount significance of this juncture, encapsulating the essence of India's remarkable accomplishment.
Before delving into the substantive facets spanning various domains, the comprehensive agreement reached unanimously by all 20 member nations serves as a preamble, outlining the multifaceted political, economic, and environmental challenges that have ensnared our world. Significantly, this preamble elucidates India's pivotal role in safeguarding the interests of the global South, comprising the marginalized within the international order, as well as the impoverished and vulnerable populations within both affluent and less affluent nations. In this context, the text elucidates a set of well-defined principles and priorities.
The most striking part of the Declaration is depicted as follows:
Together we have an opportunity to build a better future. Just energy transitions can improve jobs and livelihoods, and strengthen economic resilience. We affirm that no country should have to choose between fighting poverty and fighting for our planet. We will pursue development models that implement sustainable, inclusive and just transitions globally, while leaving no one behind.
Under the Indian presidency's stewardship, a resolute commitment has been made to avoid any trade-off between combatting poverty and addressing the pressing climate crisis. The document's overarching themes encompass fostering economic growth, rejuvenating the pursuit of sustainable development goals (SDGs), combatting the climate emergency, preparedness for health crises, reforming multilateral development banks (MDBs), grappling with the debt crisis, expanding digital public infrastructure (DPI), job creation, narrowing the gender gap, and amplifying the voice of the global South. These themes serve as the guiding principles and the very essence of the document.
Unlocking Trade for Growth
The declaration begins by highlighting the global economic situation. It mentions that global economic growth is currently below its long-term average and is characterized by unevenness.
There is considerable uncertainty about the future outlook.
The global financial conditions have tightened, which raises concerns about increased debt vulnerabilities.
Persistent inflation and geoeconomic tensions are further contributing to uncertainties.
The overall risk assessment indicates a tilt towards the downside.
The text emphasizes the need for a coordinated approach to address these challenges. It suggests using various policy tools, including monetary, fiscal, financial, and structural policies, to promote economic growth, reduce inequalities, and maintain macroeconomic and financial stability. There is a recognition of the importance of cooperation among nations to achieve the 2030 Agenda for Sustainable Development.
The text also highlights the importance of flexibility and agility in policymaking, citing examples of recent banking turbulence and how swift actions helped stabilize financial systems. It commends the Financial Stability Board (FSB), Standard Setting Bodies (SSBs), and certain jurisdictions for their efforts in examining lessons from banking turbulence and encourages them to continue this work. The use of macroprudential policies is endorsed to mitigate downside risks. Central banks' commitment to price stability and inflation control is stressed, along with the importance of clear communication of policy stances. The independence of central banks is deemed crucial for maintaining policy credibility.
There's a commitment to prioritize temporary and targeted fiscal measures to protect vulnerable populations while ensuring medium-term fiscal sustainability. Supply-side policies that boost labor supply and enhance productivity are recognized as important for economic growth and inflation control. Also, the exchange rate commitment made in April 2021 by Finance Ministers and Central Bank Governors is reaffirmed.
On trade and multilateralism, the text emphasizes the importance of a rules-based, non-discriminatory, fair, open, inclusive, equitable, sustainable, and transparent multilateral trading system, with the World Trade Organization (WTO) at its core.
It reaffirms the commitment to ensure fair competition and discourage protectionism and market-distorting practices to create a favorable trade and investment environment.
There's a call for WTO reform through an inclusive member-driven process, including the improvement of the dispute settlement system by 2024.
The text acknowledges challenges faced by Micro, Small, and Medium-sized Enterprises (MSMEs) in accessing information and supports efforts to enhance MSMEs' access to information to promote their integration into international trade.
It welcomes the adoption of a Generic Framework for Mapping Global Value Chains (GVC) to identify risks and build resilience.
The High-Level Principles on Digitalization of Trade Documents are endorsed, with efforts to encourage implementation.
Trade and environment policies should be mutually supportive, consistent with WTO and multilateral environmental agreements.
The importance of the WTO's 'Aid for Trade' initiative for developing countries, especially Least Developed Countries (LDCs), is recognized, and efforts to mobilize resources for it are welcomed.
This even gets interesting since the European Union did not express any discontent to this part of the text, considering their trade-related issues with India on their Carbon Border Adjustment Mechanism. The EU's CBAM is designed to tackle carbon leakage, which occurs when industries relocate to regions with less stringent climate policies, thereby undermining global efforts to combat climate change. CBAM aims to impose tariffs on carbon-intensive imports into the EU, ensuring that imported goods meet environmental standards similar to those imposed on domestic production. While the EU sees CBAM as a means to level the playing field and promote environmental sustainability, some trading partners, including India, have expressed concerns about its impact on global trade and the potential for discrimination.
CBAM to impact between 15% and 40% of India’s annual steel exports which are made to Europe; failure to reduce the carbon footprint may result in lower profits in EU markets, and a possible loss of market share in Europe for Indian mills.
Starting from October 1, 2023, and extending until December 31, 2025, the transitional phase of the Carbon Border Adjustment Mechanism (CBAM) will necessitate only quarterly reporting on the greenhouse gas emissions associated with specific products imported into the European Union (EU). These reports will encompass both direct and indirect emissions. Nevertheless, commencing in 2026, the acquisition of CBAM certificates will become obligatory to account for greenhouse gas emissions. The cost of these certificates will be tied to carbon prices established within the framework of the EU Emissions Trading System (ETS). As a consequence, CBAM will introduce an additional expense for exporters or producers targeting the EU market, with this cost-sharing arrangement having the potential to influence their marketing strategies. It is anticipated that other nations may also consider implementing policies akin to CBAM.
The implications of the Carbon Border Adjustment Mechanism (CBAM) for India will be contingent upon the carbon footprint of the goods being exported and the availability of substitutes with lower emissions in the European Union (EU) market. Products with elevated carbon emissions are likely to face increased fees, potentially diminishing their competitiveness. However, if there are no eco-friendly alternatives to Indian exports within the EU market, the impact of CBAM on India's exports may be somewhat restricted.
A significant hurdle for India lies in the absence of an emissions trading system akin to the EU's Emissions Trading System (ETS). The absence of such a system could pose challenges for Indian enterprises in demonstrating that their products are manufactured using low-carbon technologies, potentially resulting in higher CBAM costs.
To sustain competitiveness in the global market and alleviate the effects of CBAM, India must institute a mechanism for pricing carbon and cultivate low-carbon technologies. This proactive approach will enable Indian businesses to adhere to CBAM regulations while concurrently reducing the carbon emissions associated with their products. Furthermore, India should reevaluate its export strategy and explore alternative markets where its products can maintain competitiveness, even in the face of CBAM's impact in the EU market.
Considering the G20 Delhi Declaration, it would be interesting to notice how this goes.
Strengthening Global Health and Implementing One Health Approach
Here are the important excerpts from the declaration on Global Health and One Health Approach, which may interest law professionals:
Look forward to a successful outcome of the ongoing negotiations at the Intergovernmental Negotiating Body (INB) for an ambitious, legally binding WHO convention, agreement or other international instruments on pandemic PPR (WHO CA+) by May 2024, as well as amendments to better implement the International Health Regulations (2005).
Support the WHO-led inclusive consultative process for the development of an interim medical countermeasures coordination mechanism, with effective participation of LMICs and other developing countries, considering a network of networks approach, leveraging local and regional R&D and manufacturing capacities, and strengthening last mile delivery. This may be adapted in alignment with the WHO CA+.
Not so long ago, India had agreed to the recent changes to the International Health Regulations, proposed by the United States. There has been minimal public awareness or discussion regarding the significant alterations to the International Health Regulations (IHR), despite the WHO Secretariat's distribution of the US proposal in January 2022 to state parties. The US proposal stands in contrast to a report issued by the WHO Director-General in November 2021, which outlined some of the amendments now presented by the US. This report also indicated that the IHR would not undergo renegotiation, sparking concerns about the amendment process.
The attention given to the US-proposed amendments was further overshadowed by the buzz surrounding the commencement of negotiations for a new treaty on pandemic preparedness and response by 2024. This treaty's scope, content, and ultimate outcome had remained uncertain, as did its relationship with the existing legal framework of the IHR. Here is an excerpt from an article by Dr Silvia Behrendt and Dr Amrei Müller for EJIL! Talk, which explains the US-proposed amendments and their overarching effect.
Finally, the US amendments propose to reduce the time during which state parties to the IHR can reject, or enter reservations to, future IHR amendments that were adopted by a simple majority of the WHA from 18 months to six months (proposed US amendments to Article 59 IHR). Thus, in future, if states do not opt out within six months, amendments enter into force for them automatically in line with Article 22 WHO Constitution and the amended Article 59 IHR. This leaves states rather limited amount of time thoroughly evaluate the legal and practical implications of IHR amendments, including for their domestic health policies and budgeting.
Interestingly, India's agreement to the proposed changes by the United States, comes in line with the 9-point plan proposed by the Ministry of Health and Family Welfare. Here are some excerpts from the plan, which helped a lot in making WHO as a multilateral body, and the IHR system pragmatic in its purpose of governance:
It is important to devise objective criteria with clear parameters for declaring PHEIC. It should also be possible for DG WHO to declare a PHEIC if in his/her assessment there is a broad agreement, though not a consensus, within the IHR Emergency Committee and not to wait for a consensus to emerge. The emphasis must be on transparency and promptness in the declaration process.
There is no framework or mechanism to ensure that the details on funding & financing are disclosed at a micro level which is a crucial element. There should be a quarterly review of ongoing WHO activities in the country by Member States with the WHO Country Office so as to align expenditure by WHO in consonance with country priorities.
It is important that the member States have a greater say in the functioning of the WHO, given that it is the States which are responsible for implementation on ground of the technical advice and recommendations coming from the WHO.
The final amendments to the IHR, interestingly, make it clear that countries will be able to submit reservations on PHEICs accordingly.
Finance-Health Collaboration
The part on Finance-Health Collaboration in the declaration highlights the significant collaboration between finance and health ministries within the Joint Finance and Health Task Force (JFHTF). This collaboration is of paramount importance for several reasons:
Strengthening Global Health Architecture: The collaboration underscores the commitment of G20 nations to fortify the global health architecture, specifically for pandemic prevention, preparedness, and response. This is a critical step in light of the ongoing and potential future public health crises.
Economic Vulnerabilities and Risks Assessment: The reference to the Framework on Economic Vulnerabilities and Risks (FEVR) and the initial report arising from collaboration between the World Health Organization (WHO), World Bank, IMF, and European Investment Bank (EIB) signifies the recognition of the intertwined nature of health and economic well-being. It acknowledges that pandemics pose significant economic risks, and it highlights the importance of assessing these risks comprehensively.
Country-Specific Considerations: The commitment to considering country-specific circumstances in assessing economic vulnerabilities and risks due to evolving pandemic threats demonstrates a nuanced approach. This recognizes that the impact of pandemics can vary widely among nations and regions.
Best Practices and Financing Mechanisms: The text emphasizes the importance of sharing best practices in finance-health institutional arrangements during COVID-19. This knowledge exchange can improve readiness for future pandemics. Additionally, it acknowledges the need for optimizing and better coordinating financing mechanisms to respond promptly and efficiently to pandemics, indicating a focus on practical solutions.
Pandemic Fund and Donor Support: The mention of the Pandemic Fund and the forthcoming Call for Proposals highlights the commitment to creating financial mechanisms for pandemic response. Encouraging new donors and co-investment underscores the importance of broad-based financial support for addressing global health challenges.
Accountability and Reporting: The call for the Task Force to report back to Finance and Health Ministers in 2024 underscores the accountability and commitment of G20 nations to making tangible progress in strengthening global health systems and addressing the economic implications of pandemics.
Culture as a Transformative Driver of SDGs
The part on Culture & SDGs, which emphasises the significance of culture as a transformative driver of Sustainable Development Goals (SDGs), carries several key points of significance:
Recognition of Culture's Intrinsic Value: The declaration underscores the intrinsic value of culture as a force that can drive transformative change. This recognition goes beyond viewing culture solely as a form of artistic expression; it acknowledges its profound influence on societal development and progress.
Inclusion of Culture as a Standalone Goal: The call for including culture as a standalone goal in future discussions on a post-2030 development agenda is noteworthy. It indicates a broader recognition of culture as a fundamental dimension of sustainable development, reflecting its potential to contribute to various aspects of society, from social inclusion to economic growth.
Fight Against Illicit Trafficking: The commitment to combat illicit trafficking of cultural property at different levels—national, regional, and international—is vital. This reflects the acknowledgment of the importance of preserving cultural heritage and returning it to its countries and communities of origin. This commitment is aligned with international efforts to safeguard cultural artifacts and combat their illegal trade.
Strengthening Cultural Diplomacy: The emphasis on strengthening cultural diplomacy and intercultural exchanges underscores the role of culture in fostering mutual understanding and cooperation among nations. It reflects the belief that cultural dialogue can contribute to peace and global harmony.
Protection of Living Cultural Heritage: The declaration highlights the need to protect living cultural heritage, including intellectual property. This recognition is significant in the context of contemporary challenges, such as over-commercialisation and misappropriation of cultural elements. It acknowledges the potential negative impact of such practices on the sustainability and livelihoods of practitioners and Indigenous Peoples.
In summary, this text reflects a multifaceted perspective on culture's role in sustainable development. It underscores culture's intrinsic value as a driver of positive change, its significance as a potential standalone goal in future development agendas, and the importance of preserving and protecting cultural heritage. It also recognizes the need to address contemporary challenges related to cultural practices and intellectual property.
Macroeconomic risks stemming from climate change and transition pathways
This part addresses macroeconomic risks associated with climate change and transition pathways, and carries significant importance in several aspects:
Recognition of Macroeconomic Costs: The text acknowledges the substantial macroeconomic costs linked to the physical impacts of climate change. This recognition is crucial as it underscores the economic implications of environmental challenges, reinforcing the idea that climate change is not just an environmental issue but a core economic concern.
Cost-Benefit Analysis: The declaration emphasizes that the cost of inaction in the face of climate change far exceeds the cost of implementing orderly and just transitions. This cost-benefit analysis highlights the economic rationale for taking proactive measures to address climate-related risks and adopt sustainable practices.
International Dialogue and Cooperation: The emphasis on international dialogue and cooperation, particularly in finance and technology transfer, reflects the recognition that climate change is a global challenge requiring collaborative solutions. This aligns with the principle of shared responsibility and underscores the importance of nations working together to address climate issues.
Assessing Macroeconomic Impacts: The declaration stresses the need to assess and account for the short, medium, and long-term macroeconomic impact of both climate change and transition policies. This holistic approach recognizes that climate actions can have ripple effects on various economic factors, including growth, inflation, and employment.
Commitment to Further Work: The text expresses a commitment to consider further work on the macroeconomic implications of climate change and transition policies, particularly concerning fiscal and monetary policies. This forward-looking stance demonstrates a willingness to adapt economic policies to address climate-related challenges effectively.
Designing a Circular Economy World
This part, which focuses on designing a circular economy world, carries several significant implications:
Decoupling Economic Growth from Environmental Degradation: The text acknowledges the need to decouple economic growth from environmental harm. This is a crucial recognition that the traditional model of economic development often comes at the cost of natural resources and ecological damage. By emphasizing the importance of decoupling, the declaration signals a commitment to pursuing economic growth in a more sustainable and environmentally responsible manner.
Promoting Sustainable Consumption and Production: The acknowledgment of the critical role played by circular economy principles, extended producer responsibility, and resource efficiency underscores a commitment to reshaping the way products are designed, produced, and consumed. This shift towards sustainable consumption and production patterns is essential for reducing environmental impact and conserving resources.
Launch of Resource Efficiency and Circular Economy Industry Coalition (RECEIC): The launch of RECEIC under the Indian presidency signifies a concrete step towards fostering international collaboration and cooperation in promoting circular economy practices. This coalition is expected to serve as a platform for knowledge sharing, policy development, and innovation in resource efficiency and circular economy initiatives.
Commitment to Environmentally Sound Waste Management: The commitment to enhance environmentally sound waste management aligns with global efforts to reduce waste and minimize its environmental impact. It signals a recognition that waste management practices need to be improved to prevent pollution and resource depletion.
Substantial Waste Reduction by 2030: The goal of substantially reducing waste generation by 2030 is both ambitious and significant. It demonstrates a commitment to setting specific targets and timelines for reducing waste, which is essential for achieving sustainability goals.
Zero Waste Initiatives: The highlighting of zero waste initiatives underscores a commitment to minimizing waste generation and promoting recycling and reuse. Zero waste principles aim to reduce waste to landfills and incineration, emphasizing sustainable resource management.
It is therefore interesting to notice how the Government of India pushed the initiative of circular economy, as the Scandinavian countries, couldn't. Of course, the Scandinavian economic model cannot be superimposed on the Global South and the rest of the world.
Delivering on Climate and Sustainable Finance
Some notable achievements on Climate and Sustainable Finance under the Indian Presidency are described as follows:
Recognition of Climate Finance Importance: The declaration recognizes the crucial role of finance in addressing climate change. It acknowledges that substantial financial resources are required to achieve climate goals under the Paris Agreement, emphasizing the need to align financial flows with climate objectives.
Scaling Up Sustainable Finance: The text emphasizes the importance of scaling up sustainable finance, including through blended financial instruments and risk-sharing facilities. This indicates a commitment to mobilizing both public and private capital for climate adaptation and mitigation efforts.
Transition Finance Framework: The reference to the Transition Finance Framework signifies a structured approach to transitioning toward a more sustainable financial system. It highlights the need to align financial activities with environmental and climate goals.
Support for Developing Countries: The declaration acknowledges the significant financial needs of developing countries to implement their Nationally Determined Contributions (NDCs) and transition to clean energy technologies. It reiterates the commitment to mobilize climate finance of USD 100 billion per year by 2025 to support developing countries.
Loss and Damage Funding: The commitment to establishing a fund to respond to loss and damage from climate change for particularly vulnerable developing countries is noteworthy. This reflects a recognition of the disproportionate impact of climate change on these nations and a commitment to assist them.
Collective Quantified Goal (NCQG): The call for setting an ambitious, transparent, and trackable New Collective Quantified Goal (NCQG) of climate finance in 2024, starting from USD 100 billion per year, demonstrates a commitment to clear and measurable targets for climate finance.
Adaptation Finance: The urging of developed countries to double their provision of adaptation finance by 2025 emphasizes the need to support vulnerable nations in adapting to climate change impacts.
Role of Financial Institutions: The acknowledgment of the vital role of private climate finance, alongside public finance, underscores the importance of leveraging both public and private sectors to fund climate projects.
Reforming International Financial Institutions
Now, in the context of International Law, and multilateral financial institutions, the part on international financial institutions, especially the Multilateral Development Banks (MDBs), is one of the most significant law & policy achievements under the Indian Presidency.
Recognition of the 21st Century Challenges: It acknowledges that the 21st century presents unique challenges, including the scale of need and depth of shocks facing developing countries. This recognition reflects an understanding that the global economic landscape is evolving, and traditional development finance systems need to adapt accordingly.
Enhancing Multilateral Development Banks (MDBs): The declaration highlights the commitment to improving MDBs by enhancing their operating models, responsiveness, accessibility, and financing capacity. This signifies a recognition of the central role that MDBs play in mobilizing resources for development, especially in developing countries.
Scaling Up Development Financing: The reference to moving from "billions to trillions" of dollars for development underscores the ambition to scale up financing significantly. This reflects the urgency of addressing global challenges such as poverty reduction, infrastructure development, and climate change.
Voice and Representation of Developing Countries: The emphasis on enhancing the representation and voice of developing countries in global international economic and financial institutions is crucial. It acknowledges the need for a more inclusive and equitable decision-making process, ensuring that the interests and perspectives of developing countries are considered.
Maximizing Development Impact: The overall goal of these reforms is to maximize the development impact of international financial institutions. This includes addressing poverty, addressing global challenges, and ensuring that development financing is effectively utilized to achieve meaningful outcomes.
Review of Capital Adequacy Frameworks (CAFs): The text mentions the G20 Roadmap for Implementing the Recommendations of the G20 Independent Review of MDBs' Capital Adequacy Frameworks (CAFs). This roadmap outlines a comprehensive plan to enhance the financial capacity and effectiveness of MDBs. The endorsement of this roadmap signifies a commitment to its ambitious implementation.
Safeguarding Financial Sustainability: The text emphasizes the importance of implementing these reforms within the MDBs' governance frameworks while safeguarding their long-term financial sustainability. This reflects a balanced approach that ensures that the reforms do not compromise the financial stability and credibility of these institutions.
Progress and Collaboration: The text acknowledges the progress made by MDBs in implementing CAF recommendations, including redefining risk appetite and fostering financial innovation. It highlights the collaborative efforts among MDBs in areas such as data sharing (Global Emerging Markets or GEMs data) and future collaboration prospects in hybrid capital, callable capital, and guarantees.
Transparency and Accountability: There is an emphasis on transparency and accountability through enhanced dialogue between MDBs, Credit Rating Agencies, and shareholders. This demonstrates a commitment to open communication and clear exchange of information related to the reforms.
Estimated Lending Headroom: The text mentions that the initial CAF measures, including those under implementation and consideration, could potentially lead to an additional lending capacity of approximately USD 200 billion over the next decade. This figure underscores the financial impact of the reforms and their potential to significantly increase development financing.
Evolution of MDBs: The text calls for comprehensive efforts by MDBs to evolve their vision, incentive structures, operational approaches, and financial capacities. This indicates a recognition that MDBs must adapt to address a wide range of global challenges, including the Sustainable Development Goals (SDGs), while staying consistent with their mandates.
Managing Global Debt Vulnerabilities
On Global Debt Vulnerabilities, the following aspects addressed in the Declaration, seem quite plausible:
Focus on Debt Vulnerabilities: It emphasizes the importance of addressing debt vulnerabilities in low and middle-income countries. This recognition acknowledges the challenges these countries face in managing their debt burdens, which can hinder their economic growth and development.
Commitment to Common Framework: The text reaffirms the commitment to the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI). This framework provides a structured approach to addressing debt challenges, and the G20's commitment to its implementation is crucial for providing debt relief to eligible countries.
Resolution for Specific Countries: The declaration highlights specific countries such as Zambia, Ghana, Ethiopia, and Sri Lanka, where debt situations are of concern. The G20's call for swift resolutions in these cases underscores its commitment to assisting countries in distress.
Global Sovereign Debt Roundtable (GSDR): The reference to the GSDR demonstrates an effort to enhance communication and understanding among key stakeholders involved in debt treatments. This collaboration is essential for coordinating effective debt relief efforts.
Debt Transparency: The text acknowledges the importance of debt transparency and encourages all stakeholders, including private creditors, to contribute data. This transparency is crucial for assessing the debt situation accurately and making informed decisions regarding debt treatments.
Voluntary Contributions: The mention of private sector lenders contributing data voluntarily to the joint Institute of International Finance (IIF)/OECD Data Repository Portal is noteworthy. It reflects a cooperative effort to provide comprehensive information for debt assessments.
Building Digital Public Infrastructure
Since India is a leader in enabling Digital Public Infrastructure, the points agreed by the G20 on enabling a Global DPI Repository, are certainly noteworthy:
Emphasis on Digital Public Infrastructure: The text recognizes the critical role that safe, secure, and inclusive digital public infrastructure plays in fostering resilience, enabling service delivery, and driving innovation. This recognition underscores the importance of robust digital infrastructure as a foundation for economic growth and development.
Respect for Human Rights and Privacy: It emphasizes the need for digital public infrastructure to be respectful of human rights, personal data, privacy, and intellectual property rights. This commitment highlights the G20's dedication to ensuring that digital advancements are made in a responsible and ethical manner.
G20 Framework for Systems of DPI: The reference to the G20 Framework for Systems of Digital Public Infrastructure signifies the development of a structured approach to guide the development, deployment, and governance of DPI. This framework provides a common set of principles for G20 members to follow, ensuring consistency and alignment in their digital infrastructure efforts.
Global Digital Public Infrastructure Repository (GDPIR): The acknowledgment of India's plan to establish a Global Digital Public Infrastructure Repository is significant. This repository, comprising voluntarily shared DPI from G20 members and beyond, can serve as a valuable resource for countries looking to develop their own digital infrastructure. It promotes knowledge sharing and collaboration among nations.
One Future Alliance (OFA): The mention of the One Future Alliance (OFA) initiative demonstrates a commitment to building capacity and providing technical assistance and funding support for implementing DPI in low- and middle-income countries (LMICs). This initiative reflects the G20's focus on inclusivity and helping LMICs harness the benefits of digital infrastructure.
In summary, this text underscores the G20's recognition of the transformative potential of digital public infrastructure in various aspects of governance and economic development. It outlines a framework, repository, and initiative aimed at promoting responsible and inclusive digital infrastructure development while respecting human rights and privacy.
Crypto-assets: Policy and Regulation, Central Bank Digital Currency & Fostering Digital Ecosystems
We congratulate Tanvi Ratna, and her team at Policy 4.0, for their recommendations on Crypto-assets being integrated in the G20 Delhi Declaration.
Recognition by Global Regulators and SSBs: Policy 4.0's foundational work on understanding interdependencies in crypto-assets gained recognition and traction from major global regulators and standard-setting bodies (SSBs).
Inclusion in FSB Recommendations: The fact that Policy 4.0's work is now part of Recommendation 8 of the 9 final Financial Stability Board (FSB) rules is a significant achievement.
Transparency and Safety in the Crypto Ecosystem: The implication of this rule is that it may lead to disclosures on systemically risky off-chain centralized finance (CeFi) activity. This disclosure requirement can enhance transparency and safety within the crypto ecosystem, benefiting not only CeFi but also decentralized finance (DeFi) and Web3 players. It aligns with the G20's emphasis on creating a comprehensive policy and regulatory framework for crypto-assets.
Here is an effective summarisation of the things agreed upon:
Acknowledgment of Crypto-Asset Risks: The G20 recognizes the fast-paced developments in the crypto-asset ecosystem and the associated risks. This acknowledgment reflects a proactive approach in understanding and addressing the challenges posed by the growing use of cryptocurrencies and digital assets.
Endorsement of FSB Recommendations: The G20 endorses the Financial Stability Board's (FSB) high-level recommendations for the regulation, supervision, and oversight of crypto-assets and global stablecoin arrangements. This endorsement signifies the importance of creating a regulatory framework to manage these assets effectively and protect consumers and financial stability.
Global Consistency in Regulation: The G20 calls for consistent global implementation of crypto-asset regulations to avoid regulatory arbitrage. This emphasis on global consistency aims to create a level playing field and prevent regulatory gaps that could be exploited by crypto-market participants.
Comprehensive Policy and Regulatory Framework: The mention of the IMF-FSB Synthesis Paper and Roadmap indicates a commitment to developing a comprehensive policy and regulatory framework for crypto-assets. This framework takes into account various risks, including those specific to emerging market and developing economies (EMDEs). It demonstrates the G20's intention to address issues such as money laundering and terrorism financing risks associated with cryptocurrencies.
Focus on CBDCs: The G20 acknowledges the potential macro-financial implications of CBDCs, particularly in the context of cross-border payments and the international monetary and financial system. This recognition suggests a growing interest in exploring the benefits and challenges of CBDC adoption on a global scale.
Engagement with International Organizations: The references to reports from the BIS Innovation Hub (BISIH) and the IMF indicate that the G20 is actively engaging with international organizations to gather insights and expertise on crypto-assets and CBDCs. This collaborative approach fosters a deeper understanding of these technologies and their potential impact.
Harnessing Artificial Intelligence (AI) Responsibly for Good and for All
The points on affirming Responsible AI ethics based on G7 Hiroshima & previous G20 meetings, purportedly, are reasonable and quite generic. There is nothing new offered in proposition. However, this may be a good form of embrace per se:
Global Embrace of AI: The G20 recognizes the rapid progress of AI and its potential to drive economic prosperity and digital expansion globally. This acknowledgment signifies the importance of AI in shaping the future of economies and societies worldwide.
Public Good and Responsible Use: The G20 emphasizes the need to leverage AI for the public good. It underscores the importance of deploying AI solutions responsibly, inclusively, and in a human-centric manner. This approach aligns with the goal of ensuring that AI technologies benefit all individuals and communities.
Protection of Human Rights: The text highlights the critical importance of protecting human rights when developing, deploying, and using AI. It emphasizes the need for transparency, fairness, accountability, and ethics in AI systems, addressing concerns related to biases, privacy, and data protection. This commitment reflects a dedication to safeguarding the well-being and rights of individuals in the AI era.
International Cooperation: The G20 emphasizes the significance of international cooperation and discussions on AI governance. This reflects the global nature of AI challenges and the need for collaborative efforts to establish common principles and standards for responsible AI development and deployment.
Reaffirmation of G20 AI Principles: The G20 reaffirms its commitment to the G20 AI Principles (2019), which provide a foundational framework for the responsible use of AI. This reaffirmation underscores the continuity of global efforts in promoting ethical and responsible AI practices.
Pro-Innovation Regulatory Approach: The G20 expresses a commitment to pursue a pro-innovation regulatory and governance approach to AI. This approach seeks to maximize the benefits of AI while acknowledging and mitigating the associated risks. It signifies a balanced perspective that encourages innovation while ensuring responsible AI use.
AI for Sustainable Development: The G20 recognizes the potential of AI in contributing to the achievement of Sustainable Development Goals (SDGs). This acknowledgment highlights AI's role in addressing global challenges, such as healthcare, education, and environmental sustainability.
International Taxation
The part on international taxation is noteworthy for its own reasons. However, none of them could be implemented in a short-term aspect for now. It would depend how it goes ahead, and would be delightful to be looked forward to.
Global Commitment to Tax Reform: The G20 reaffirms its commitment to achieving a globally fair, sustainable, and modern international tax system. This commitment reflects the recognition that the existing international tax framework needs to evolve to meet the challenges of the 21st century.
Two-Pillar International Tax Package: The text acknowledges significant progress on both pillars of the international tax package. Pillar One addresses the allocation of taxing rights, especially for digital businesses, while Pillar Two focuses on ensuring a minimum level of taxation for multinational corporations. This signals a concerted effort by G20 members to address tax challenges arising from the digital economy and international profit shifting.
Multilateral Convention (MLC): The reference to the MLC's text and the goal of preparing it for signature in the second half of 2023 underlines the commitment to multilateral cooperation in implementing tax reforms. The MLC is a crucial instrument for aligning tax rules across multiple jurisdictions.
Capacity Building for Developing Countries: The declaration recognizes the need for capacity building to help developing countries effectively implement the two-pillar international tax package. This commitment to support developing nations ensures that they can participate in and benefit from the evolving international tax framework.
Crypto-Asset Reporting Framework (CARF): The mention of CARF and amendments to the Common Reporting Standard (CRS) demonstrates the G20's recognition of the importance of addressing tax evasion and money laundering associated with crypto-assets. These measures aim to enhance transparency in the use of digital assets for tax purposes.
Global Forum on Transparency: The Global Forum's role in coordinating exchanges of tax-related information and the proposed timeline for CARF exchanges by 2027 signal a commitment to international tax transparency. This aligns with global efforts to combat tax evasion and enhance information sharing among tax authorities.
A Critical Perspective
Now that the key features of the G20 Delhi Declaration have been described, and the specific portions of interest have been discussed, here is a critical perspective on the achievements of this declaration, as far as the Indian presidency is concerned.
Merely agreeing to a declaration does not signify implementation. However, with the G20 Declarations, it is well-known that such declarations have a consultative and reflective value upon the frowning state of multilateral institutions and forums. Considering this, the G20 Delhi Declaration is a stupendous achievement - since there is set to happen a virtual edition of the G20 Summit (India) in November, before Brazil takes over the Presidency, and a 60-day timeline is proposed by India to ensure and see how much implementation of certain ideas proposed in the declaration could be done.
Insiders point out that if the Indian Presidency would have failed in achieving a proper declaration, as a consensus document of sorts, then it would have poorly reflected on the G20, and its member countries as well. If we look at the role of major powers, China and Russia avoided sending their Heads of State to the forum for their own reasons, owing to the Ukraine-Russia situation and diplomatic couture, since they knew India would get the largest share of credit for the Declaration. Interestingly, the Declaration benefits both Russia and China for political reasons or any aspect of global stability.
A lot of propositions in the declaration are overweight or broad - for example - on artificial intelligence and international taxation. However, the commitments underlined on debt restructuring, cryptocurrencies, CBDCs, virtual digital assets, climate finance, multilateral development banks and international health governance, are underrated, and must be appreciated.
The Declaration strikes a reasonable balance between the extremes of rules-based multilateralism and value-based multilateralism. It acknowledges a lot of abstract yet symbolic ideas (values-based) while remains rooted in reality on multiple issues with a procedural touch, and systemic credibility (rules-based).
The Peoples' Presidency argument posed by India is not overrated. However, except the Diplomatic and Ministerial meetings of the G20 in 2023, the rest of the events and meet-ups organised were full of hype, and rendered no significance to the Presidency. We can say that all the G20 Diplomatic and Ministerial Meetings were successful - while the engagement group meetings and the ancillary events were of no significance, except maybe of certain exceptions like the T20 (led by the Observer Research Foundation), the B20, the SAI20 (led by India's Comptroller and Auditor General), the Scientific Advisors Roundtable, the Startup20 and others.
This also shows that India had used enough goodwill, in good faith to at least make countries agree on values-based, rules-based and practice-based principles, and policy action points, to make sense at multiple levels. The Principle of Subsidiarity in International Law, was truly utilised by India to make its ambitious presidency successful via the G20 as a forum.