The Strategist

Towards a more inclusive yet complex future: developments at the G20 summit

At the two-day summit in Delhi, members agreed to expand the G20 and welcomed the African Union into the group of leading industrialised and emerging countries. This gives emerging economies more influence but could lead to tougher negotiations in the future.

Sebastian Petric, LGT Senior FX Strategist
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10 minutes
Flags of G20 members
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At the recent G20 summit in Delhi, under India's leadership, notable steps were taken to bridge gaps between nations despite the obvious divisions highlighted by the absence of key figures such as Russia's Vladimir Putin and China's Xi Jinping.

A major achievement was the agreement to welcome the African Union as a permanent member of the G20, a move strongly advocated by India and supported by several countries including Brazil, Japan, and the US. This inclusion reflects a desire to represent a broader range of global interests, incorporating the views of both developed countries, represented by the G7, and emerging economies, represented by the BRICS.

Expansion of the G20 paves the way for reforms

However, the inclusion of the African Union in the G20 will pose challenges as finding common ground on contentious issues might become more difficult. At the same time, it signals a shift towards giving developing countries a stronger voice, a change that is widely seen as positive. This could pave the way for vital reforms in important financial institutions such as the World Bank and the International Monetary Fund (IMF), potentially leading to fairer global lending practices and helping countries in debt crises.

Indian Prime Minister Narendra Modi also played a central role in crafting a statement that recognised the plight of the people of Ukraine while carefully avoiding direct criticism of Russia. This nuanced approach sought to maintain a balanced view, considering different perspectives by keeping the focus on the critical situation without alienating any member state.

G21 could gain credibility

Despite criticism from Ukraine and Oxfam for failing to directly address some important issues, the summit succeeded in outlining plans for better financial cooperation in the coming decade. As India prepares to hand over the leadership to Brazilian President Luiz Inácio Lula da Silva, there is a growing sense of expectation for a G21 that is more inclusive, but potentially more complex, with a broader range of strategies to credibly address global issues, even if this may mean navigating through more complex situations.

In addition, there is a noticeable trend towards the formation of a variety of groups, alliances, and blocs in the global arena, each with their own specific agenda. This suggests that we are moving towards a dynamic but potentially fragmented future, with different alliances working towards specific goals, trying to unite different global perspectives while dealing with the complex world of international relations.

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