Amid the projection of a third of the world economy will be in recession next year, the G20, being an economic grouping, can be a forum to brainstorm and see that there can be solution to the global economic problem, said the ministry of external affairs joint secretary (G-20) Mr Nagaraj Naidu Kaknaur after the conclusion of the first meeting of the Development Working Group in Mumbai.
‘’Last two years were impacted by COVID, lockdown as everything was shut down, and slowly the global economy is coming back, we have seen some green shoots. But at the same time there is some anxiety. Lot of reports are coming that there could potentially be a recession. If recession then things are going to go back. This is an opportunity for us to brainstorm and see if there is a solution to the global economic problem,’’ he said. ‘’You had a similar situation way back in 2008. All of us know that we had a great financial crisis as Lehman Brothers had sunk, nobody had heard about what are the credit debt obligations, you had an entirely different system of financial institutions coming up and credit ratings for practically junk bonds. Then you had the G20 come in, intervened and successfully brought the world out of crisis. We should see the current situation as an opportunity,’’ opined Mr Kaknaur.
Mr Kaknaur admitted that it is not an easy task but there are many bold ideas that will be put forward.
‘’The focus in G20 is depoliticisation of development initiatives. Our aim has to be ambitious otherwise it will not be able to do much. At the end of the day G20 operates on a consensus process. Everybody has to come together. It’s almost like Sabka sath Sabha Vishwas. Bringing consensus is very very difficult. G20 is a very influential group. We are able to get all countries on board and make some big decisions. It will be a huge achievement for India,‘’ observed Mr Kaknaur.
He said that the focus will be on consumption and production. ‘’Can there be a concept of smart consumption, can consumption be smarter, can it be informed consumption rather than wasteful consumption? Few delegates talked about the food wastage in the whole world so can we reduce food wastage? Cutting down food wastage is not a bad idea as cutting down food wastage, cutting down consumption is not antithetical to Development, not at all. Can consumption be smarter? Can we make better decisions as far as consumption is concerned? That is the main focus,’’ he noted.
Mr Kaknaur’s statement is important as the International Monetary Fund has said that the world economy was headed for “stormy waters” as it downgraded its global growth projections for next year and warned of a harsh worldwide recession if policymakers mishandled the fight against inflation. On the other hand, the World Bank Group David Malpass has said that the world economy is facing high inflation and slow growth at the same time. Even if a global recession is averted, the pain of stagflation could persist for several years unless major supply increases are set in motion.
