Modak: 2024 – Brazil's G20 Year

Purvaja Modak, Associate Fellow, Centre for Social and Economic Progress
January 18, 2024

Brazil has taken over the presidency of the G20 from India on December 1, 2023, ushering in a troika with three member countries from the Global South (India, Brazil and South Africa) that also comprise of the IBSA. India was preceded by Indonesia in 2022, and beginning a four-year effort to prioritise the needs of the Global South at a time when the world faces difficult challenges like climate change, geopolitical turmoil, inequality and indebtedness. While Indonesia and India made some progress on negotiations on climate action, inclusion of the African Union in the G20 and the reform of multilateral development banks (MDBs), much more action is essential.

The onus is now on Brazil to take forward the global development agenda in 2024. The country has declared a three-point agenda, namely combating hunger, poverty and inequality; focusing on three dimensions of sustainable development (economic, social, and environmental); and the reform of global governance (G20 Brasil 2024). These topics have been chosen keeping the objective of reducing inequalities at the heart of the reform effort as is reflected in the motto of the Brazilian presidency, 'Building a Just World and a Sustainable Planet'.

Brazilian President Luiz Inácio Lula da Silva declared these priorities[1] at the Leader's summit in India in September 2023 when he took over the reins of the G20 presidency from Indian Prime Minister Narendra Modi. He emphasised the country's commitment to the fight against food shortages and nutritional insecurity. To that end, Brazil has proposed to launch a taskforce called Global Alliance against Hunger and Poverty during its 2024 presidency. The task force will work on issues like low-carbon agricultural research and farming insurance reforms, especially in food-insecure countries, with financing support from other nations. Brazil hopes to leverage its experience from its flagship programme, Brazil Without Hunger Plan (Plano Brasil Sem Fome) — an initiative led by its Ministry of Development and Social Assistance, Family and the Fight Against Hunger (Ministério do Desenvolvimento e Assistência Social, Família e Combate á Fome/MDS).

By focusing on sustainable development, the country hopes to convince the G20 member countries to increase their financial contributions to tackle climate change and wishes to leverage its own green energy potential for the world to invest in. To achieve this, Brazil has proposed a taskforce called Global Mobilization against Climate Change. The taskforce will promote a high-level dialogue among governments, financial institutions, and international organisations to enhance global macroeconomic and financial alignment to implement the goals of the United Nations Framework Convention on Climate Change and the Paris Agreement (G20 Brasil 2024).

By making the reform of global governance its third priority, Brazil hopes to encourage greater participation by emerging countries in the decisions of the World Bank and the International Monetary Fund. The World Trade Organisation (WTO) needs to be revitalised and its paralysed dispute settlement mechanism needs to start working again by reinstating a fully functional Appellate Body. The membership of the United Nations Security Council (UNSC) needs to be restructured to include more developing countries. The eagerness from various countries, to join the expanded BRICS is an indication of their wish to join a grouping from the Global South re-emphasises their call for the reform of the Bretton Woods institutions. Brazil can leave its imprint on the G20 by stirring discussions on the reform of the global governance architecture towards implementable consensus.

Brazil also hopes to advance the Indian G20 presidency's work in strengthening MDBs, by following through with the roadmap laid out in the G20 Independent Expert Group's (IEG) two volume-report[2], led by Lawrence Summers and NK Singh, that was aimed at creating 'bigger, better and bolder MDBs'. Some of the recommendations of the report were: scaling up financial capacity, boosting joint action on climate, enhancing country-level collaboration, strengthening co-financing, and deepening MDBs' ambition to cooperate to boost private capital mobilisation (World Bank, 2023). There is action on this agenda item already. At the IMF/World Bank Annual Meetings in Marrakesh, Morocco, in October 2023, 10 leading MDBs supported the IEG's report's recommendation to explore ways to expand their lending capacity with "an additional headroom of $300-400 billion in the next decade"[3] (African Development Bank Group, 2023).

In a first-time global leadership role of this stature, Brazil plans to execute its development mandate by convening[4] over 100 working group and task force meetings and over 20 ministerial meetings that will culminate in the Leader's summit on November 18-19, 2024 in Rio de Janeiro, Brazil. The National Commission for the Coordination of the Presidency of the G20 by Brazil has been set up to coordinate and oversee the smooth functioning of the G20 presidency and it is being chaired by Mauro Vieira, Brazil's Minister of Foreign Affairs, and Fernando Haddad, Brazil's Minister of Finance (G20 Brasil 2024).

Brazil has also introduced the G20 Social[5] to increase participation of non-governmental stakeholders in G20's activities and decision-making processes. The G20 Social comprises of 13 engagement groups of the G20, namely C20 (Civil society); T20 (Think tanks); Y20 (Youth); W20 (Women); L20 (Labour); U20 (Cities); B20 (Business); S20 (Science); Startup20 (Startups); P20 (Parliaments); SAI20 (Supreme audit institutions); J20 (Supreme courts) and O20 (Oceans) (G20 Brasil 2024).

The clock is ticking, and the stage is set for Brazil to make its mark on the G20 process by delivering outcomes brought about by multilateral consensus. Supporters of global governance are rooting for Brazil's success on its three-point development agenda, especially at a time when the world is facing a polycrisis and global negotiations and consensus building seem more far fetched than ever.

Brazil is faced with an ambitious agenda, and there are several challenges in its path. Brazil will need to manage the intense geopolitical divisions that currently exist in the G20's membership if it hopes to release joint statements and end the year with a comprehensive Leader's Declaration, a feat that India succeeded in achieving, despite acute scepticism from critics. The Brazilian presidency will have to keep the Israel–Hamas war, Russia's war in Ukraine, global sanctions and the ongoing frictions between the United States (US) and China at the centre stage and manage sensitivities as it leads the G20 discourse. Other than governmental negotiations, Brazil will have to use back-channel diplomacy through its groupings like the expanded BRICS grouping (that previously only included Brazil, Russia, India, China and South Africa) and through its strategic partnerships with neighbouring countries in South America. The BRICS now also includes Argentina, Ethiopia, Egypt, Iran, Saudi Arabia, and the United Arab Emirates (UAE). It will have to revitalise the IBSA to enable policy coordination between India, Brazil and South Africa. President Lula has an important role to play in balancing the powerplays emanating from these geopolitical interlinkages and divisions.

The next two years are a unique time for President Lula to exhibit to the world his leadership potential and Brazil's ability to lead the global governance discourse. It is interesting to note that Brazil's G20 summit will be held in the same month (November 2024) as the US elections. The summit will also overlap with COP29. Negotiations at COP29 will pave way for COP30 in 2025 in Belem, Brazil. Brazil will also chair the BRICS grouping in 2025. This will overlap with South Africa's G20 presidency in 2025, giving the troika of developing countries yet another chance to advance discussions on climate action, sustainability and development.

But what the troika needs is a serious infusion of well researched, action oriented and implementable policy ideas that can be tabled for the consideration of the G20 leaders. That is where global think tanks come in, sharing solutions to the world's most complex problems through one of the G20's official engagement groups, the Think20 network. The Think20 (T20), often referred to as the 'ideas bank' for the G20 is tasked with a crucial mandate this year under the Brazilian presidency, and that comes out clearly in its tag line for the year — 'Let's rethink the world'.

The T20 Brazil[6] process will fulfil its task through six task forces, whose recommendations, put forth in the form of policy briefs, will comprehensively address the three themes that President Lula has declared: 1) Fighting inequalities, poverty, and hunger; 2) Sustainable climate action and inclusive just energy transitions; 3) Reforming the international financial architecture; 4) Trade and investment for sustainable and inclusive growth; 5) Inclusive digital transformation; 6) Strengthening multilateralism and global governance.

The T20 Brazil process will then put forward policy recommendations to G20 officials involved in the Sherpa and Finance tracks and to the G20 leaders, in the form of a final T20 communiqué and the recommendations of the six taskforces.

With the support of the Think20 and a development mandate based on the needs of the Global South, Brazil will have to ensure that there is policy connectivity at the G20, for the group to be taken seriously and for its efforts to bear fruit. Having four emerging market economies as leaders of the G20 in a row, will surely make it easier. Else, as critics often say, the G20 will become a 'talk shop' or merely a global gathering of policymakers with no concrete or enforceable outcomes.

The stage is set, and an ambitious task has been laid out for Brazil. While the priorities for the year were released in 2023 when Brazil officially took on from India, action on the ground will unfurl in 2024. The G20 foreign ministers will meet[7] in Rio de Janeiro on February 21-22, 2024, followed by G20 finance ministers in Sao Paulo on February 28-29, 2024. The statements coming out of these two meetings will indicate whether Brazil will be able to bring back the concept of sustainable development to the centre stage of international discussions, especially since geopolitics, wars and regional powerplays have overtaken its mandate over the last few years. The stakes are high and now Brazil must lead the way in showing critics that the G20 is, not a talk shop and is in fact, the economic steering committee for the world, as it was intended to be at its inception.

Notes

References

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