On the eve of the G20 summit taking place in Buenos Aires, Information Department of the Embassy of the Russian Federation in India along with Russian News Agency “Rossiya Segodnya” organised a talk between New Delhi and Moscow on the subject “The Future of the world economy: Can G20 Mitigate Existing Contradictions?”
Taking part in the discussion, a speaker from India, Prof. Manoj Pant Director, Indian Institute of Foreign Trade, clarified that G20 seems to be an on and off forum which springs up when there is a problem with the global economy. He tried to suggest that the prevalence of trade in dollar or in any other currency cannot be a political decision. It is about the dominant economy. He put forward the view that international transactions shall always remain a factor of economic and political stability. He said trade in local currency in bilateral engagements may be fine but interestingly trade today is no more bilateral.
“Trade seems to be a bilateral affair but economic stability is a factor of multilateral engagement. Trump may not be an intelligent politician but he is a smart businessman. Countries need to come together to solve the political game unleashed by China and US. Reforming and reviving WTO architecture need to be another priority for G20,” Pant said.
Taking part in the discussion from Moscow, Prof Andrei Spartak Chairman, Committee for Economic Integration and Foreign Policy Activities of the Chamber of Commerce and Industry of the Russian Federation said stakes are very high now for the world economy as the world is witnessing a new wave of protectionism.
“This protectionist wave is affecting the global economy. It undermines the global interests. The trade war between China and the US is a major concern. If the international forums like G20 can help avert any further escalation in their trade war, it will be a very important development,” Spartak said.
Moving away from the dollar is a response to the global instability. We need some additional stability factor like reforms in WTO and we need to diversify, he added.
Professor Geethanjali Nataraj, Professor of Applied Economics, Indian Institute of Public Administration said G20 does not seem to be effective or have met any of its objective and everyone now seems tired of the whimsical policies of the US and it is natural for the countries to look for alternatives.
“De-dollarisation will not come through very quickly and may take a lot of time. In the trade war unleashed, both the parties have gone to loose, its only matter of time that the US will be isolated on the world economy if this goes on. Another challenge is the reinstating faith in multilateral forums like World Bank, IMF, UN, WTO seems very tough with the increasing trend of bilateral trade agreements,” Nataraj said.
She underlined that geopolitics will play a major role for India to decide in favour or against de-dollarisation while saying that the future engine of global economic growth will continue to be India and China.
Mikhail Ershov, Chief Financial Research Officer, head of the financial analysis, department of the Institute of energy and finance also agreed to the fact that the process of de-dollarisation will take a lot of time.
“Monopoly is not really a good thing. American economy looks overheated and meltdown like the 2008-09 may not be impossible at present time. We need to be ready with alternatives, more balanced the global economy is the more good it is for everyone,” Ershov said.