 Hello and welcome to Newsclick. We are going to discuss today the recent G20 summit and whether G20 has any relevance today. We have with us Rajat Nag, formerly of ADB and who is a, what shall we say, a global roving consultant on various issues. Rajat, good to have you with us. Good to be back. You have been with us an number of times earlier. I remember once itself of G20. Exactly. G20 was set up for essentially looking at economic issues and there was some suggestion if the globe really wants a setting of this kind. Why don't they set up an economic affairs committee under the United Nations? But this was really created as an informal club of the powerful. Does it have any relevance today? As a matter of fact, I think it has got even more relevance, particularly since we have got one key member of that group who doesn't believe in it. Because the issues for which it was set up, as you said, are really in the aftermath of the 2008 financial crisis. But the issues actually started with the N90s East Asian crisis. But it really didn't become G20 then. But it really sort of came to the fore during that 2008 financial crisis. And I think proved it's worth. But to go back to your question, I think G20 in a way is probably even more relevant. And I think one should look at what would have happened if it went there. The same question one asks about the UN. I mean, UN with all its problems, would the world be better without it? And the answer is no. So same with G20. But I think what G20 needs to think through, that it should not be seen just as the symbol of globalization. It should really start, as we were talking just before this show, what are the issues on globalization? Winners and losers, the incidence of benefits and costs, and who's going to compensate the losers? I think we probably assumed a few things away and made some heroic assumptions along the way. And those are the things which need to be thought through more with the rise of populism on the one side and the issues of globalization on the other. I'm going to play the devil's advocate here and say there was never an honest intention of getting countries to come together in 2008, 1990, and 1990's East Asian crisis. But really to see, well, the rich and economically powerful countries, particularly the western ones after the fall of Soviet Union, decided that they need to induct other middle ranking players, also emerging economies, and see whether they could put the burden of the crisis on them as well. 2008 was really a crisis of the western banking system, if you will. It wasn't a global crisis in that sense, because that was the core financial part of the global economic order. That of course had its impact on others as well. But it was really the western banks which were in a crisis. Now, what do we have to do with it? When you talk about the kinds of things you were saying, because in this 20, bulk of the countries who really got the worst of the globalization shall be, say, burdens, when you talk about the who has benefited, who has lost, the ones who have lost and not in the G20, by and large. By and large, what you have is the emerging economies as they are called, and there also is very selective. Saudi Arabia is there, Iran isn't there, Indonesia is there, Malaysia is not there. So in fact, even that was apparently decided in one meeting in which Germany, United States and a few others ticked some names and unticked certain other names and called it the G20. So why should this be the body and not a special body of the United Nations, say, which discusses these issues? And I'll tell you why I'm saying this, because United Nations, every country has a role. In G20, it's by invitation only, and who decides the invitation? As always, we have brought in too many points to respond to in any particular order, but I think the important thing is to be practical about it. Yes, you could certainly have the UN format with everybody having a vote, but then we know what happens, nothing. Okay, so when G20 was formed, it was basically as a follow on of the G8 or the G7, really G7 plus 1, and the feeling was... Which Russia had kicked out, so therefore, back to... But the point then was that the G8 increasingly recognized that they could sit and talk, but the countries which really mattered, the emerging economies, China being obviously one of them, India being the other, Indonesia, some of the important countries either in terms of the economies or in terms of population or both went there. So you have to expand it to make it a more meaningful dialogue. So yes, now how do you decide who will be in, who will not be in? But I think in an imperfect world is the best that could happen, and yeah, it can certainly be improved and it can certainly be expanded, but you've got to make sure that you don't expand to the point of becoming again a debating society. Now in the 2008-2009 crisis, and I happen to have been involved a bit on the side, I think that was the best part of the G20 format. The cause of the financial crisis I'm not getting into, this is not the place to discuss that, we've discussed it before, but I think G20 forum at that time actually took some fairly hard decisions, which made sure that the situation didn't get worse, at least we didn't have a global stabilize and all that, and obviously China I think was the country which really pulled its weight much more than others. But let me make a slightly larger point. The issue is countries like China, countries like India, are beneficiaries of globalization, but they also have to bear the burden of globalization. So you can't sort of, you know, say that you're going to be a part of the larger global scene and not take responsibility, excuse me. You can't sort of say you want to be part of a multipolar Asia, multipolar world and not be part of the dialogue. So for me, the important thing about the G20, and that's why I think it's even more relevant, because the issues coming out of globalization, the pluses and the minuses, actually have been exacerbated over the last few years. And they need to be discussed, debated, if not resolved. And G20 to me, imperfect as it is, is still a better forum than any others we have. At the moment. At the moment. And if you expand it to bring in other constituencies, it will become more representative. And I think there's a lot of merit in that. But my question will be, will it be workable? So we have got to think it through. I mean, I'm not an abashed supporter of G20. But what I'm saying is that we still need the international forums, which can dialogue all of this, particularly because you have a particular for a person who doesn't believe in it. That's where the others have to rally around to make it to make it work. We will come to this point, which you have raised now twice, right, that we have a person. And let's be very clear. This is the person who leads the most powerful military force on the world economy and the economy. As of date, it also controls the global financial architecture, because the dollar is the one which underpins a global financial system. Now, I specifically do not want to use the word economic, because I think what the United States has preponderance of is military and financial power. Economically, I think it's relatively weaker than what the financial and the military power is. But nevertheless, what you said, Trump, its president does not believe in the global system. What does he believe in? Does he just believe in that the United States of rich should run and every other country in the world should accept its neocolonial status? My feeling is that if it were that, at least we would know what he believes in. And then, you play your game theory options. But my own feeling is that even that is not very sure. So I really can't answer that question. I think Mr. Trump sort of believes in what he believes in at that moment. So therefore, it becomes very difficult to predict the response mapping that you would do. So for example, you're talking about this trade war, we're talking about issues with what's going to happen with India being off the list of the GSPs or sort of exempted for one doesn't know. And this is why, again, be it the EU, be it the G20, be it other WTO, for example, I think the other international organizations become even more important rather than sort of saying, look, we don't know what's going to happen. Therefore, we fold and go home. We had discussed earlier that WTO is currently the Moribund state. Because the dispute settlement body is not functional because the United States refuses to pass any candidate who would allow this body to have the numbers. WTO, the Paris climate accord, I mean, you name it, I mean, the issues, the public good issues of the global world. I would say the climate change, unfortunately, the United States is exactly the same record whether it's Trump or before. That's not quite so. It's much worse now. I'm going to give you the example. Kyoto Protocol, the United States was the one who was fully a party to this negotiation, never ratified. No, that's true. And it never really accepted it. Then when it came to the climate change discussions later in the Paris, they said, we have to start from 2000 something. We do not start with 1992 because we never signed it. So there is a longer, shall we say, history of the United States negotiating agreements, like in some others, and never finally ratified. That's true. And the Kyoto Protocol was not ratified by the U.S. Senate. That's all true. But it became much worse when Mr. Trump pulled out of the Paris climate accord. Because it was a bigger environmental crisis. But you see, the issue now with the U.S. and therefore the counter to that of international fora is that previously, and what you say about their position on the climate, and many others is true, at least you knew what was happening. And you knew that, okay, the administration supported, but maybe they didn't have the political mandate back home with the Senate or the House. Now even that is very uncertain. So that is what I mean. And therefore, the rest of the world has to sort of, you know, keep their heads when somebody is obviously losing his. Well, as I said, I have, as I say, a much larger issue that when the president of Iran or their leader, spiritual leader, Khomeini says the U.S. is not treaty capable, that this treaty in capability is not with respect to the JCPOA agreement or the climate change agreement. In fact, it has become a kind of pattern of the United States exceptionalism. And they seem to, while it might be argued that the Democrats will negotiate and the Republicans repudiate the agreement. As for the rest of the world is U.S. agrees and then kicks the whole agreement into the dustbin. So that seems to be the pattern there. But coming out on the issue of Trump, Trump is a particularly shall we say malignant influence on the global order, because he says we anything that we that that has to be done has to be done based on what I say. And as you said, quite often he disagrees with himself. Right, absolutely. And do you think that in this situation that Trump's position allows any global debate? And if it doesn't, then are we better off now thinking of a world order in which the biggest and the most powerful part should be regarded as a rogue state? And therefore we have to negotiate without them? No, no, that's not realistic. Neither you nor I have a vote in the U.S. election. So we'll have to accept whatever that process throws up. I think what we have to recognize is that the global order is too important to sort of let go just because you have got a particular person in the White House. At the same time, that particular person in the White House is the president of the United States and we have to just deal with it. So in a way, we would be handing the U.S. victory, particularly this administration, if we do what I know you don't believe what you're saying is that, okay, should we just sort of wrap this all up and throw them out of the game and play our own? Because that is also not possible because of the facts you mentioned. U.S. is the world's largest economy, though it'll soon be taken over by China. But still it'll be in the top three for the foreseeable future, financial power, absolutely, military power, even more so, etc. So I think what we, the rest of the world have to do is actually be even more committed to the process of globalization. But recognize that there are winners and losers and we, we the globalists of the rest of the world, I think have been a bit blasé about it. We've just said because the benefits are so obvious, what's the debate about it? It's only the details about how the redistribution takes place. So I think we need to have a much more intense conversation at a larger forum and not speak in our own echo chambers. I mean, that's what we tend to do. I mean, and myself included, I'm actually much more comfortable talking to my colleagues who believe in globalization and I don't talk to those who don't. But nothing that has happened in the last few years, and this is not just with Mr Trump even before, has made the point that globalization is not good. It is better than not, but it is not as harmless as some of us, maybe myself included, had painted to be. Maybe we had said this was the panacea and I think we were wrong in that. We have to recognize that there are costs and benefits and they're asymmetrical. People who benefit are few, people, sorry, the other way around, people who benefit are many, but the people who bear the costs are few, but those few have to be recognized as being real and somehow compensated or brought into the dialogue. Let's put it this way, Rajat, this few and many, the period from 1990 to today seems to show that the gap between the rich and poor have grown far more. And if 1% has gained far more of the increase in wealth, shall we say as the wealth increase goes into shares of who has gained what, the bottom 25 to 30% seems to have gained very little of the increased wealth. So therefore, when you talk about many and few, I think I would like to reverse the same, but that's a matter of detail what you mean by many and few. But to see two points here, it's not that the many are just a bit more than few. I mean, at the order of magnitude, as you say, it's very true. But the important point also is that there has been globally an increase in incomes. There has been globally a reduction in poverty. There has been globally an improvement in social indicators, no doubt about that. But inequality has risen. But we have to recognize that even if the world economy has grown and everybody has benefited, there are some in every country, including in the US, who have not. And that is how Mr. Trump actually won his way to the White House. I mean, he did win because there were people who felt done in by the process of globalization. Also, I think it's important to recognize that people think the future doesn't look very good. That's right. That's a very important point. Said we can discuss the beneficiaries and losers of the globalization process another day. But what is important for me in this particular case, I don't see that Trump is a person or US, if you look at the presidential election as addressing any of these issues. In fact, what they're arguing for at the moment is that shall we say, US can impose its will to what extent. So if we look at even the democratic priorities that are going on now, or the mainstream liberal media, which we think are pro-globalization of the kind that you have talked about, they're all now also telling Trump, well, you didn't attack Iran bad. You know, you should have actually gone to war. You can say they're taunting him. But you can also say there is a strong constituency for war. And some of the pictures are very frightening. There was a whole poll which was taken about duking North Korea. And as many as 70% of the Americans are not adverse to duking North Korea. So how do you deal with the country and its president who at the moment is not debating the issue that you are, but who is actually in a completely different wavelength? True. But what would be worse if we don't talk at all? That's my point. They may not agree with what we're saying. But my basic point is that that's what we have got. That's the reality. If that's the number of people or percentage of people in the US who feel that way, we've got to deal with it because they also happen to be the world's most powerful sort of financial system, economy at the moment, military otherwise. And this is why my basic point is that the rest of the world has to marshal its arguments much more coherently and do it much more also, I think, sensitively. Because maybe, you know, as I said, we're all assumed the good things will take care of the not so good things. And it obviously didn't. And that's why not just US, maybe we're focusing only on the US for obvious reasons. But the rise of populism, and Brexit, issues in all over the world is also arising, including in India, is arising because there are people who feel left out. And they have, I think, not always, but in many cases, a justification. So the economic goodies didn't come to them as much as they thought they would. And they're basically saying, so what did we get out of it? And the anger is being channelized by Trump, Oluwane, Boris Johnson. Exactly. So, so there are Mr Modi. So, so the anger which is being channelized is one. But the fact that there is anger is a fact. And that's what we need to address. And I think in one sense, I'm basically saying me a culpa, because I'm saying that, look, maybe we just were too blasé about the benefits and said it'll it'll make its own case. And it didn't. So what you're saying is we have to engage with what Hillary Clinton called the deplorables, shall we say, in a very unfortunate choice of words, but he has absolutely electorally disastrous. Absolutely. I think there was an intellectual arrogance about global globalists, which, you know, hasn't stood as well. And that while doing it, we should also, and this is to the globalist, need to think about that all boats do not lift, shall we say, equally. That's right. And some do not get of the ground at all. Absolutely. I couldn't agree more with you. And Trump rising tide does not always lift all boats. All boats. And Trump is the consequence of this, shall we say, blinkered vision of the court and court. Because I think in one session with you, maybe I'd use this, that rising tide doesn't lift all boats. If some boats have holes in their hulls, and we've got to take some special care for those boats, and maybe we didn't, and maybe we just assumed it'll happen automatically. And maybe it wasn't really a tide. So we can think about all of these issues, maybe some other time. But what you're saying is G20 is better than nothing. And therefore we need to engage with it, in spite of, shall we say, the current occupant of the White House. Absolutely. Thank you very much, Rajat, for being with us. Pleasure. And for this, shall we say, discussion, which has many dimensions, which we'll probably discuss other days. Thank you. Thank you for watching NewsClick. Do keep watching NewsClick and do visit our website.