Vijay Kumar Gaba

In the past 6 years, several significant events have occurred that would shape the new global order in the next decade or two. I would particularly like to mention the following ten events that in my view could potentially prove to be transformative for the global order:

1.    Incorporation of the Belt and Road Initiative (BRI) into the Constitution of the Chinese Communist Party. (2017)

2.    Abolition of time limits, allowing Xi Jinping to remain General Secretary of the Chinese Communist Party and chairman of the Central Military Commission for life. (2018) (After winning an overwhelming majority in the 2020 elections, Russian President Vladimir Putin is also eligible to stay in office until 2036.)

3.    The Exit of the UK from the common European market (the EU) (2017-2020); and the elevation of the first non-white person (Rishi Sunak) to the office of Prime Minister of the UK in 2022.

4.    The beginning of the latest round of trade war between the US and China. (2018)

5.    The tariff war between the EU and US. (2018)

6.    The outbreak of the COVID-19 pandemic, allegedly from a laboratory in Wuhan province of China, and consequent breakdown of global supply chains. (2020)

7.    Exit of the US forces from Afghanistan, handing over the regime to the Taliban (2021)

8.    Invasion of Ukraine by Russia and subsequent economic sanctions on Russia. (2022)

9.    Signing of a strategic partnership agreement between China and Saudi Arabia (2022)

10. Massive attack on Israeli civilians by Hamas and subsequent retaliation by Israeli defense forces killing thousands in Palestinian territory in the Gaza Strip. The attack divided the world with Western allies extending support to Israel and Russia, China, and Arab League nations uniting in support of Palestine. (2023)

I feel that each of the above-stated events, along with many other events occurring simultaneously, has added to the momentum of change in the global order that had been in existence since the early 1970s.

It may still be early days to project how the new world order would look like. Nonetheless, it seems reasonable to assume that the global economy may get a significant impetus from the rebalancing. The realignment of trade balances; localization of manufacturing; redistribution of population; and renewed focus on finding/developing new materials, technologies, and methods to promote sustainability may usher in a new industrial revolution.

Notwithstanding the labor pain that the transition would inevitably entail, the new world order would be much better, as has always been the case.

I think young investors need to evaluate the recent events and their likely impact on their investment strategies. I would be happy to share my thoughts on these events in the coming weeks.

 The latest G20 Summit, hosted by India ended on a cheerful note. Apparently, most delegates and dignitaries enjoyed the Indian hospitality, especially the colorful ambiance and brilliant food. It was perhaps for the first time ever that a host country added so much festivities to a G20 summit. The city was virtually shut down to control traffic, minimize air pollution, and allow safe passage for the delegates.

Overall, the theme appeared similar to the famous three-day-long fat Indian wedding. The guests were welcomed in the same manner as a traditional Indian household would welcome a bridegroom’s family. They participated in a variety of events, unrelated to the G20 geo-economic agenda. The main venue of the summit (Bharat Mandapam) was decorated like a grand marriage pandal with colorful lighting, décor, traditional dancers, and all welcoming staff dressed in fine attires.

The bride’s family displayed its finery (UPI, rich culinary traditions, classical architecture, colorful attires, traditional dances etc.) to impress the guests.

Like all weddings, we had mixed experiences with the guests. Adorable younger Jija ji (Prime Minister Sunak) gave many couple goals to millions of Indians. Rebellious cousin (Prime Minister Trudeau) was mostly ignored. Slimy phupha (President Biden) was given top attention but he still chose to ridicule the host and criticize sharply as soon as left the country (press conference in Hanoi within hours of leaving India). The son of the elder brother (Russian foreign minister Lavrov) was delighted to have a valuable return gift (no explicit criticism of Russian aggression in Ukraine). The son of the sulking elder Jija (Prime Minister Li Qiang) also did not complain much. The friends and other relatives (German, Australian, French, Arabs, Indonesian, Brazilian etc.) generally appeared pleased with hospitality or at least had the decency to not show any displeasure. The distant poor relative (representatives from the African Union) appeared awestruck by the opulence. Now that the wedding is over and the guests have departed, it is time to clear the bills and take inventory of the cutlery.

In my view, the key achievements of the summit could be listed as (i) a consensus joint declaration that calls for greater global cooperation to tackle, inter alia, the critical issues of climate change and acts of transborder hostilities; thus avoiding any conflict with the major constituents Russia and China; (ii) conceptual agreement to build a trade corridor connecting Indian sub-continent with Middle East Asia and Europe; and (iii) announcement of a global biofuel alliance.

It may be pertinent to note that Bali G20 declaration of 2022 also skirted the issue of naming Russia and China as aggressors. The Belt and Road Initiative (BRI) of China has not yielded many positive results so far while entailing significant financial and social costs for the stakeholders. The International Solar Alliance (ISA) conceived jointly by India and France in 2015, which now has over 116 countries as members, took a long to show any quantifiable outcomes. So, the benefits for India would depend upon how fast and effectively we build on these initiatives.

Insofar, as the enhancement of India’s stature in the global order is concerned, I believe that it has been a secular trend for the past two decades, and this summit would just help in sustaining that trend. I do not visualize any major upward shift in this trend merely due to G20 summit.C