A Green and Sustainable Growth Agenda - For the Global Economy

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PROCEEDINGS OF A G20 INTERNATIONAL CONFERENCE
NEW DELHI
A Green and Sustainable
Growth Agenda
FOR THE GLOBAL ECONOMY
JULY 28 - 29, 2023 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
i
FOREWORD
The genesis of the G20 was at the end of the last century. Its salience grew even
more during the global economic crisis in the �rst decade of the 21
st
century.
Although India itself has had the scale and autonomy to bounce back relatively
quickly from COVID, this is not true of most countries of the Global South
where the development momentum has appreciably deteriorated because
of the pandemic, further complicated by the aftershocks of war, sanctions,
and in�ation. The challenges of adaptation to a changing climate adds to
economic and social stress. There is a deep crisis of economic development,
well-documented in the stagnation of the Sustainable Development Goals of
the UN and in commentary by the International Monetary Fund (IMF) and the
World Bank, but for reasons of a changed geopolitics, this deep crisis has not
evoked the solidarity of the past.
The G20 Leaders’ most basic commitment is to deliver strong, sustainable,
balanced and inclusive growth, to be achieved through political guidance
arrived at through dialogue and policy coordination. Each G20 Presidency
builds upon the achievements of its predecessor and hands over to its successor
through a well-established troika process. With Indonesia leading India,
Brazil scheduled to follow in 2024 and South Africa in 2025, four developing
countries in succession will hold the G20 Presidency. This sequence provides
a golden opportunity to bring sustained long-term economic growth (and not
just economic recovery) back to centre stage on the global economic agenda.
On 28-29 July 2023, NITI Aayog, together with the International Development
Research Centre (IDRC), Ottawa and the Global Development Network
(GDN), New Delhi convened an international policy conference of around 40
leading thinkers to examine prospects and challenges pertaining to green and
sustainable growth for the global economy. The policy conference was an
of �cial G20 side event designed to explore the contours of a new growth model
to guide this and future G20 Presidencies. The �rst day of the conference
focused on themes related to energy, climate, and growth; technology, policy,
and jobs; the growth implications of a fractured trading system and reshaping
global �nance for sustainable growth. The second day addressed themes
related to multilateralism as well as adjustment, resilience, and inclusion in an
uncertain world. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
ii
The discussions yielded rich insights in a number of areas. For instance,
opinions are sharply divided on the growth consequences of a transition from
fossil to renewable resources at a time when climate change will impose its
own challenges of adaptation. The IMF and the World Trade Organisation
have warned of the economic welfare consequences of the balkanisation
of international trade in the pursuit of economic security, at a time when
interdependence through both trade and �nance has become weaponised.
There is increasing concern that, for all its sophistication, the global �nance
system, both of�cial and private, is not a force supporting long-term sustainable
growth. In various sessions of the conference, experts addressed the critical
issue of how the global �nancial order (including the monetary order) should
be reformed to be more supportive of rising living standards across the world.
Further, they deliberated upon whether a division of world trade into regional
blocs is inevitable and what this implies for a great majority of the world’s
countries.
The issue of liberal globalisation and rising inequality at least within nations, was
also discussed. As the G20 countries lead a global debate on the development
strategy, ensuring more inclusive outcomes will be of paramount concern
for both developing and developed countries. Many experts highlighted the
critical role played by treaty-based multilateral institutions designed at the
end of the Second World War for securing important global public goods
(peace and economic growth) and the pathways for reforming multilateralism
in the present era.
The discussions held during the policy conference offered several important
suggestions for green and sustainable growth which NITI is pursuing through
various fora. By design the conference preceded the Leaders’ Summit, allowing
some of the key ideas and thoughts shared by the experts during the two-day
deliberations to be introduced in the unanimous Leaders’ Declaration, a great
achievement of the Indian Presidency under Prime Minister Modi’s leadership.
The insights shared by leading experts during the conference can serve as
invaluable benchmarks for researchers, academics and stakeholders globally.
The conference sessions received an overwhelming response from across the
world, indicating tremendous interest among the public and academia in the
subject matter. This publication is our collective contribution to the body of
knowledge on this subject, and we hope that it will provide valuable inputs for
Brazil as it takes over the G20 Presidency from India. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
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Under Prime Minister Modi’s leadership and with his strong person al
engagement, India took its G20 Presidency very seriously. The Sabka Saath
Sabka Vikas model that has shown the way in India can also be a guiding
principle for the welfare of the world.
In producing a consensus document at a time of great division between major
powers, India succeeded in imparting new purpose and momentum to a
grouping that had been in danger of irrelevance. As its core, the New Delhi
Leaders’ Declaration is cross-cutting and driving transformative action in an
integrated manner. A collective vision on economic and social empowerment,
bridging the digital divide, driving gender-inclusive climate action, securing
women’s food security, nutrition, and well-being make the Declaration the
most ambitious communique in terms of driving gender equality and women-
led development. The Global South’s call for enhanced representation and
voice in multilateralism as a whole was brought forward, especially through
the inclusion of the African Union into the G20 as a permanent member.
India’s G20 Presidency has focused extensively on working towards better,
bigger, and more effective Multilateral Development Banks (MDBs) that can
deliver �nance and support for 21
st
century issues. India has taken on the MDB
initiative from a start made by Indonesia on the capital adequacy framework.
As Brazil takes over from India, given the sophistication and integration of its
own capital markets, it will take on the task of reshaping the skills and talents
of private �nance to serve the development challenges of a hurting planet. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
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PREFACE
The G20 has evolved to unite member states beyond its original goal of
international economic cooperation to address the world’s most complex and
pressing challenges. The consecutive presidencies of emerging economies
including Indonesia, India, Brazil, and South Africa, demonstrate a commitment
to address these evolving challenges and advance a development agenda
shaped and led by the Global South.
India’s G20 Presidency has created several opportunities to spearhead
southern solutions, which has led to the emergence of a more inclusive and
equitable framework for the G20. Building on this momentum created by
India, NITI Aayog in collaboration with the International Development Research
Centre (IDRC) and the Global Development Network (GDN), set the stage for a
global conversation through a conference on ‘A Green and Sustainable Growth
Agenda for the Global Economy’, which was held in New Delhi in July 2023.
The event embodied the voices, vision, ambition, and collaborative spirit of
the Global South to �nd solutions to address the multiple crises and emerging
challenges faced by the world. The recommendations that arose from this
conference will also play a critical role in shaping the dialogue and will help
build consensus among member states under the subsequent presidencies of
Brazil and South Africa, ensuring continuity and relevance of the discourse.
This conference was a con�uence of ideas and perspectives, spread across
six sessions and a keynote address, aiming to unravel complex global issues
and forge pathways for an inclusive, just, and sustainable future. The emphasis
on a ‘just transition’ as a critical pathway to mitigate climate change marked
a pivotal point in the discussions, underlining the potential positive economic
impact for developed and emerging economies, such as India, in their journey
towards net-zero emissions. This transition, albeit fraught with challenges such
as �nancial constraints and technological needs, calls for a reframing of the
global �nancial architecture and norms.
We are navigating through times marked by technological disruptions,
geopolitical realignments, and mounting environmental pressures . The
conference underscored the transformative power of technology, particularly A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
v
Digital Public Infrastructure, in reshaping economies and the job market. It
highlighted the shift from hyper-globalisation to “slow-balisation”, pointing
towards the need for an equitable transition in the global economy and �nancial
systems.
Furthermore, the discussions delved deep into the evolving nature of capital,
the changing dynamics of labour markets, and the complex interplay between
economics, domestic politics, and geopolitics. The conference also brought
to fore the urgent need to address disparities in economic recovery and the
crucial role of effective multilateralism.
The expert-led discussions also offered a realistic picture of the international
development landscape, acknowledging uneven progress and highlighting the
challenges and opportunities.
This report aims to encapsulate the essence of the discussions, the urgency of
the challenges, and the collective stride towards solutions. It offers an incisive
analysis of the discussions at each session and aims to foster a comprehensive
understanding of the conference’s outcomes and its implications for future
G20 presidencies, and the world at large.
(Kapil Kapoor)
Regional Director for Asia
IDRC
(Jean-Louis Arcand)
President
GDN A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
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Group photograph of conference panelists and speakers A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
vii A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
viii A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
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Table of
CONTENTS
Forewordi
Prefaceiv
Executive Summaryxiii
SESSION 1 ENERGY, CLIMATE, GROWTH
Session Chair: Jayant Sinha, Member of Parliament & Chair of
Parliamentary Standing Committee on Finance (India)
03
Speaker 1: Robert Stavins, AJ Meyer Professor, Energy and
Economic Development, Harvard University, Cambridge MA (USA)
06
Speaker 2: Jessica Seddon, Senior Fellow, Yale Jackson School of
Global Affairs (USA)
10
Speaker 3: Arunabha Ghosh, CEO, Council on Energy, Environment
and Water (CEEW), New Delhi (India)
15
SESSION 2 TECHNOLOGY, POLICY, JOBS
Session Chair: Sachin Chaturvedi, Director General, Research and
Information System for Developing Countries (RIS), New Delhi
(India)
21
Speaker 1: Paul Samson, President, Center for International
Governance Innovation (CIGI) Waterloo (Canada)
23
Speaker 2: Albert van Jaarsveld, Director General, International
Institute for Applied Systems Analysis (IIASA) Laxenburg (Austria)
27
Speaker 3: Debjani Ghosh, President, National Association of
Software & Services Companies (NASSCOM) New Delhi (India)
31
Expert Comment: Vijay Kumar Saraswat, Member, NITI Aayog
(India)
34 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
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SESSION 3
GROWTH IMPLICATIONS OF A FRACTURED
TRADING SYSTEM
Session Chair: Peter Drysdale, Emeritus Professor of Economics and
Head of the East Asian Bureau of Economic Research, Australian
National University, Canberra (Australia)
39
Speaker 1: Alicia Garcia-Herrero, Chief Economist, Asia Paci�c
Natixis, Madrid (Spain)
41
Speaker 2: Nagesh Kumar, Director and Chief Executive, Institute for
Studies in Industrial Development (ISID) New Delhi (India)
45
Speaker 3: Otaviano Canuto, Senior Fellow, Policy Center for the
New South (Brazil)
55
Expert Comment: BVR Subrahmanyam, CEO, NITI Aayog (India) 60

SESSION 4
RESHAPING GLOBAL FINANCE FOR
SUSTAINABLE GROWTH
Session Chair: N. K. Singh, Chairman, Finance Commission and
President, Institute of Economic Growth, New Delhi (India)
65
Speaker 1: Hanan Morsy, Deputy Executive Secretary and Chief
Economist, United Nations Economics Commission for Africa
(Ethiopia)
67
Speaker 2: Tao Zhang, Chief Representative for Asia and the Paci�c,
Bank of International Settlements (BIS) Hong Kong (China)
70
Speaker 3: Poonam Gupta, Director General, National Council of
Applied Economic Research (NCAER) New Delhi (India)
72
Expert Comment: Manjeev Singh Puri, Former Ambassador of India
to the EU, Distinguished Fellow, The Energy and Resources Institute,
New Delhi (India)
75
VIRTUAL DISCUSSION AND WRAP UP OF DAY 1
Technology, Policy, Jobs [Virtual]
Speaker: Robert Lawrence, Albert L. Williams Professor of
International Trade and Investment, Harvard University (USA)
79 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
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Multilateralism: Geopolitics, Governance and the Global
Commons [Virtual]
Speaker: Homi Kharas, Senior Fellow, Center for Sustainable
Development, Brookings Institution Washington DC (USA)
81
SESSION 5
MULTILATERALISM: GEOPOLITICS, GOVERNANCE
AND THE GLOBAL COMMONS
Session Chair: V. Anantha Nageswaran, Chief Economic Adviser,
Ministry of Finance, Government of India, New Delhi (India)
91
Speaker 1: Jean-Louis Arcand, President, Global Development
Network (GDN), Geneva (Switzerland)
93
Speaker 2: Mari Pangestu, Former Managing Director, Development
Policy and Partnership, World Bank (Indonesia)
97
Speaker 3: Ram Madhav, President, India Foundation, New Dehi
(India)
101
Expert Comment: Ramesh Chand, Member, NITI Aayog (India) 104

SESSION 6
ADJUSTMENT, RESILIENCE AND INCLUSION IN
AN UNCERTAIN WORLD
Session Chair: François Bourguignon, Chair, GDN Board; Professor
Emeritus, Paris School of Economics, former Chief Economist, World
Bank (France)
109
Speaker 1: Santiago Levy, Non-Resident Senior Fellow, Brookings
Institution (Mexico)
111
Speaker 2: Haroon Bhorat, Professor, University of Cape Town
(South Africa)
115
Speaker 3: Surjit Bhalla, former Executive Director for India,
Sri Lanka, Bangladesh and Bhutan, IMF (India)
118
Expert Comment: Vinod Kumar Paul, Member, NITI Aayog (India) 123 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
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Keynote Address by Nandan Nilekani, Chairman and Co-founder,
Infosys Ltd., Bangalore and Founding Chairman UIDAI (Aadhaar)
(India)
127
APPENDICES
1. Conference Outline 133
2. About the Organisers 136
3. Acknowledgements 137
4. About the Speakers 138
*Note:
The writeups of each of the speakers have been retained as verbatim since this publication is being
brought out in the form of Conference Proceedings. All the speakers have vetted the content included
under their respective names. This conference was broadcast live on the NITI YouTube Channel and
can be accessed by the readers. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
xiii
EXECUTIVE SUMMARY
The conference was organised around six sessions and one keynote address. In what follows, the main
points that emerged, both from the presentations and the discussions have been summarised.
Session 1. Energy, Climate, Growth
It has become patently obvious that there is a need for a just transition to mitigate climate change.
But there is an upside: for example, there are potentially positive economic impacts of India’s transition
to net-zero emissions, which involves a shift away from fossil fuel imports, which could improve the
country’s balance of payments. Constraints include �nancial resources and technology, necessitating a
reconstruction of the global �nancial architecture.
Challenges: Speakers identi�ed four overarching challenges: global cooperation in climate economics,
India’s speci�c challenges and opportunities in transition, trade-offs in the political economy of climate
action and viewing climate adaptation as an economic problem. Climate change bene�ts are distributed
globally, but costs are localised, necessitating international collaboration. This is particularly crucial
considering the upfront costs of mitigation compared to the long-term impacts. Strategies such as
carbon pricing, smart infrastructure, and the �exible elements of the Paris Agreement can help manage
these costs. As a signi�cant global emitter reliant on fossil fuels, India faces a challenging transition.
However, renewable energy sources are gaining ground. Notably, the transition presents substantial
potential for job creation, particularly through distributed energy and new economic activities.
Climate emergencies exacerbate �scal challenges for countries such as India. Other signi�cant trade-
offs include energy access versus clean energy; energy security versus energy sustainability; and job
growth versus job losses in the transition. Finally, and given the high climate variability and vulnerability
of countries like India, there is a need to view adaptation as an economic issue. This includes incentivising
transitions in individual choice, procurement, infrastructure programs, and innovation.
Way Forward: A two-pronged approach was proposed going forward. First, multilateralism is a
necessity (and not an option). Second, �exibility is central to the Global South. Climate change’s
challenges require multilateral solutions, including creating resilience funds, de-risking platforms,
promoting circular economies, joint technological development, and enhancing green energy security
and transition partnerships. However, to cope with the disproportionate impacts of climate change,
setting up a “�exibility mission” is important for these countries. This would provide them with the
means to adapt and innovate in response to environmental shifts. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
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Session 2. Technology, Policy, Jobs
The current state of the world is characterised by technological disruptions, global realignments and
environmental pressures. First, the emergence of new economic models and intricate national security
concerns are linked to the ongoing technological revolution, particularly advances in AI. Second,
demographic and economic shifts are contributing to the rise of a multipolar world. Third, the strain
from global growth on the environment is leading to signi�cant impacts on natural systems, raising the
likelihood of unforeseen, disruptive events.
Challenges: The challenges are four-pronged. First, the world faces major job market transformations.
Technological progress and AI are creating a structural labour market churn, reshaping the job landscape,
and raising concerns about job displacement. Second, we face signi�cant demographic concerns. The
ageing global population presents a signi�cant challenge to maintaining economic growth. Third, we
will face increased environmentally driven migration. Migration triggered by environmental pressures
could shift future carbon emissions patterns. Finally, numerous policy dilemmas will be caused by
advances in Gen-AI. The rapid pace of AI progression is creating numerous policy challenges including
regulatory issues, AI’s carbon footprint, ethical considerations, security risks, and potential job losses.
Way Forward: The way forward involves investing in human capital, ensuring that sustainability is
focused on wellbeing, reimagining multilateral cooperation, regulating and constructing governance
structures for AI, building inclusive technological infrastructure and embracing new labour practices
and emerging technologies. First, it is crucial to invest in education and stimulate labour force
participation through measures such as extending the retirement age. Second, sustainability should be
viewed broadly as encompassing human wellbeing rather than just an economic activity. Third, there
is a need to strengthen and restructure international cooperation to tackle shared challenges such
as skill development, job creation, and productivity. Fourth, Generative AI requires a comprehensive
regulatory framework, ethical guidelines, and proactive industry self-governance. Fifth, investing in
technological infrastructure, enhancing digital education, and boosting public-private partnerships are
essential for an inclusive and sustainable transition. Finally, adopting progressive labour practices and
leveraging emerging technologies, particularly in developing markets, can be transformative. Industry
investment in R&D, training, and multidisciplinary research collaborations are also key to navigating
future challenges.
Keynote Address by Nandan Nilekani
In an era of global demographic shifts, warming climates, and the dawn of new geopolitical contexts,
technology is enabling the restructuring of economies. In India, this evolution has involved a transition A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
xv
from a predominantly of�ine, informal, and low-productivity landscape to a uni�ed, formal mega-
economy underpinned by Digital Public Infrastructure (DPI). DPIs, funded either publicly or driven
privately through regulatory policies, enable interoperability and create combinatorial bene�ts.
Challenges: India’s diversity, in terms of cultures, markets, industrialisation levels, and regulations posed
signi�cant challenges to economic formalisation. Informality and the lack of productive engagement
with technological advancements rendered the economy vulnerable to inef�ciencies. The need for
rapid �nancial inclusion, transactional formalisation, and a dynamic startup ecosystem was acute.
DPIs needed to balance the tension between fostering innovation and ensuring robust regulation. The
impact of climate change further necessitated the need for mechanisms that could expedite both
mitigation and adaptation efforts.
Way Forward: DPIs have been pivotal in transforming India’s economic landscape. They have
accelerated �nancial inclusion, facilitated the highest volume of digital payments globally, and provided
the foundation for the economy’s formalisation. By embedding policy into source codes, DPIs reconcile
the demand for innovation with regulatory necessities. Welfare schemes and programmes such as
distress-related money transfers and vaccination initiatives have become more ef�cient due to these
systems. The startup ecosystem has also �ourished, surging from around a thousand startups in 2016
to 115,000 currently. DPIs such as the Open Network for Digital Commerce (ONDC) have democratised
the digital economy, fostering competitive and equitable market dynamics. Furthermore, DPIs can
play a crucial role in climate change action, aiding in anticipatory climate �nancing, the promotion of
a circular economy, and the creation of energy interfaces. Through such multi-pronged interventions,
DPIs are shaping the contours of a more resilient, equitable, and sustainable economy.
Session 3. Growth Implications of a Fractured Trading System
Technological innovations and transportation advancements led to the fragmentation of manufacturing
processes, reducing trade barriers and incorporating a billion lower-wage workers into the global
labour supply. This era was marked by a rise in global GDP and trade. This produced the age of
hyper-globalisation. But a noticeable shift has occurred towards “slow-balisation” or de-globalisation,
characterised by increased restrictions on trade, labour movements, and limited technology diffusion.
This transition indicates a signi�cant transformation in the global economy.
Challenges: Two main challenges were highlighted: China’s resilience and dominance and the impact of
de-globalisation on Europe and US-China relations. Despite the global slowdown, China has maintained
its position as a key driver of global growth. China’s resilience is largely attributed to its focus on A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
xvi
exporting more value-added products, particularly in clean tech. Conversely, Europe has suffered
signi�cant losses due to de-globalisation. Concurrently, the current US-China decoupling has led to
increased trade and �nancial protectionism. The world’s increasing dependence on China, particularly
in clean and green tech sectors, suggests potential risks for global supply chains.
Way Forward: The way forward involves India as a potential future engine of growth, the adoption of
innovative strategies centred on sustainable growth and the need for trade reform. With China facing
an ageing population, India could step up as the next global growth engine. However, it must address
its de-industrialisation and boost its manufacturing sector. Strategies should include enhancing
productivity in traditional sectors, creating manufacturing jobs, managing competitive exchange rates,
closing infrastructure and logistics gaps, and improving education and skills development. Initiatives
such as the Gati-Shakti Masterplan could help sustain India’s growth momentum. To facilitate this
transition and maintain growth momentum, reforms of multilateral trade rules are needed. These would
retrieve policy space for industrialisation and facilitate the transfer of technology.
Session 4. Reshaping Global Finance for Sustainable Growth
The current global �nancial architecture, marred by dysfunction and cluttered with non-economic
issues, requires signi�cant restructuring. It is instrumental in �nancing growth, which currently faces
a shortfall of $3 trillion over the next decade, highlighting an urgent need for both public and private
resource mobilisation. Additionally, the fragmented nature of this architecture is contributing to
disparities in economic recovery between developed and developing regions. These challenges call for
an orderly transition to more ef�cient and sustainable systems.
Challenges: Increasing global �nancing needs in the face of dwindling liquidity present a substantial
challenge, particularly for developing nations. Three types of �nancing - private sector, multilateral,
and bilateral - each come with their own complications, from volatility to limited availability. Emerging
economies are further threatened by capital volatility and exchange rate risks as their �nancial integration
deepens. The global debt architecture, currently informal, inef�cient, and fragmented, poses additional
challenges, with many low-income countries already in or nearing a debt crisis. Moreover, the world
lags in transitioning to net-zero emissions, exacerbating the climate crisis and necessitating signi�cant,
upfront �nancing, primarily from private sources.
Way Forward: Reforming �nancial systems and processes is key to overcoming these challenges. This
includes making SDR allocation rule-based and less discretionary, as well as improving the multilateral
system. Debt needs to be managed sustainably and transparently, possibly by establishing a multilateral
creditor club and strengthening legal frameworks. Financial safety nets need strengthening, bilateral
swap lines need to be expanded, and IMF contingency lines invoked to make capital �ows safer. The role
of credit rating agencies should also be regulated to ensure fair assessments for emerging countries.
Finally, scaling up green �nancing, especially for regions like Africa, will require innovative policies
and tools to drive the global transition to net-zero emissions. This includes fostering green investors,
policies that bolster the enabling environment, and encouraging international cooperation. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
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Virtual Discussion and Wrap-up of Day 1
The nature of capital has evolved considerably since the 1980s, shifting from tangible to intangible forms
such as software, databases, and patents. Alongside this, a skill-biased form of technological change
has led to diminished manufacturing employment and a polarised job market. Future opportunities
lie in the globalisation of knowledge, �ntech, e-commerce, trade in services, and remote work. Green
growth strategies are also emerging, although they will create both winners and losers in the labour
market.
Challenges: The main challenges involve technological disparities and the inef�ciency of the MDBs.
The rise of skill-intensive technologies and labour-saving innovations, such as robotics and AI, pose
signi�cant challenges for less skilled workers and countries specialising in labour-intensive processes.
Simultaneously, the MDBs, though critical in supporting socio-economic development, are struggling
with signi�cant performance gaps, transparency issues, and the impacts of geopolitics. Their
effectiveness and ef�ciency are being undermined, leaving a sizable void in the �nancial and technical
support required by most developing countries.
Way Forward: The way forward involves a new toolkit of policies and a reform of the structure of the
MDBs. Addressing these challenges necessitates new policies promoting advanced manufacturing
and skill-intensive technologies such as semiconductors. Efforts should be directed towards ensuring
macroeconomic stability and promoting inclusive growth, alongside effective transfer, adjustment, and
training policies. Concomitantly, MDBs must engage in transformative reforms, including improved
capital mobilisation, better project implementation, joint �nancing, risk sharing, and making sustainable
infrastructure an asset class. As part of a new multilateralism, MDBs must not only improve their own
functionality but also ramp up public and private investments in developing countries, which are
essential to meeting global challenges such as climate change.
Session 5. Multilateralism: Geopolitics, Governance and the Global
Commons
The role of economics in politics and the effects of geopolitics on multilateralism underscores the
interdependence of global issues. These require an effective multilateral order for universal bene�ts,
encompassing growth, sustainable and inclusive development, peace, and risk management. Important
factors include open trade and investment, the management of global tensions, such as the US-China
trade war, and the integration of emerging economies like India into the world economy. Understanding
health as both a consumption good and an investment allows a focus on universal health coverage,
malaria eradication, and new vaccines. However, the relationship between health and economics is
complex, particularly given the disruption caused by COVID-19.
Challenges: The rise of protectionism and violations of non-discrimination rules have strained
multilateralism, triggering a shift from a unipolar to a multipolar world. Systemic crises stemming from
disruptive technological innovations and the effects of the COVID-19 pandemic present signi�cant A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
xviii
hurdles. Severe recessions transmitted from the Global North to the Global South through trade channels
highlight the harmful economic spillover. This spillover, coupled with a decrease in of�cial development
assistance, has prompted calls for an effective insurance mechanism. Furthermore, the multitude of
Sustainable Development Goals (SDGs) can be overwhelming; a focused approach may yield better
results. Misinformation regarding COVID-19 has also highlighted the importance of examining the role
of institutions.
Way Forward: In addressing these challenges, key recommendations include reforming the World
Trade Organisation, promoting plurilateral initiatives, regional trade agreements, and comprehensive
partnerships. Moreover, leveraging the G20 to represent the Global South and advocating for
more manageable, tangible goals within the SDG framework could provide bene�cial outcomes.
Simultaneously, there is a need to overhaul multilateral institutions and encourage the growth of
‘minilaterals’ such as regional organisations, global NGOs, and big tech companies. As we grapple
with reducing dependence on the global commons for developing nations’ growth aspirations, it is
crucial to bridge natural and social sciences and consider �exible rules within the global order. This
will necessitate multinational corporations to meet certain thresholds to be included in multilateral
arrangements. The need for a multilateral arrangement supporting global health goals and even the
concept of an insurance mechanism for the Global South against shocks to the Global North given their
interdependence is also evident, emphasising a balanced, adaptable approach to the evolving global
order. There is also a scope for a trust fund type mechanism with leveraging so that the use of public
funds meaningfully involves donors, recipients and all stakeholders. Future multilateral partnerships
should not have permanent membership with veto power, and should involve other stakeholders whose
voices are sometimes drowned out such as the corporate sector, NGOs and faith-based organisations.
Session 6. Adjustment, Resilience and Inclusion in an Uncertain World
The international development landscape presents a complex picture, with uneven progress across
different regions and demographic groups. Sub-Saharan Africa (SSA), despite showing some decrease
in poverty rates, is trailing behind the global average in poverty reduction, owing to its low elasticity of
poverty reduction with respect to economic growth. By 2100, almost half of the world’s youth will be in
Africa, creating both an opportunity and a jobs challenge. Concomitantly, robust economic growth in
developing countries such as China and India has started to lower global inequality, though low-income
countries are still lagging.
Challenges: Various challenges impede efforts towards full inclusion and equitable growth. In SSA,
most workers moving out of agriculture end up in the informal sector, indicating weak patterns of
structural transformation. Despite a decline in poverty, Latin America grapples with high inequality and
deep poverty due to a dual social insurance architecture that does not adjust well to labour market
dynamics. This model creates a trade-off between enhancing bene�ts for informal sector workers and A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
xix
maintaining productivity. Similarly, although improvements are observed in India’s multidimensional
poverty index, the development of an inclusion norm based on health, nutrition, and overall well-being
is desirable.
Way Forward: Building resilience and inclusion for subsector-level growth through product space
mappings and value chain upgrades could help drive employment in Africa. Growing middle-income
countries need to design their social protection systems to minimise problems and trade-offs
associated with coverage expansion. Careful consideration of budgetary costs, redistribution, and
ef�ciency is crucial when implementing social protection policies. A focus on education can boost
economic inclusion, as demonstrated by unskilled workers’ wage increases in countries like India.
Finally, addressing multidimensional poverty by considering aspects beyond income, such as health
and nutrition, could contribute to comprehensive and sustainable development. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
1 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
2
JESSICA SEDDON
Senior Fellow,
Yale Jackson School
of Global Affairs
(USA)
ARUNABHA GHOSH
CEO, Council on Energy,
Environment and Water (CEEW),
New Delhi
(India)
July 28-29, 2023
Hotel ITC Maurya, New Delhi, India
JAYANT SINHA
Member of Parliament & Chair
of Parliamentary Standing
Committee on Finance
(India)
SESSION 1
ENERGY, CLIMATE, GROWTH
ROBERT STAVINS
AJ Meyer Professor, Energy and
Economic Development, Harvard
University, Cambridge MA
(USA) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
3
SESSION CHAIR
I
think it makes sense to spend a few minutes
framing the issues as we have seen them in
India and globally. Thereafter, each of the
panellists will shortly introduce themselves and
their work, and spend a few minutes giving us
their perspectives. They have presentations that
they will be providing. Thereafter, we will have an
opportunity to take questions from all of you. So,
we look forward to a very lively session, and we
will of course do a quick summing up. Each of the
distinguished speakers will give their perspectives.
I’ll give my perspective, and we will conclude.
The good news is we have plenty of time. It’s a
very rich and complicated set of issues, but we
are very fortunate to have very distinguished
commentators on that. And of course, all of you
will provide your perspectives as well.
Now, before we get started, I do want to
acknowledge our great enthusiasm and
excitement about the fact that through this
G20 process as the Sherpa described, there is an
outcome that we are working towards, which is
a Green Development pact. And the Pact would
be a set of coordinated actions to really drive, as
Sumanji just said, growth, particularly sustainable
green growth. And when it comes to green and
sustainable growth, I must say that I have a very
personal and deep interest in that, as Sumanji
was also outlining.
I represent Hazaribagh in Jharkhand and
Hazaribagh is one of the largest coal producing
areas in India and in fact in the world. So we are
rich, we sit on top of one of the richest coal seams
in the world, which is the north current coal �eld,
which is where we are producing much of our
coal now. And not only do we have a tremendous
amount of coal production happening, we have in
the area 6,000 megawatts of coal-�red capacity
coming up in front of our eyes. We have a whole
host of sponge iron plants. We have brick kilns,
we have a large steel rolling mill also, in fact in my
constituency. So, we have a full industrial cluster
that is very fossil fuel dependent.
All of these issues of how do we ensure green
development? How do we ensure just transition,
how do we ensure that a big geographic area of
�ve or 10 million people that is largely dependent
on fossil fuel can actually undertake a just
transition, are issues that I’m dealing with, not
just at a high economic level, but day-to-day
in terms of people’s livelihoods, and all of the
impacts of making that transition. So, these are
issues of great interest to me, of course. I also,
as Suman ji indicated, chair the parliamentary
standing committee on �nance, where we are of
course looking at longer term issues of economic
growth, �nancing of green development, of
sustainable growth as well. What do we need to
do both domestically and globally to ensure that
this green development actually happens?
So, whether you look at it from a very grassroots
perspective of actually the human impact of all of
this, or we look at it from a macro perspective in
terms of India’s economic growth and the role of
the global community in supporting that. Those
are issues that I’m dealing with on a continuous
basis now. I �rst started looking at these issues
about four or �ve years ago in detail and looking
at all the academic and modelling work that had
been done in this area. As a policymaker, the
JAYANT SINHA A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
4
�rst question I asked was, what’s the impact of
net zero? Because the conventional view at that
time, particularly in India, was that net zero would
actually be bad for India. If we embarked on a
decarbonisation trajectory and we took India to
net zero, it would actually be inimical. It would
not be advantageous for India to actually do that.
And I’m talking about this independently of the
impact of climate change, purely on an economic
and a business perspective. Is net zero positive or
is net zero negative?
And what are India’s emissions under different
scenarios? Suman ji, of course, worked at Shell
where they pioneered scenario analysis. So,
from a scenario perspective, if we went to
decarbonisation in different ways, how would
that impact India’s economic growth and India’s
economic outcomes? Therefore, I asked a number
of economists.
I asked a number of think tanks. Show me the
models, right? Help me understand what is the
impact of decarbonisation. And what we found
four or �ve years ago is that the climate scientists
had done this for the US and China, but not for
India. It was important to put together the climate
models, the emissions models with what was
happening as far as the economy was concerned.
And by that I meant investments required for
economic growth, jobs impact on balance of
payments, and so on.
And by that I meant investments required
economic growth, jobs impact on balance of
payments and so on. So, we actually had to build a
lot of the modelling work to be able to understand
what’s the impact of net zero. I think as all of you
would intuitively accept and understand what we
found, and not just through one modelling study,
but a range of modelling studies done by a wide
group of experts and think tanks, is that net zero?
And for a politician like me, the headline is
important. The headline is very important for us
as politicians. And for me the headline is net zero
is net positive. Net zero is net positive. And I’m
stripping out climate change. I’m not looking at the
impact of extreme weather or 2.8-degree warming,
any of that. I’m just saying purely on an economic A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
5
and as a business question, is it better to move
towards green technologies and decarbonisation
or to stay with the fossil fuel driven economy? And
the answer was independent of climate, purely on
the basis of technology change and what was
happening, solar getting cheaper than, you know,
fossil fuels and so on.
Electric vehicles being from a Total Cost of
Ownership (TCO) perspective, being cheaper than
ice cars and so on, it’s actually better to go to net
zero. Net zero is net positive. There’s no question
about it. Once we factored in climate change, of
course, then it becomes even more positive. But
net zero is absolutely net positive when we look
at it on every dimension, whether we look at it in
terms of GDP growth, job creation, air pollution,
balance of payments on all dimensions.
Net zero’s, net positive. And let me just emphasise
India’s imports annually, $600 billion of which
$250 billion are fossil fuels alone. So, if we can
move away from fossil fuel imports, which is
obviously crude oil, natural gas, coal, we are
going to have a tremendously positive impact on
our balance of payments as well. So therefore,
net zero is net positive on every dimension that
we look at. However, the challenge for everyone
is how do we actually make it happen? Does
the Global South have the �nancial resources
and the technologies to actually move to net
zero by 2060, 2070, which is when it might be
realistic or practical to envision that it could
happen? Do we have the money? And the
answer is right now, neither do we have the
�nancial resources nor the technology. And
this requires a massive set of changes to the
global �nancial architecture, to the MDBs and
to the provision of global public goods as well.
So those are the challenges that we face as we
move towards net zero. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
6
SPEAKER 1
M
y topic, as you can see, is a broad
overview to get things started: “The
Energy Transition: Challenges, Trade-
offs, and Opportunities.” I think of
this as a primer for those of you who
are not steeped in climate change policy, and are
focused on economic development more broadly.
So, I am trying to set a common denominator for
discussion going forward. I am going to start in
two ways: one spatial and one temporal, taking us
from some basic science to basic economics to
the geopolitics of climate change.
Starting with the spatial, greenhouse gases mix
in the atmosphere, so the location has no effect
on impacts in economic terms. Climate change
is a global commons problem. What that means,
economically, is that any jurisdiction that takes
action will incur the costs of its actions, but the
climate bene�ts will be distributed globally. If you
think about the basic arithmetic of that, it becomes
obvious that for virtually any jurisdiction, the
climate bene�ts it reaps from its actions are going
to be less than the costs it incurs, despite the fact
that the global bene�ts of its actions might be
much greater than the global costs of its actions.
This presents a classic free rider problem, which
is why international, but not global cooperation
is essential. I say “international” partly because
the G20 countries and regions alone account
for, depending upon the accounting mechanism,
80% to 90% of global emissions.
Now, there is also a temporal dimension that
takes us from the science to the economics
to the politics and policy. Greenhouse gases
accumulate in the atmosphere. Importantly,
carbon dioxide (CO
2
) has a half-life in the
atmosphere of over a hundred years. This is
in tremendous contrast with another very
important greenhouse gas, methane, which we
can talk about if there is interest. The damages
of climate change are a function of the stock in
the atmosphere, the concentration, not the �ow
at any point in time. The severe consequences of
climate change are over this long time-horizon,
but climate change policies and the attendant
costs of mitigation are going to be upfront. For
representative democracies, this presents a
massive challenge of upfront costs and delayed
bene�ts. The political incentive in democracies is
to give bene�ts to voters today, and to place the
costs on future generations. The climate problem
is asking politicians to do precisely the opposite.
So, if we combine the global commons nature of
the problem with this intertemporal asymmetry,
that is essentially why, at least from an economic
perspective, this is a very tough political
challenge virtually anywhere in the world.
Having said that, I think the challenges are
particularly striking for a country such as India.
I say this, �rst of all, because India is a major
force in the global energy economy. Energy
consumption has more than doubled since the
year 2000. This has been propelled both by a
growing population and also by rapid economic
growth. At the same time, however, energy use
per capita in India is well under half of the global
average.
Within the country, over 80% of energy needs
are met by coal, oil, and solid biomass. Coal is
ROBERT STAVINS A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
7
by far the most important source of energy and
has been critical for the expansion of electricity
generation, the achievement of poverty reduction
in the country, and for the expansion of industry.
Oil consumption also has grown rapidly due to
rising vehicle ownership and mass and private
transport. And �nally, biomass, primarily fuel
wood, although it makes up a declining share of
the energy mix, is still very widely used in India,
particularly for cooking.
India is the third-largest global emitter of CO
2

as a result of all of this, despite the fact that it
has relatively low per capita CO
2
emissions.
Importantly, particulate emissions, particularly
PM2.5, are a major health issue, correlated
with CO
2
emissions but not causally linked with
climate change. Finally, renewable sources of
energy have begun to gain ground within the
country. Solar photovoltaics (PV) growth has
been nothing less than spectacular, and the
potential for PV development and penetration
going forward is even greater.
Trade-offs, therefore, going forward, are
inevitable, and are best not ignored. It is best not
to sweep them under the rug and pretend that
it is all win-win “happy talk.” The transition from
fossil fuels to renewables will not be easy, and
it will not be cheap. If it were either, it already
would have happened. Costs of decarbonising
electricity, the grid, and transport sectors are
going to be signi�cant, but those costs can be
reduced in various ways.
One way to keep costs down is through the
judicious use of innovative policies. For example,
there are carbon pricing instruments such as
cap and trade, which India has already begun to
do, improved pricing of electricity, including the
use of smart metering where feasible, which has
also begun to happen in this country. Costs can
also be reduced through the judicious use of the
�exible elements in international policy, that is,
the Paris Agreement. In particular, appropriate
use of the �exibility that is inherent in Article 6
of the Paris Agreement is, in my view, key. I think
India could play a valuable leadership role in
helping de�ne the parameters of both Article 6.2
and Article 6.4.
It should also be recognised that reducing coal
and oil use will, as I suggested a moment ago,
bring tremendous health co-bene�ts. Typically,
whether it is China, the United States, or India,
those health co-bene�ts are actually of much
greater value than are the local climate bene�ts.
So, they are very, very important scienti�cally,
economically, and also potentially politically.
Addressing climate change, importantly, is also A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
8
going to reduce long-run costs of adaptation.
Now, let me just say very brie�y why economists
like myself tend to favour carbon pricing, taxes,
or cap and trade in large, complex economies,
but certainly not all countries of the world. It
always depends upon national circumstances,
but I am thinking of the G20 countries mainly.
There are three reasons.
The �rst reason is feasibility: no other feasible
approach can provide meaningful emission
reductions. It is impossible to think about
using conventional performance standards or
technology standards when you have hundreds
of millions of sources within the country.
Second, economically, it is the least costly
approach in the short term because abatement
costs are so heterogeneous.
And third, in the long term, carbon pricing can
bring down costs because of providing incentives
for carbon friendly technological change.
But I want to emphasise that although economists
like myself may see it as necessary, eventually in
large complex economies, it will not be suf�cient.
That is because there are other market failures;
two in particular. One, there are some principal
agent problems, and then there are also some
public good issues, such as for information
spillovers that get in the way of the pricing.
Now, in terms of the worldwide status of carbon
pricing instruments, there are now cap and trade
systems in place or announced in some very
important countries of the world within the G20.
There are also carbon taxes in many countries
of the world, and we might want to compare
them. There are equal numbers of the two, a
total of about 60 recently, and approximately
30 of each. There are carbon taxes in particular
Northern Europe that are at a much higher level
than any of the cap and trade systems.
The taxes are in blue, the trading programs are
in green. If we wanted to ask, which are more
important right now, we could multiply the
stringency, the carbon price, whether it is the
tax or the allowance price from the market,
by the scope, how many tons of emissions are
accounted for, in other words, the area of the
rectangles. And as you can see, there is more
green than blue. So right now, emissions trading
is more important in the world. I am not saying it
will be in the future, compared to carbon taxes.
Altogether that is only 15% of global CO
2

equivalent emissions. Now interestingly, if China
goes ahead, and they have now launched their
emissions trading system, then eventually that
would double the width of this because they
account for 30% of global emissions. If they
cover half of their emissions with their trading
system, which eventually they say it will do, that
would be 15% of global emissions.
Now, what are the consequences? First, the
consequences for coal are very, very signi�cant
due to its high carbon content. This is not just
for carbon pricing, but for any meaningful
climate policy. Impacts are in terms of electricity
dispatch, in terms of investments in new capacity,
in terms of earlier retirement. In the case of
natural gas, the impacts are smaller because
of the lower carbon content, but in the short
term, in countries where natural gas substitutes
for coal in electricity generation, as it is does
in the United States, natural gas demand could
increase in the short term. Having said that, it is
important to recognise that even with substantial
carbon pricing on the order of a hundred dollars
per ton of CO
2
, the effects are small compared
to what exogenous technological change has
meant, at least in the United States, because
of the technologies of horizontal drilling and
hydraulic fracturing, which has brought down A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
9
the cost of new sources of natural gas.
And then �nally, oil, where the impacts are
going to be muted in the short term, because
there are limited substitutes for liquid fuels in the
transportation sector, which means the marginal
abatement costs are relatively high. So, a cost-
effective portfolio in the short term actually
would not target oil, but we will see increasing
penetration of EVs, growth of biofuels, and
greater fuel ef�ciency. Petrol demand may
decline post 2026, but that will be muted by
growing demand for aviation fuels and for
petrochemicals.
Now, the economic impacts are, also can be
looked at as bad news for fossil fuels, but
obviously good news for renewables and
possibly for nuclear power. That depends upon
domestic political circumstances.
In other sectors, climate policies will increase
energy costs. So, a simple rule of thumb is that
it will be bad news for sectors that use energy,
but that is all sectors. On the other hand, it
can be good news for the producers of energy
consuming durable goods, such as manufacturers
of commercial aircraft, because when the price
of jet fuel goes up, then there is a more rapid
turnover of the capital stock of aircraft, because
each generation is exogenously more ef�cient
than the last. So, it will be good news for Boeing
and Airbus, but particularly bad news for the
consumers of those same energy consuming
durable goods, whether it is Air India, Lufthansa,
or United Airlines.
Finally, I want to remind you in closing, that it
is a global commons problem, so international
cooperation is necessary. That is why the annual
negotiations under the United Nations remain
very important. Even though many of us in the
room �nd them frustrating, they are important.
But it is also why climate change merits
continuous attention from the G20, which is why
this conference over today and tomorrow is, I
believe, so important.
So, in addition to saying thank you, I just want
to leave you with some websites where you can
get more information. The Harvard Project on
Climate Agreements, the Harvard Environmental
Economics Program, each of which I direct; also,
my website, my blog, and of course you can
follow me on Twitter. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
10
SPEAKER 2
I
ndia faces the triple challenge of i) continuing
to improve living standards for more of its
population, ii) within a narrowing carbon window,
and iii) in the face of accelerating environmental
change. It has to build the societal capacity to
do new things – from crop-switching to battery
innovation to resilient, low-carbon infrastructure –
quickly. In short, it has to become more �exible. This
paper sketches a roadmap for a National Flexibility
Mission.
The triple challenge. Since the other presentations in
this panel have focused on the mitigation challenge,
I am going to spend a little bit of time putting a
spotlight on the new operating environment for
development in India.
Temperatures in the region are rising, albeit at slightly
lower rates than the global average
1
. These start
from a relative warm base temperature, however,
so the frequency, duration, and geographic scale
of dangerous heatwaves is on the rise, particularly
across the highly populated Indo-Gangetic plain and
central India.
Turning to water, which not only supports agriculture,
industry, and household needs but also a large portion
of the electricity sector (thermal and hydropower):
availability is evolving. Monsoon patterns are shifting
and the groundwater stocks that could, with further
investment in water management and irrigation
infrastructure, serve as a buffer for more variable
rainfall are depleted. The glaciers in the Himalayas,
which act as water storage for surrounding nations,
are shrinking.
As far as weather goes: the oceans around India
are warming faster than the global average, leading
to more rapid intensi�cation of cyclones and coast
storms as well as new seasonal patterns of storms.
India’s economic geography includes signi�cant
coastal value-at-risk.
The key point here: environmental change is altering
the India’s operating environment for development.
These risks are in some sense known to the
Indian policy world. The striking Figure 1 below
on temperature increases comes from the Indian
Meteorological Department’s “Statement on
Climate of India during 2022.”
2
Ministry of Earth
Sciences’ 2020 assessment of climate change over
the Indian region is a comprehensive and detailed
combination of regional and global research on
environmental change. Figure 2 below as well as
JESSICA SEDDON
1
Krishnan et al (2020) �nd that land surface temperatures of India rose by 0.7C from 1901-2018, compared to a world average
increase of 1C
2
Available at: https://mausam.imd.gov.in/Forecast/marquee_data/Statement_climate_of_india_2022_�nal.pdf
3
Table 1.5: Krishnan, R. et al. (2020). Introduction to Climate Change Over the Indian Region. In: Krishnan, R., Sanjay, J.,
Gnanaseelan, C., Mujumdar, M., Kulkarni, A., Chakraborty, S. (eds) Assessment of Climate Change over the Indian Region.
Springer, Singapore. https://doi.org/10.1007/978-981-15-4327-2_1
Chapter 11: Dhara, C., Krishnan, R., Niyogi, D. (2020). Possible Climate Change Impacts and Policy-Relevant Messages. In:
Krishnan, R., Sanjay, J., Gnanaseelan, C., Mujumdar, M., Kulkarni, A., Chakraborty, S. (eds) Assessment of Climate Change over
the Indian Region. Springer, Singapore. https://doi.org/10.1007/978-981-15-4327-2_12
4
See for example, in Drishti: https://www.drishtiias.com/daily-updates/daily-news-analysis/global-sea-level-rise-and-implications-
wmo#:~:text=Rate%20of%20Sea%20Level%20Rise,inland%20by%20about%2017%20meters A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
11
Figure 1
Annual mean land surface air temperature anomalies averaged over India for the period 1901-
2022. The anomalies were computed with respect to the base period of 1981-2010. The dotted
line indicates the linear trend in the time series. The solid blue curve represents the sub-
decadal time scale veriation smoothed with a binomial �lter.
Figure 2:
Projected Changes over the Indian Region
Figure 2 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
12
Table 1.5 and Chapter 11 in the report summarise this
succinctly for those seeking a quick read
3
. The World
Meteorological Organisation’s report on ocean
temperatures is included in online training packets
for the Indian Administrative Services (IAS) exam
4
.
At the most basic level, these changes, along with
the global need for India to pursue low-carbon
development, are a call to strengthen the overall
capacity to do things differently – fast. The list
of things that will need to be done differently in a
warming, decarbonising world is long, as is the
range of entities and individuals who will need to
actually do this doing. Farmers will have to grow new
crops, governments at all levels will have to make
different choices about transport, power, and water
infrastructure, and businesses will have to build in new
buffers and adapt their value chains to delivering and
accounting for new products and services. Workers
will have to learn new skills midlife, and households
may need to move to more climate-proof areas.
The “push” for change is becoming clearer, whether
it is a change in the pattern of the monsoon that
leaves some areas unexpectedly dry and others
underwater with �oods or a cross-border carbon
adjustment mechanism that makes carbon intensity
more expensive than it used to be.
Reducing the frictions – building �exibility – is essential
to ensure that this push does not become damaging
pressure on lives, livelihoods, and the economy. The
case for �exibility can be made in various ways and
varies across dimensions. In macro-economic terms,
within the world of climate adaptation, for example,
economist Esteban Rossi-Hansberg and others
have found that the �exibility to migrate or relocate
investments brings the expected cost of sea level
rise down from 4.5% of real global GDP in 2200 to
0.11%.
5
Similar cases have been made for the value of
workers’ ability to shift across �rms and industries
as technology evolves. In both cases it is important
to note that such “�exibility” can be hard for those
who relocating or �nding new jobs – part of the
challenge in building �exibility is making sure that the
burdens of �exing are not disproportionately placed
on those with less economic or political power. In
micro-economic terms, the value of �exibility can
be expressed in terms of expanding options for
individuals. An individual with a portable identity, a
strong educational foundation, access to a safety net
independent of employment, and access to credit is
far more “�exible” – able to do new things fast – than
an individual who is locked into a particular place and
job to survive.
How might India build its capacity for �exibility?
What might be the formation of an initiative, a set
of actions, a mission-level orienting framework for
India to essentially be a pioneer in leading in both
adaptation as well as mitigation?
Here I sketch a high-level roadmap for a �exibility
mission that a national supra-ministerial entity such
as the NITI Aayog could lead. The roadmap draws on
my academic past in game theory, my professional
present focus on distilling workable principles for
institutional design, and some of what I’ve learned
over the past couple of decades of having the
privilege of working with partners in Indian business,
government, and civil society on infrastructure
and urban policies. There is not a comprehensive
precedent to learn from. While most blueprints for
new initiatives tends to start with a recitation of case
studies from other countries – in this case, India has
an opportunity for being the �rst to create a whole-
of-government-plus-partners initiative toward
building the 21
st
century societal capacities behind
mitigation, adaptation, and more.
Orient – name and describe “�exibility” as a
distinct shared goal for various levels of government,
sectoral agencies, business associations, and civil
society groups to work toward.
Prioritising �exibility as a social capability offers an
alternative to the “incentives” approach to change.
If one is looking at sharpening incentives for a
transition, one might use taxes, subsidies, regulatory
carrots and sticks, or carbon pricing to create a
push. If one wants to instead reduce the frictions to
change - the reason that industrial clusters are not
moving to gas rather than biomass, the reason that
people are not moving from one farming region
suffering from drought to a new one – one might
look at supporting individual �exible, investing in
infrastructure that lowers the cost of switching, or
supporting technology and business models that
generate real options. Similarly, with infrastructure
programs, a “push” mentality may seek to promote a
particular form, green hydrogen, a particular industry,
a particular special economic zone. A “�exibility”
approach might, in contrast, focus on functional,
interconnected, multimodal transport as a platform
for new choices. That contrast is quite valuable in
de�ning what would be a comprehensive, whole-of-
5
Desmet, Klaus, Robert E. Kopp, Scott A. Kulp, Dávid Krisztián Nagy, Michael Oppenheimer, Esteban Rossi-Hansberg, and
Benjamin H. Strauss. 2021. “Evaluating the Economic Cost of Coastal Flooding.” American Economic Journal: Macroeconomics,
13(2): 444-86 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
13
government effort to build the social capability to
address both of these.
The initial naming and valuation of �exibility is
important because India is a complex governance
environment with three levels of government, more
speci�cally delineated sectoral ministries and state
agencies than most of its peer nations, a number of
different business associations representing diverse
�rm sizes and interests, and varied economic and
cultural geography. Achieving durable, real, change
in such a setting requires approaches informed by
system leadership. Within system leadership, setting
a guiding “north star” that can orient various parts of
the system toward contributing to a shared future is
the �rst step.
6
Diagnose and focus – identify the essential
in�exibilities. Focusing on �exibility may be
distinct from a more conventional emphasis on
using policy to change motivation – but it is still a
broad and vague term. The �rst step is focusing on
the forms of �exibility that will be most needed for
decarbonisation and adaptation. Is it switching jobs
and investments across sectors? Is it input switching,
for example, in green construction or energy sources
for industry? Value chain rearrangement that lessons
the transport needs and thus emissions, or enables
greater circularity of resource use?
The various forms of �exibility also have their
own political economy and other considerations.
Migration, for example, is an important form of
�exibility, but there are other considerations around
6
Senge, P., Hamilton, H., & Kania, J. (2014). The Dawn of System Leadership. Stanford Social Innovation Review, 13(1), 27–33.
https://doi.org/10.48558/YTE7-XT62 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
14
7
The majority of Americans rely on employer-sponsored health insurance to address the potentially high costs of health care.
Individually purchased insurance is available, but more expensive. For a summary of one such policy evaluation of policies that
might change the cost of access to health insurance and thus health care, see Government Accountability Of�ce memo on
“Health Care Coverage: Job Lock and the Potential Impact of the Patient Protection and Affordable Care Act,” https://www.gao.
gov/assets/gao-12-166r.pdf
economic and social geography as well as personal
preferences that may weigh against a focus on this
kind of mobility.
After the �exibility priorities have been identi�ed,
diagnostic effort needs to shift to hone in on the
micro-constraints to change. Why are people not
making the choices that would put them in a safer,
lower-carbon setting and profession? What are the
reasons that �rms are not replacing their energy
sources? If “net zero is net positive,” as a previous
speaker has noted, why is it not happening? Is it
access to credit? As a matter of entrepreneurship,
what is stopping small and large businesses from
investing in these new technologies? Is it access to
logistics and transport? Insurance? Working capital?
Skilled labour? What is stopping individuals from
shifting into new careers? Skills? Savings to support
time out of the labour force? Social expectations?
Methodologically, the diagnostic phase could
comprise a series of root cause analysis studies of
the key changes on the mitigation and adaptation
to do list. These cases would inevitably generate a
seemingly random, rambling, and potentially very
uncomfortable list of frictions to address. Identifying
and responding to the underlying frictions to change,
however, is an essential precursor to be able to
address both mitigation as well as adaptation needs.
Implement – organise, assign, and reward the
progress.
The list of in�exibilities will inevitably span issue areas
and levels of government, but for implementation
would need to be clustered into sub-areas of work
that can be assigned to (and funded) as part of
various agencies’ missions. This is often the step
at which integrated strategic efforts, from urban
planning to climate missions fall apart. Each of the
ministries, levels of government, businesses, and
other actors has their own existing set of goals and
operating environment and this additional task runs
the risk of just joining the queue.
One way to avoid this “valley of death” – to borrow
a term from other areas of innovation is to group
the �rst few �exibility investments to be relatively
small changes in the emphasis of existing agencies
and policy instruments rather than entirely new
programs. If adult education and reskilling turns out
to be an important area for increasing �exibility, build
on the National Skill Development Mission. If access
to credit turns out to be a signi�cant stumbling block
for industries to switch fuels or new businesses to
enter with more resilient business models, expand
existing programs for entrepreneurs and small and
medium enterprises.
Another way is to encourage �exibility investments
to come from within the existing structures rather
than impose them as an additional mandate. Reward
the leaders across levels and sectors of government,
business, and civil society for their contribution to
�exibility. There is precedent for evaluating policy
changes in terms of their contribution to �exibility.
A number of papers, for example, evaluate U.S.
healthcare reforms and proposals, for example, in
terms of their impact on “job lock,” or worker choices
to stay in jobs longer than they otherwise would
have.
7
A national mission on �exibility would be politically
challenging in several ways. A public focus on
�exibility could be seen as an imposition rather than
an opportunity – a failure to protect the aspects of
peoples’ lives that they value. It would be important
to build in some way of distributing the burden of
�exibility. The initial diagnosis of in�exibility could be
politically embarrassing – a litany of oversights and
omissions. The efforts to enlist cooperation across
sectors and levels of government could run into turf
wars. It would also, however, be a demonstration
of globally relevant leadership in building the
institutional architecture for new societal capabilities
that many countries need to thrive in times of
accelerating change. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
15
S
ince Professor Stevens has brought out
the overarching framework, I thought
I would delve deeper into some of the
concrete trade-offs. As Mr. Bery has
said very clearly, as well as of course,
Mr. Jayant Sinha, it’s not just that it is net positive
in the models, but how do we make it happen
and how do we deal with the trade-offs?
So that’s really the theme of what I’m going to
touch upon. At CEEW, our work is around the
system-level transformation modelling, but also
trying to translate all that into the quality-of-
life issues that ordinary citizens face, supported
by the enablers of �nance, technology, circular
economy, and resilience.
Let me start with the �rst trade-off regarding
internalising climate risks. The climate emergency
is exacerbating �scal challenges. Let me illustrate
this with a couple of examples. At CEEW, we’ve
been developing the �rst high-resolution climate
risk atlas for India. As those maps show, already
three-quarters of our districts are hotspots
for extreme climate events. 80% of Indians
are living in areas that are highly vulnerable to
extreme climate events. But what is even more
worrying is, if you see the second map, that 40%
of our districts are showing swapping trends.
Basically, what was traditionally �ood-prone is
becoming drought-prone and vice versa. This
then challenges not just climate models, in the
sense that the past is no longer a predictor of
the future, but also challenges administrative
capacity on the ground. If a district administration
has historically been more used to dealing with
droughts, how do they overnight become more
used to dealing with �oods?
Now, if you translate that at a global level, one
of the things that you see, and I want to draw
your attention particularly to the bottom panel
there, is that the low-income economies and
the low-middle-income economies are the ones
that suffer the most in terms of the percentage
of GDP that gets impacted by climate-related
disasters. That’s data for about two decades.
And you can see for those two categories, the
share of GDP getting impacted is well over 1%.
Whereas for the high-income or upper-middle-
income economies, the share is lower. So, this is
what is constraining the �scal space that these
economies are already struggling with and which
is part of the G20 agenda.
So how is the G20 dealing with it? One of the
innovations this year that has been introduced
is this new working group on disaster risk
reduction with a range of objectives: disaster-
resilient infrastructure �nancing, mainstreaming
of disaster resilience into policy, and so forth.
Equally, there is a global organisation that India
is promoting called the Coalition for Disaster
Resilient Infrastructure, which also has a focus
on speci�c foundational sectors like telecoms,
transport, particularly the airports, power,
�nance, etc. How do you make these elements of
your economy, of your broader economy, more
resilient?
How do we deal with that shrinking �scal space?
Last month, at the Paris Financing Summit, for
which I was an advisor to the French presidency,
we brought out a range of different ideas and
suggestions of what could be done. Of course,
the IMF has announced a Resilience and
Sustainability Trust, leading up to about $60
SPEAKER 3
ARUNABHA GHOSH A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
16
billion. Some estimates suggest that the so-called
$100 billion promise might be delivered this year
from developed countries and so forth. But
equally, we have to be innovative. For instance,
illicit �nancing �ows: Africa alone lost about $88
billion in tax revenue from illicit �ows between
2015 and 2020. We’ve got to act on the green
development agenda while not forgetting the
broader macroeconomic space creation agenda
that is necessary.
Let me now move to the second trade-off. And
I say these are trade-offs, notwithstanding what
Mr. Sinha said, with which I fully agree, that if you
actually do the modelling, the trade-offs might
not be there. But these are, at least in perception
and sometimes in very real terms, political trade-
offs that we have to confront. One of the trade-
offs is between energy access and clean energy.
Now, energy access is going to be the primary
driver for many developing countries as a political
priority. Between 2000 and now, India has given
access to electricity to 700 million people.
Between now and 2030, the world has to give
access to electricity to 700 million people, many
of whom are in sub-Saharan Africa. Effectively,
if India, since 2017 when we introduced the
Saubhagya scheme of household electri�cation,
connected 11,000 Indians to electricity every hour
over 18 months, 28 million homes got connected.
Now, between now and 2030, for the rest of the
world, every hour we have to connect 11 and a
half thousand human beings to electricity.
So, this is the scale of the challenge, which is why
then political leaders or policymakers might say,
“Look, my priority is to get power to the people.”
But is there really a trade-off? So at CEEW, we
did the �rst model of looking at net zero that
went beyond 2050 while trying to be consistent
with planetary integrity.
And what we found in the lead up to Glasgow
was that a 2070 target for India still ensures that
our emissions are 59% lower than China’s, 58%
lower than the United States, and 49% lower than
the European Union. But it gives us more time.
So, the real question is not just whether, in the
models, net zero becomes net positive, but how
do you create that policy room to peak and then
bring down your emissions?
Now, if you translate that globally, what we �nd;
based on some analysis I did for all emerging
markets in 2021, we see that 88% of all new A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
17
energy demand over the next two decades will
come from emerging markets, but their political
economies will be different. Some, like India and
China, will have to leapfrog from coal, as Mr. Sinha
was describing, and some might have to leapfrog
from gas and elsewhere. But that then raises this
question of how will all of this happen? Earlier
this month, I published a paper in Foreign Affairs
titled “Can India Become a Green Superpower?”
Now, what does that superpower really mean?
Over the last decade, you can see the exponential
increase in renewable energy capacity in India.
We are already the fourth-largest renewable
energy capacity in the world, with about 43% of
our installed generation capacity coming from
non-fossil sources. But that’s not enough. We are
also the second-largest national target for green
hydrogen, just short of the United States and just
short of the European Union’s collective target
for green hydrogen.
At CEEW, we also have a real-time electric vehicle
sales dashboard. You can get that information
down to every single regional transport of�ce,
and you can see the exponential rise in sales of
EVs. However, despite powering sustainability,
India, the fourth-largest renewable energy
market in the world, is getting less than 2.9% of
global clean energy investment. And then, if you
compare it with other countries, if India is getting
that much, all of Africa is getting even less, Brazil
is getting less, and so forth. And this is why the
point that the Sherpa made is not just about the
Green Development Pact in terms of the policies,
but how do we also get to the �nancing?
The basic problem with the �nancing is that the
risks perceived for investing in emerging markets
like India and elsewhere are far higher than the
risks realised. How do you actually de-risk?
When I analysed more than two dozen �nancial
initiatives that have been launched over the last
decade, less than 10 of them even attempted
to tackle investment risks. And this is why the
World Bank Reform agenda needs to think about
what is the platform for blended �nance to look
at risks across projects because often these are
non-project risks. These are related to currency,
policy risks, political risks, etc. So our proposal is
what is called the Global Clean Investment Risk
Mitigation Mechanism, a digital platform to pool
the risks across geographies and across projects
to lower the risk curve, and then use the limited
amount of public �nancing as the �rst loss to
bring down the cost of �nance.
Let me now turn to the third trade-off, which
is around energy security versus energy
sustainability. Now, of course, the Indian G20
presidency is happening against the backdrop of
serious concerns about energy security, but let
me also argue that it is not just energy security
of the fuels of the past but also energy security
of the fuels of the future that we have to be
concerned about. Take India again as the starting
example. Countries that export fossil fuels to us
are fairly diversi�ed. The regions from where we
get our renewable energy equipment are much
more concentrated. So, taking it beyond India,
the G20 tasked us with developing an of�cial
study on renewable energy supply chains. Over
the past decade, as many more countries have
started investing in clean energy, the dependency
on concentrated imports has gone up: in solar,
less than 40 countries with concentrated sources
of renewable energy imports going up to over
70; in wind, it has kind of stayed the same; lithium
and batteries have gone up from 19 to 49. So
energy security for the fuels of the future is
going to matter to make the political case that
the investments in clean energy can also be
consistent with energy sustainability and energy
security.
So, just last weekend at the Goa Energy Transition
Working Group ministerial, we, of course, did not
have a joint communique for reasons we all know.
But in the outcomes document, we see some
very encouraging signs. For the �rst time, there
is an extensive paragraph on critical minerals
for batteries as well as a separate section on
fuels of the future, along with agreed high-level
principles on hydrogen, as well as of course, the
usual mentions of bridging technology gaps and
universal energy access and so forth. So, we need
to now leverage these agreements.
Now, let me �nally come to the very last bit, the
last trade-off, around job growth and job losses.
Again, to pick up on the theme that Mr. Sinha very
clearly articulated, and not just his constituency,
but if you look across the country, we’ve got 266
of our 700-odd districts with at least one asset
linked to coal, 13 million people formally employed,
and there’s a much larger informal sector as well.
Now, can we combat this? At CEEW, we collect
data on the number of jobs being created in the
clean energy sectors. We estimate that by 2030
we’ll have a workforce of over a million people in
large-scale solar and wind. But that will translate
to nearly three and a half million full-time A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
18
equivalent jobs. Beyond that, if you look at the
role of distributed energy to power livelihoods,
especially in rural areas, our estimation is that it
is a $50 billion investment opportunity with the
potential to support 37 million livelihoods. And I
can get into more details on that front. We also
did analysis on the job gains and losses in the
electric vehicles versus the Internal Combustion
Engine (ICE) mobility sector.
There is a net job loss if you move away from
ICE. However, you can combat it by creating new
industries like battery recycling, installation, or
charging infrastructure and so forth. So, there
are ways to overcome even that major political
conundrum of job growth or job losses.
As I conclude, I want to simply bring it back to
what this means for, as Professor Stavins said,
what need not be global, but at least international
or multilateral of some kind. We’ve got to solve
for four market failures and four political failures
through the G20 and beyond.
The �rst market failure: going back to the issue
of risk, how do we deal with non-linear climate
risks that are rising over time? How do we create
an insurance cushion through a resilience reserve
fund? How do we deal with that delta between
perceived and real risk by creating a de-risking
platform? How do we price externalities, not just
carbon, but land, water, materials? By promoting
a circular economy that India has put forward
in its G20 agenda. And how do we promote
sustainable consumption, not just the supply side
of sustainable production, through “Lifestyle for
Environment,” the high-level principles for which
were agreed at the Development Working Group
last month.
Equally, there are political failures, and as much
as we are frustrated with the core processes, the
challenges that we have a lack of accountability,
not a lack of promises. How do you convert the
UNFCCC from a bank of depositing promises to
a bank of actions? How do we move away from
protectionism, from concentrated supply chains
to more diversi�ed yet interdependent supply
chains through technology co-development. How
do we have security for the fuels of the future
through the rules that will govern these new fuels?
And �nally, going back to the issue of jobs, how
do we have an orderly transition from fossil fuels
through not just energy transition partnerships
but joint energy transition partnerships?
I leave you with �ve questions. I think about these
for India, but perhaps they apply to the rest of the
world as well. What are the macro enablers for
this domestic green policy? How are we going to
increase the �scal space to deal with climate risk?
Are we politically ready to price resources? Can
we manage the macro-fundamentals of in�ation
or currency variability, which increases the cost
of �nance for clean investments? Do we have the
commercial diplomacy to support our strategic
diplomacy, supported with trade and industry
policy that creates these interdependent supply
chains? And �nally, do we have the political
maturity within and across our countries to
handle the distributional consequences? A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
19 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
20
SACHIN CHATURVEDI
Director General, Research
and Information System for
Developing Countries (RIS),
New Delhi (India)
ALBERT VAN
JAARSVELD
Director General, International
Institute for Applied Systems
Analysis (IASA) Laxenburg
(Austria)
PAUL SAMSON
President, Center for
International Governance
Innovation (CIGI) Waterloo
(Canada)
VIJAY KUMAR SARASWAT
Member, NITI Aayog
(India)
DEBJANI GHOSH
President, National Association
of Software & Services
Companies (NASSCOM)
New Delhi (India)
SESSION 2
TECHNOLOGY, POLICY, JOBS
July 28-29, 2023
Hotel ITC Maurya, New Delhi, India A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
21
SESSION CHAIR
I
think it’s absolutely important in terms of
thinking about the new development model
that we need when we are talking about several
challenges that are there. I think, as all of you
would agree, the technology, positioning of
technology and the policy that we require for
technology, it works in an ecosystem.
And that ecosystem requires us as in the previous
session, we heard Jessica and Arunabha both
alluding to the idea of industrial policy. So how
technology policy, industrial policy, and trade
policy converge or diverge in what way incentives
or disincentives come up? The act that was
referred to in the previous discussion in terms of
how the US subsidy regime is actually accelerating
the quantum that is required to support and also
to absorb the kind of changes that we are looking
at.
So, from that perspective, the role that multilateral
institutions should play, the kind of positioning
that they can do, particularly in an era where we
are seeing a transition in the very nature of jobs
that are being created. If you pick up the latest
report from UNIDO on the Asian scenario in
industrial policymaking.
The amount of effort that all Asian countries
are putting together is absolutely clear. They all
are going in the direction of evolving industrial
policies. They are evolving mechanisms which
are strengthening the processes. And they’re also
looking into largely the implications of digital
labour platforms that are coming in and how they
are transforming the future of work, in what way
new models of development they are contributing
to.
And also, in terms of new labour relations that are
coming up along with that. And in that process,
if we see the crisis of multilateralism, which gets
juxtaposed in terms of adding more to that
complexity that we are talking of the impact
of exogenous shocks. We talked about climate
change, but then certainly the debt crisis, the
�nancial crisis, sometimes the national challenges
that are there, I think they all in a way complicate
the situation and the scenario where technology
has to perform and the nature of technology that
is to be absorbed.
The support mechanisms that these institutions
bring in also require a bit of a challenge even
within India, if you see a large amount of effort
has gone in last couple of years to enhance the
size of the digital economy in India. In 2017-18,
when it was somewhere close to $200 billion. We
are expecting by 2025, it would be $1 trillion. And
this would be something which would be huge in
terms of how we look at in terms of the job pro�le
that would come up.
Even the data center economy has expanded,
which was something like $4.4 billion in 2021,
and we are expecting that by 24-25, it would be
close to $8 billion. So, you can see the pace at
which this change is happening and the amount
SACHIN CHATURVEDI A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
22
of change in the nature of jobs, the nature of
insecurities that are coming in.
The way labour unions, the way groupings on
labour are looking into. So, the standard design
that IMF and World Bank follow at some point
in terms of structural adjustment program, we
need to see what way we bring in a large chunk
of people within this. And that largely, as chair
very rightly pointed out, brings in the new policy
model that is needed. And that also in a way
contributes to the larger area of coping up with
several exogenous shocks that are coming in.
We have an excellent panel today that is going
to bring in several of these dimensions together.
Bringing in issues which are related to migration
that is happening, issues that are related to
Arti�cial Intelligence (AI) and its role. As you
know, in the G20 presidency of India, as was also
in the Indonesian presidency.
The AI and ethics, they were analysed, commented
upon. And India’s own declaration would bring
some of these concerns forward. And that
would also contribute in terms of how the wider
development policy framework comes up. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
23
I
am going to stress some issues that I think are
�rst order issues for what we are talking about
today. I will say right up front that what I am
trying to do is introduce the concept of global
change in a broad sense, and then we’ll talk
about demographics, economies, and then move
on to the environment and technology.
I’ll add some caveats right away that this graphic is
intentionally provocative. Anything that goes back
1000 years in terms of data can be challenged.
This chart has as the vertical axis growth
(global percentage of the economy measured
in purchasing power parity (PPP)) and time on
the horizontal axis, over the last thousand years.
The caveats are, of course, that the grouping of
these countries can be challenged. The groupings
used here have generally included more rather
than less. For example, it has grouped Africa all
together, which includes North Africa and Sub-
Saharan Africa.
The point in this slide is to emphasise a couple
of things. One, is that demography tends to be
the great equaliser over time. That the large
blocks or groupings have an advantage through
the size of their population to generate more
internal economy, and to become a bigger global
economic force.
But at the same time, you can see the emergence of
technology playing strongly here. Other historical
PAUL SAMSON
SPEAKER 1 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
24
factors matter too. And we could spend a lot of
time on this, but what I really want to point you
towards is what happened in the last 20 years or
so, where you have a couple of stories. One is that if
you look at the 2000 data there, which is the third
from the right, you see an incredible story of China’s
economic emergence, or re-emergence. We can
debate whether PPP is the right way to measure
the economy or not, but the trend is still there. An
incredible jump in 20 years. And at the same time,
you have, now projected an incredible jump for
India over the next 20 years. But in the case of India,
both a relatively young population and a rapidly
growing economy. The United States interestingly
is relatively stable in terms of a share of the global
economy from now to projections for 2040.
The other thing I wanted to point out here was
Africa, which again is all of Africa. It is emerging
rapidly towards a huge share of global population,
and by 2040, is the most populous area in the
chart. And so, a key question is, what will the
economy do there?
My next point is on exponential change, and
it’s come up in many ways in the conversation
already. Humans are not very good at thinking
about exponential change. Institutions are not
very good at adjusting to exponential change.
And yet if you look at what’s happened over the
last, hundred years, couple of hundred years, and
certainly the last couple of decades, many things
are changing exponentially.
When you think of this concretely, of course,
linear change adding one increment, whereas
exponential change can be doubling or more.
And suddenly you’ve blasted off in a way that has
not been forecasted; or at least the change has
not been absorbed by institutions.
What does this tell us about where things are
going? I would say that, on the environmental
side it’s quite easy to look at what has happened
since the industrial revolution. This chart shows
CO
2
concentrations, both from ice core samples
and from real time samples in the atmosphere
now, and some modelling.
CO
2
concentrations are clearly a case of exponential
change. It was already growing quite rapidly due to
human population, but in a relatively linear manner,
and then it exploded. And I think you could draw out
the same parallel for any number of environmental
issues. You could do the same thing for biodiversity
loss, similar things for oceanic pollution, forestry,
and other natural systems.
One of the things that the last slide was trying
to emphasise is that the transition from linear to
exponential can create higher uncertainty; higher A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
25
chances of risk; and a higher chance of surprise.
Those dynamics are playing out right now on the
environment side. I was very glad that climate
change was both presented as a mitigation and
an adaptation challenge in the previous session.
But there is also the risk of surprise in their tipping
points occurring; a black swan event that when you
look at backwards seems relatively predictable—
like the North Atlantic current scientists have
been concerned about for decades.
On the technology diffusion and adoption side,
again, the linear trends changed over much of
human history into exponential trends. And when
you look back over the last a hundred years or
so, or 150 years, you start to see sharp diffusion
curves for most technology. Whether it’s running
water, refrigerators, these kinds of things start to
take off quite sharply. But then in the last couple
of decades, the exponentiality has increased
much more. And it has increased at a global level
that is unprecedented, where you might see it
not necessarily uniformly globally, but certainly
globally simultaneously.
The examples here are ones that people will
be familiar with, that took several years for this
very sharp diffusion curve to ChatGPT, Open
AI’s online tool that reached a level of fusion, not
seen since the game Candy Crush, which was
irresistible. And so, we’re seeing this across many,
many trends. Certainly, on the technology side, I
would argue also on environmental side.
Finally, on to AI. Now one can debate how much
AI has impacted innovation and productivity so
far. But AI has now gone mainstream. I think the
moment, as with the apps cited, something is
accessible in a way that has not previously been
the case, the diffusion curve takes off. So that’s
what we’ve seen with AI. I think that there’s no
question that it is what is referred to as a general-
purpose technology, which then tends to spin off
all kinds of other things. Examples in history are
electricity, probably the printing press, and some
would go even further.
Of course, there have been booms and busts in
the past, so what does this mean right now? I think
that countries are struggling with how to integrate
AI. I think there is an important context that was
mentioned already several times about the new
industrial policies/protectionist policies in many
cases have made the adjustment to AI that much
higher stakes because this is one of the areas
which may get away from some of the traditional
economic growth engines in recent decades.
One wonders how automation could be a good
thing for a country like India that is seeking to create
as many jobs as possible with a young population.
But I think that in history, the jobs transition has A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
26
often, as was mentioned earlier today, can work
out to be a net positive. The phrase used earlier:
net-zero is net-positive overall. You know, AI
could be a net positive overall, I think if managed
appropriately and properly like textiles and other
mechanisations that have occurred.
What is the path for India here? I think there is a
soft power opportunity where India can promote
its own interests and demonstrate a path for
developing countries. I think the India stack; the
digital public infrastructure does propose a very
interesting model. I think there are positives on
settlements and digital ID and payment systems,
and remaining challenges on privacy governance.
I think for a global conversation, there is an
opportunity for India to promote that. It is very
interesting because you have China and the US
as the leaders you would expect on these global
effects or AI. But India’s trajectory is interestingly,
and I think other developing countries could also
position themselves on hiring AI skills and AI talent
that are preparing the economy of the future. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
27
T
his input will focus on some of the
policy and jobs issues that we see from
our side as an institute, an institute that
prefers to integrate across disciplines
and across ministerial mandates to �nd
pathways to a sustainable future.
It has now also become apparent to all that we
are not doing great as far as progress with the
SDGs are concerned. This problem is a real focus
of IIASA work, and we are always exploring ways
to advance the 2030 Global Agenda. But �rst, a
quick overview of the executive summary of the
World Economic Forum (WEF) Report on the
Future of Jobs (2023) to highlight some of the
key messages:
i. Technology adoption is clearly seen as a
key driver for business transformation.
ii. A degree of job creation and destruction
from environmental, technology, and
economic trends is anticipated.
iii. The technology job impacts are net positive
over the next �ve years.
iv. In the space of the human-machine frontier,
it appears that automation is running at a
slower pace than originally anticipated.
v. A structural labour market churn of some
23% is anticipated over the next �ve years
with growth in skilled technology and
sustainability domains and declines in
routine administrative functions. Analytical
thinking and creative thinking will be some
of the most important skills for workers
moving forward.
vi. Many of the report respondents felt positive
about their ability to train the capacities
they need within the context of their
workforce, but
vii. There were some concerns expressed about
getting access attracting the right talent to
drive industries forward.
This WEF report provides a sense of the anticipated
jobs environment over the next 5 years. The focus
now shifts to some of the externalities that are
likely to impact these job trend expectations over
the coming years.
First, is the impact of aging global populations.
The proportion of the global population that is
over 65 years of age is increasing, and this growth
in the elderly is outpacing new population recruits.
This trend is anticipated to accelerate into the
future and the transition to recognised aging
populations will expand. Aging populations have
consequences as they affect the proportion of the
active workforce, the proportion of taxpayers and
the degree of social dependency for the elderly.
This phenomenon continues to raise policy and
political concerns across the world. One potential
resolution is to try and stimulate labour force
participation by interventions that will promote
broader participation in the workforce, especially
female participation and to try to encourage
people to work slightly longer, beyond 65 years
of age, to ensure that critical skills are retained
across the workforce.
A key driver for acquiring the required future
skills in an economy is education. Education
also fast-tracks the process of population aging
ALBERT VAN JAARSVELD
SPEAKER 2 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
28
because it affects fertility patterns. It is possible
for countries like India, with growing populations,
to achieve a demographic transition by 2060 if
the right progressive post-secondary and upper
secondary education policies and incentives are
in place (IIASA Policy Briefs, 2016). However,
even a focused education drive can fail if access
to basic human needs in terms of physical well-
being and safety are not in place.
Rapid transitions in national population
demographics are possible. Over the last 60 years,
the Republic of Korea has transformed itself from
a typical youthful population to a typical aging
population (Lutz et al., 2020). The consequences
of this transition are stark and occupying the
minds of policy makers in the Republic of Korea
at present.
Important IIASA work has demonstrated that
even a shifting demographic pattern does not
necessarily threaten the prospects of a population
being competitive into the future. Here it is
important to shift the policy emphasis from the
size of the workforce towards the quality of that
workforce in terms of its productivity and what
it can deliver. Quality, more than quantity, will
determine competitiveness at the end of the day.
Consequently, there is an opportunity to mitigate
the consequences of an aging population at
least partially by ensuring that the quality of the
workforce increases over time through appropriate
education interventions (Marois, 2021).
A more sensitive part of the demographic debate,
is of course, the issue of migration. IIASA work
has demonstrated that on average about 0,65%
of the global population is always on the move,
migrating from one part of the world to another.
However, this background pattern will likely be
altered due to emergent patterns of environmental
and climate change (Hoffman et al. 2020). There
are some regions where the current migration
patterns will increase and other regions where
they will likely decline over the coming years due
to environmental pressures.
Increasing global inequality will also bring its own
pressures to bear. To demonstrate the formidable
challenge this problem poses, modelling work
conducted at IIASA demonstrates that for just a
few Earth system variables (nitrogen, phosphorus,
land use, water, and carbon emissions), achieving
equitable access for all would require telling and
radical shifts across these variables, especially for
carbon emissions (Rammelt et al., 2022).
Dealing with the rising inequality conundrum
may require new and radical socio-economic
solutions (Piketty 2014). One approach, which
has been tested with some success (see Table
1), and which is becoming a popular global
discussion, is the potential value of a basic income
grant. Table 1 presents a short summary of the
potential bene�ts and negatives associated with
a basic income grant. This summary is taken
from the Moneycrashers website (see reference
below) and includes some enhancements about
potential counter arguments, supporting or
mitigation stances). It is clear from Table 1 that
this approach merits serious policy consideration
and that many reasons not to implement can
be reasonably easily dealt with. The high-cost
argument may however eventually be overrun
by the scale of social disruption faced by highly
unequal societies. Maybe there will be a point
where societies can simply not afford to not
implement a basic income grant.
Table 1. Basic Income Grant (BIG) as a potential
game changer: This table summarises reasons to
implement or not implement a basic income grant
adapted from Moneycrashers - https://www.
moneycrashers.com/pros-and-cons-universal-
basic-income. (Counterarguments or supporting
or mitigating responses are provided in brackets
and relevant case studies are listed at the end of
the table).
10 Good reasons why?
1. Reduce poverty6. Improve wages (Alaska – no in�ationary impact)
2. Reduce inequality7. Support care givers
3. Eliminate the need for government programs 8. More freedom for domestic violence victims
4. Improve physical and mental health 9. Encourage entrepreneurship
5. Make higher education more accessible10. Protect workers from economic shocks A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
29
6 Reasons why not?
1. High cost (may not be able to afford not to implement due to social disruption. Estimates provided thus far
are based on First World (rather: industrialised nations’) calculations and suggested that level of basic income
was either too low or that the cost of provision was too high; BIG can be set at affordable and impactful levels)
2. Reduce incentive to work – promote laziness (no evidence from Kenya, India and Finland – BIG should not be
too generous)
3. Extra money to those that do not need it (BIG can be recovered through tax system from people with income.
Major secondary bene�t is that everyone that receives BIG is on the tax system)
4. Diminished self-worth - will encourage alienated idle (not relevant if all receive it and should not necessarily
be a comfortable living wage. Would avoid paycheck capture and allows people to consider more meaningful
careers)
5. Reduce wages (should be lower than a comfortable living wage – minimum wages can be legislated)
6. Does not address the root causes of poverty – addiction, poor health, lack of education and skills (BIG will
increase coping capacity – World Bank)
Case studies
• The world’s �rst guaranteed income programme, called the Speenhamland System, saved many families
in rural England from starvation between 1795 and 1834.
• Between 2007 and 2009, the Basic Income Grant programme in Namibia cut the nation’s poverty rate
nearly in half.
• Between 2003 and 2015, a guaranteed income programme in Brazil called Bolsa Familia cut that
country’s poverty rate by more than three-quarters.
• A 2016 University of Alaska study of the Alaska Permanent Fund, a programme that gives a modest
cash payment (around $1,000 per year) to all state residents, found that it kept between 15,000 and
25,000 Alaskans out of poverty each year.
• In the 2010s, UBI trials run by GiveDirectly in Kenya and Uganda boosted participants’ earnings, assets,
and nutrition.
• In 2017, a basic income pilot programme in Ontario helped participants save more, pay off debt, and
improve their living standards.
• Another trial that same year in Finland signi�cantly improved participants’ �nancial health.
A 2019 UNICEF report on Iran’s basic income program, which gave Iranians monthly cash transfers equal to
about $1.50 per day, found that it had signi�cantly reduced poverty in that nation.
In determining sustainable development progress,
IIASA typically focuses on the broader matter of
human well-being rather than only the narrow SDG
measures of economic, social or environmental
performance. The IIASA measure of “Years of
Good Life” (Lutz et al., 2021) includes quantitative
and qualitative assessments of human well-being,
including life expectancy, mental well-being, and
more subjective measures such as happiness. This
overarching measure also gives us a more inclusive
picture and systemic view of whether we are making
progress in terms of sustainable development as a
society (Lutz & Pachauri, 2023).
A further externality that will likely impact
employment and jobs is the increased tendency
for economic club formation across the globe
(UNCTAD, 2022). These economic trends, if
persistent, will likely further skew migration patterns
and people skills exchanges into the future.
Lastly, it is imperative for achieving the SDGs and
sustainable development that a more effective
multilateral system of cooperation is promoted and
developed. The range of geopolitical forces at play
today, together with the externalities discussed here,
and that can impact on jobs and skills requirements
of nation states, suggests that no nation state will
resolve their skills, productivity, and sustainability
ambitions unilaterally. A sustainable future
requires systemic thinking, effective multilateral
cooperation around matters of mutual interest to
develop impactful developmental pathways. In
this regard IIASA has made inputs into the G20 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
30
process by convening policy discussions in areas
of reform required in the UN system, the World
Trade Organisation, the World Health Organisation,
as well as climate �nance environments. It is our
hope these conversations will help ensure that the
multilateral system becomes stronger in the future,
rather than being weakened by many current
geopolitical trends.
References
Hoffmann R, Dimitrova A, Muttarak R, Crespo
Cuaresma J, & Peisker J (2020). A Meta-Analysis
of Country-Level Studies on Environmental Change
and Migration. Nature Climate Change DOI: 10.1038/
s41558-020-0898-6
IIASA Policy Briefs (2016) Analyzing Population
Aging from a new perspective. IIASA Policy Briefs
12:
https://iiasa.ac.at
Lutz W, Reiter C, Özdemir C, Yildiz D, Guimaraes
R, & Goujon A (2020). Skills-adjusted human
capital shows rising global gap. Proceedings of the
National Academy of Sciences of the United States
of America (PNAS) DOI: 10.1073/pnas.2015826118
[pure.iiasa.ac.at/17034]
Lutz, W., Striessnig, E., Dimitrova, A., Ghislandi,
W., Lijadi, A., Reiter, C., Spitzer, S., Yildiz, D. (2021).
Years of Good Life (YoGL) is a wellbeing indicator
designed to serve research on sustainability.
Proceedings of the National Academy of Sciences
(PNAS) DOI: 10.1073/pnas.1907351
Lutz, W., & Pachauri, S. (Eds.) (2023). Systems
Analysis for Sustainable Wellbeing. 50 Years of
IIASA Research, 40 Years After the Brundtland
Commission, Contributing to the Post-2030 Global
Agenda. International Institute for Applied Systems
Analysis (IIASA), Laxenburg, Austria. DOI: 10.5281/
zenodo.8214208.
Marois G, Gietel-Basten S, Lutz W. (2021).
China’s low fertility may not hinder future
prosperity. Proceedings of the National Academies
of Sciences (PNAS) DOI:10.1073/pnas.2108900118
Piketty, T. (2014). Capital in the 21
st
Century, Harvard
University Press, London.
Rammelt, C.F., Gupta, J., Liverman, D., Scholtens,
J., Ciobanu, D., Abrams, J.F., Bai, X., Gifford, L., et
al. (2022). Impacts of meeting minimum access on
critical earth systems amidst the Great Inequality.
Nature Sustainability DOI: 10.1038/s41893-022-
00995-5
UNCTAD (2022). Friend-shoring and increasing
concentration for global trade.
https://www.
hinrichfoundation.com/research/how-to-use-it/
unctad-global-trade-update/
World Economic Forum (2023). The Future of Jobs
Report.
https://www.weforum.org/reports/the-
future-of-jobs-report-2023/ A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
31
I
focus a bit on the policy dilemma. Actually,
when building the presentation, I thought
I’d call it “policy imperatives.” But we do not
know today what the imperatives are. We have
opinions, we have a lot of opinions, and even
more questions. But I think the next few months
are going to be critical for us to get together and
�gure out what the imperatives are and change
it from the dilemma to imperatives and answers.
So, I’m going to cover three broad things. I’m
going to talk very quickly because Paul has
touched on some of it: the step change in AI
and the key considerations. Why should we care
about it? Why should we care, and what are the
key policy considerations that come out of it?
We’ve been talking about AI for a very long
time. At least since 2015 or 2016, we have been
saying AI is going to change the world. Around
2021, we shifted to saying cryptocurrency is
going to change the world. Then, in 2022, we
again said AI is going to change the world. But
something happened in the last eight or nine
months. In November 2022, OpenAI launched
an application on top of a GPT, a generative pre-
trained transformer they were building, called
ChatGPT. What we saw is the beginning of the
race to Arti�cial General Intelligence (AGI). That’s
what the industry calls it. Suddenly, we saw a step
change in technology. It completely changed
the dynamics of how we humans relate to this
technology called AI. AI has been in our lives for
a long time. Every time you use your phone or
get into an automated lift, AI is there, working in
the background. But suddenly, it became a part
of our lives. It became a co-pilot for us. That was
the real big change we saw.
I want to talk very quickly about some of the key
considerations it’s going to bring about. First,
the ushering in of the era of generative AI, where
we have technology that is mimicking human
intelligence. While there’s a lot of excitement
about the images created by AI, the real magic is
its ability to understand language and the context
behind language, which in my mind is game-
changing. It integrates a layer of intelligence into
everything we do.
Four key considerations I want to leave you with:
1. Is this the next big platform shift? We
believe yes. The �rst was the internet, then
came the cloud. In 10 years, how much
penetration did each achieve? Consumer
penetration cloud was 31%. US smartphone
was 54.79%. We believe that generative AI
will cross 65% penetration, which seems
conservative given the pace of adoption we
see today.
2. The importance of language in generative AI.
AI today, thanks to its ability to understand
context and human language, is nearing
human baseline across modalities: text,
speech, and images. We’ve seen chatbots
pass US law exams and Google’s MedPalM2
score 86.5 on MedQA, a tough medical
examination. And even more interesting,
was that a panel of 15 human doctors rated
med Palm two versus other human doctors,
and they found that out of nine parameters,
machine AI did better on eight versus human
doctors. The only parameter where it did
DEBJANI GHOSH
SPEAKER 3 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
32
less than human doctors was accuracy.
3. The shift in technology adoption. It took
platforms like ChatGPT just �ve days to
reach 1 million users. The trigger? English.
You didn’t need to be a data scientist
or know any coding language to use AI.
English became the most important coding
language.
4. Why should we care? A foundational layer
of intelligence will be embedded into every
product and service. Goldman Sachs said
that if implemented right, we could see a
7% increase in global GDP. AI is becoming
a tool of economic growth, a key driver. If
the US implements this right, they could get
a 1.5% boost in productivity, essential for a
country with a rapidly ageing population
and declining productivity.
This is going to be immensely important for all
countries to think through. Then comes solving
for mega challenges, from drug discovery to
climate change, then comes national security. In
fact, it was interesting to see, last week, the AI
team or task force that President Biden has set
up. This is what came out of it: experts urged
the US to increase competitiveness with China
through AI and spectrum. The bottom line was,
if the US doesn’t lead, China will. This applies
to pretty much all countries. If you are thinking
about national competitiveness and you’re not
applying the technology lens or the AI lens, there
is a problem.
There are three things that are shaping or driving
this evolution that I talked about: access to data
(and not just a lot of data but access to a lot
of high-quality data), access to AI computing,
and access to the mega bucks. Who has that
investment? What we are seeing is companies
and countries with access to all three are shaping
the AI roadmap and impact today. Today, if you
look at it, most of the foundational models which
are driving or powering the AI revolution are built
in the US, and China will soon catch up.
What about other countries? Do we want to have
a say in the shaping of the AI roadmap or not?
That’s the question we need to debate. And how
do we regulate everything that comes with it?
For those of you who read Collingridge, what
he said is becoming so relevant because if you
regulate it early, you’re going to sti�e innovation.
But if you wait till it’s mature, it’s too late to
regulate. So where do you start? Where’s the
balance? That’s the question we need to ask.
The key challenges are the pace of technology,
which is evolving way faster than we humans can
adapt. Then we have ethical considerations, bias,
misinformation, the high cost of development,
and the increasing carbon footprint of training
the models. This is going to be the opposite
of everything we heard in the morning and
progress towards the SDG goals. There are
also tremendously high entry barriers, job
displacement, which both Paul and Albert talked
about. And last but not least, when you talk
about regulation, one country’s regulation will
soon become another country’s competitive
advantage. Given that AI and technology do not
know or respect boundaries, if you stop it in one
country, it can easily move to another country to
continue with the innovation.
I’m going to quickly leave you with six key areas
that I think need to be thought through as we
consider how to regulate AI:
The balance between innovation and regulation.
Do we take the approach of saying, let’s not
regulate R&D, but let’s regulate commercialisation?
And then of course is the, the example of what
happened with the atom bomb. And with
Oppenheimer coming out, it’s raising a lot of
questions? But this is something fundamental
that has to get debated.
Do we need new laws? What is AI doing? It’s
increasing our ability to misinform. It’s increasing
our ability to steal other people’s ideas and art.
It’s to carry on maybe very sophisticated levels of
scams. But these are behaviours that have been
existing for a very long time.
So, do you need new laws or do you need to
update the existing regulatory ecosystem that
exists in countries to ensure that they are adapted
and they are ready for the world of AI? I talked
about how AI doesn’t, respect any boundaries.
So, a global approach is going to be absolutely
critical, but may the force be with you as you
�gure out how to bring in all countries to arrive at
a global approach.
I think harmonisation around design principles in
my mind is the best thing that we can do, and I do
hope that G20 kicks off that discussion. Barriers.
We’ve talked about moats. We’ve talked about
entry level barriers. This is important to consider
because this will shape who controls AI. Are A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
33
we going to leave the control to only a few big
companies and a few countries?
Or will everyone, or should everyone have a say?
It is going to be very dif�cult for a country like
India to catch up if we follow sequentially. But
what India has is tremendous engineering power.
Catching up is going to be tremendously dif�cult.
Race to AGI, who decides how it’ll be used? It is
happening. How do you decide, and last but not the
least, the role of industry. I just want to leave you with
this. US announced that how industries have come
together to create a self-governance framework.
Industry in India, the entire tech industry
in India, 30 companies actually led this effort,
came together to create a self-governance
framework for generative AI, which is available
publicly for anyone who’s interested. So,
this is a very important part of thinking about
regulation. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
34
A
fter listening to all the experts who
spoke on various subjects related to
technology, jobs, and policies, I would
like to connect the three in the context
of sustainable economic development.
While we all agree that policy encourages the
creation of disruptive technologies, technology
enables the disruption of jobs and stimulates
growth, and jobs, of course, deliver growth and
thereby, in�uence policy. This is the dominant
rhetoric of today, with examples like AI and
industrial automation in mind. At the same time,
we must remember that there exists another
virtuous cycle that is often overlooked. Here, jobs
incorporate technology to improve growth, and
technology ampli�es this growth to drive policy,
which in turn, creates more such jobs. We should
recall that it was this kind of cycle that led India’s
ICT services sector to become the global leader
that it is today.
The main thing which has been discussed so
far is that technology has been signi�cantly
affecting the job landscape, and the dichotomy
presents a unique challenge for policy-making
as to how to balance it. We should also look
at these technological developments in the
context of the forecasts made by very eminent
scientists like Stephen Hawking and even tech
philanthropists like Bill Gates, who mentioned
that generative AI is likely to be one of the
occurrences leading to doomsday and is going
to have serious impacts as far as Planet Earth is
concerned. Notwithstanding the severity of these
predictions, we must acknowledge that these
disruptive technologies change how individuals
live and how society works. We must see it as a
process of “constructive demolition” of old ways.
So, when we now make our policies or important
decisions, I think some of these forecasts have
to be taken into consideration. In that context,
governments have introduced several policies
aimed at promoting technologies and adoption
and mitigating the adverse effects of that.
India, of course, has been pursuing its digital
economy exponentially over the last few decades
with increased penetration of the internet and
digital infrastructure development and startup
ecosystem.
Today, we have the second-largest online market
worldwide. The IT Business Process Management
industry is a signi�cant contributor to India’s
GDP and employment industry. Revenue in India
reached about 194 billion in 2020, employing
about 4.36 million people. I’m just trying to say
that this situation is also because information
technology �rst disrupted and then created
jobs. We must understand that the rise of new
technologies is simply an exogenous shock, and
we as policymakers are responsible for creating
opportunities and employment from them.
I acknowledge that while technology has been a
catalyst for job creation, it also poses signi�cant
challenges in terms of job displacement due to
automation. I will give you some examples of
both cases. On one hand, Indian unicorns and
startups have created over one lakh jobs every
year since 2019, and new roles have been created
like data scientists, AI specialists, and digital
marketers. But on the other hand, It has been
VIJAY KUMAR SARASWAT
EXPERT COMMENT A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
35
predicted that about 69% of jobs in India are
threatened by automation. It is estimated that
56% of the salaried employment in Cambodia,
Indonesia, Philippines, Thailand, and Vietnam
are at high risk of displacement. In India too, it is
estimated that by 2030, 9% of our work hours in
India could be automated. So, there is a challenge
for policymakers to leverage the job-creating
potential of technology while mitigating its
adverse impact.
In addition to that, the rapid pace of technological
advancement has also brought challenges,
especially for traditional sectors like manufacturing
and services, which are particularly vulnerable
to automation. The rise of AI, as brought out by
earlier speakers, and machine learning (ML) has
raised concerns about job displacement. Policy
plays a major role here in ensuring that these
technologies can be effectively catalysed to yield
jobs, and in turn, sustainable growth.
In that respect, I think the Government of India has
taken major initiatives like our Digital India, which
is responsible for empowering every citizen with
a full suite of Digital Public Infrastructure (DPI)
products and services. Similarly, there has been
an effort to leverage and cultivate the innovative
entrepreneurial spirit through the Startup
India initiative and the Atal Innovation Mission.
These policies are certainly very important for
leveraging technology to create a future of jobs
that is inclusive, sustainable, and prosperous.
Now, certain recommendations should be looked
at for driving the job market. These include
policies like skill development and reskilling, social
security for displaced workers, inclusive digital
infrastructure policy, and regulation of emerging
technologies like creating an independent
regulatory body for AI and ML to address key
issues raised by earlier speakers. Public-private
partnership is one of the major requirements,
and international cooperation will certainly pave
a major way.
I also agree with earlier speakers who spoke of a
multilateral approach to solving these challenges.
Measures like exchanging best practices,
collaborating, and coordinating policies on
forums like G20, Digital Learning, and Economic
Task Force will be important. There is a major
advantage of adopting frontier technologies,
which help in economic growth, development, job
creation, improving public services, addressing
social changes, and promoting innovation. It is my
�rm belief that a focus on such socioeconomic
development-oriented applications of disruptive
technologies will help ensure they transform,
rather than displace, jobs. Which, I believe, will
yield long-term sustainable growth.
The Government of India, and more speci�cally
the NITI Aayog, has been actively working
towards this goal. This begins with a range of
modern policies on cutting-edge technologies
like the National Policy on Electronics 2019 and
the Indian Space Policy 2023; covering crucial
missions like the National Supercomputing
Mission and the National Quantum Technologies
Mission; and extends to strategies for emerging
technology areas like the National Strategy on
AI and Blockchain and the 6G Vision. So there
should be some adoption of these frontier
technologies which will help us in solving the
problems which we’re discussing today. For
that, we should develop a comprehensive policy
framework for the adoption and regulation of
frontier technology.
We should invest in building robust and inclusive
digital infrastructure. We should improve digital
literacy, which will bring in more skills and jobs. We
should bring in public-private partnerships and
create more international forums to learn from
global best practices. The Industry should look at
invest in R&D in frontier technologies, train the
workforce in skills needed for these technologies,
ensure the ethical use of frontier technologies,
collaborate with academia to drive research, and
create a talent pipeline. The Academia should
improve the curriculum by incorporating Frontier
Technologies, and conduct research towards
their applications. They should collaborate with
the industry to reduce the skill gap, and explore
interdisciplinary learning to understand the
intersection of technology with other �elds like
economics, sociology, and law.
To conclude, I would say that given India’s
ambition of becoming a global technology leader,
there’s a strong impetus to develop emerging
technologies from drug discovery and precision
farming to mega factories for batteries and EVs.
The industry of today increasingly requires higher
degrees of automation. We need to accept the
inevitable transition to a technology-led society
and economy. More needs to be done to ensure
that the bene�ts of technology are inclusive and
the transition to a digital economy does not
exacerbate inequalities. This was also discussed,
so we should focus on skill development and A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
36
reskilling, promoting innovation and startups,
providing social security for displaced workers,
building inclusive digital infrastructure, regulating
new technologies, encouraging public-private
partnerships, and fostering international
cooperation.
I would like to take a moment to also dwell on the
linkages between technologies and policies to
drive growth. First and foremost, as policymakers,
we must anticipatively project the transition that
the labour force will experience, and accordingly
roll out social security and re-skilling measures to
make that transition smooth. Second, we need to
reimagine workspaces in the era of automation
and AI, creating new structures that draw out
more human creativity and intelligence. Recall
how the calculator �rst entered the of�ce, how
people thought it would affect them, and how
much it really affected them. This brings me to
the third link, pedagogy. There is no escaping the
reality that our education system needs a massive
overhaul, moving away from a mechanical and
disengaged subject-based learning model to a
dynamic and engaging systems-based learning
model, with a strong emphasis on critical thinking.
The task is challenging, my friends, but with a
proactive and forward-looking policy approach,
the globe, as well as India, can leverage
technology to create a future of jobs that is
inclusive, sustainable, and prosperous. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
37 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
38
PETER DRYSDALE
Emeritus Professor of Economics
and Head of the East Asian
Bureau of Economic Research,
Australian National University,
Canberra (Australia)
NAGESH KUMAR
Director and Chief Executive,
Institute for Studies in
Industrial Development (ISID),
New Delhi (India)
ALICIA GARCIA-
HERRERO
Chief Economist, Asia Paci�c
Natixis, Madrid (Spain)
BVR SUBRAHMANYAM
CEO, NITI Aayog
(India)
OTAVIANO CANUTO
Senior Fellow, Policy Center for
the New South (Brazil)
July 28-29, 2023
Hotel ITC Maurya, New Delhi, India
SESSION 3
GROWTH IMPLICATIONS OF
A FRACTURED TRADING SYSTEM A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
39
SESSION CHAIR
S
o, this session really is about what’s
happened to global trade in the last
couple of decades, of course, really
since the global �nancial crisis, trade
dependency has leveled off, peaking at
around 60% in 2008, 2009.
After the global �nancial crisis, it has fallen and
hovered around 50 to 55%, which is a re�ection
of the falling relative shares of world trade and
global output. And what the origins of this are
rather important to making judgements about
policy strategies down the track. And of course,
this context informs a lot of the thinking about
where to go next on a whole range of issues
including climate change.
But development strategy as well. We’ve seen a
signi�cant increase in trade restrictions over that
period, the last decade. The Global Trade alert
records restrictive measures to have increased
from about 9,000 a year to 35,000. And there’s
actually the measures that the IMF and others have
set out under report the growing restrictiveness
of international trade. A lot of informal measures
and formal measures, especially anti-dumping
acts, have become major instruments for trade
protectionism.
And then we have more recent developments
towards industrial policy, the IRA in the
United States, the Chips and Science
Act, and developments in Europe that
have also led to a tightening of the environment
for an open international trading system.
Let me make a few points about the
sequence of developments that I think has
shaped this environment over the last couple of
decades in the United States.
But I don’t think we’ve avoided some of the
consequences of the signi�cant recession that
took place in the global economy around that
period. And one of the consequences quite clearly
was this increase in international protectionism,
under the table, as it were to some extent, but
increasingly explicit, and embodying formal
measures that contravene the rules of the WTO
and international trade. And an important impetus
to that of course, was around the mobilisation of
the politics of populist protection in Trumpian
politics. And through that, the instigation of the
China-US trade war, in which both US and China
directly fought international trade wars, to the
cost of competitive traders like Brazil and my
own country.
And then, we’ve had on top of that, increased
activism by China, aggressiveness by China in the
imposition of trade coercion policies, for political
purposes, including prominently in Australia. So
the environment has degenerated signi�cantly
over that period, and these tensions in the
international geopolitical sphere have fed into
the trade sphere and led to the weaponisation
of trade and economic policy more broadly,
in an age of what can be called security driven
industrial policy, especially in the industrial
countries.
And broadly speaking, these are the causes of
this downward shift in gear in global trade. The
important thing to ask here, I think, is about the
consequences and costs of this development.
PETER DRYSDALE A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
40
How important is this development? Well, the
consequences is that there’s been an undermining
of the multilateral rules-based system, alongside
the long-term structural pressures on that,
because the system hasn’t encompassed fully a
whole range of new areas that are important to
the conduct of international trade and commerce.
And then with decoupling strategies,
against China in particular as well as
the policy measures taken around those
strategies, we have witnessed increasing
fragmentation of the system and a slowing of
global trade and industrial transformation in the
process potentially. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
41
I
’m here today to put together three
dif�cult words: deglobalisation, de-risking,
decarbonisation. Starting with a brief review
of the de-globalisation, I will focus on supply
chains given my assumption that we will all
reduce emissions. So I’m going to ask the question
of how we decarbonise rather than whether we
will. Therefore, supply, rather than demand, will
be more of the focus.
If we look at the world Global Value Chains (GVC)
participation, signs of de-globalisation have
become increasingly clear since 2008 and it’s
a strong trend. In this deglobalisation mode, the
country that suffers the least is China, as its GVC
participation remained relatively resilient. Europe,
the world’s most globalised region with the largest
GVC participation, was highly integrated not only
regionally, but also with the rest of the world.
World GVC Participation (%)
Source: UNCTAD-Eora database, Natixis
N.B. Results for 2016-2018 are forecasted by UNCTAD-Eora
ALICIA GARCIA HERRERO
SPEAKER 1 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
42
The change in Europe’s GVC participation was
not obvious. But the fact is, Europe is losing a
lot of its integration in the supply chains. This
might be surprising even for the Europeans. In
contrast, China is losing the least in supply chains
integration, and the reason for this is twofold.
First, China has continued to gain market share
in global exports, acquiring 15% in 2021 while only
around 1% in the 1980s. But another important
reason is that China is increasing value added.
Meaning, China is importing fewer intermediate
goods to re-export and is exporting more of its
value added for other countries to re-export. This
is happening in China mainly in the green sectors,
including solar, panels, EV batteries and wind,
where China manages to retain the value added.
Therefore, China is more shielded than the rest of
the world from the loss in globalisation, especially
regarding supply chains.
China has been dominating the battery
manufacturing over the years. For solar panels, it
is even more signi�cantly concentrated on China.
This concentrated globalisation in the supply
chain, which affects the world asymmetrically -
more in Europe followed by the US, and much
less so in China - is partly a factor behind the
trade war. It does not mean it is justi�ed, but it
did re�ect the asymmetric developments across
the world in retaining value added. To mitigate
the unbalanced development and excessive
concentration, legislators and politicians have
been rolling out policies in an effort to maintain
their place in the supply chain. It is important
for them to do so because this means jobs,
innovation, as well as other important things.
Many countries have taken actions. These
include not only the US, but also Europe with
its emphasis on corporate sustainability due
diligence, which seemingly related to human
rights but encompasses much more. With Japan
and South Korea also involved, this is apparently
a widespread issue rather than merely US-centric.
A signi�cant factor behind globalisation, especially
in the green tech sector, is technology-driven.
GVC Participation (%)
Source: UNCTAD-Eora database, Natixis
N.B. Results for 2016-2018 are forecasted by UNCTAD-Eora A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
43
This brings us to the US’s push for decoupling,
particularly in semiconductors. But the reality
extends beyond that. US approval rate for export
licenses was much higher for the world than for
China. The vast disparity there indicates not just
fragmentation, but also a clear trend towards
technological decoupling.
Moreover, the de-globalisation trend is not limited
to trade or supply chains. Global FDI �ows,
whether inward or outward, are also declining.
And the trend is even more pronounced between
the US and China, where much of the FDI was
intended to support the supply chain. Evidence
of de-globalisation can also be found in �nance.
While China does hold a signi�cant amount of
US treasuries, such investments have decelerated
rapidly in recent years.
The crux of my argument is the link between
globalisation and the primary concern in the world:
the green tech, the sector where the supply chain
is highly concentrated globally. It includes solar
panels, wind turbines (though to a lesser extent),
EV batteries, and encompasses different aspects
from extraction, re�ning, intellectual property, to
manufacturing.
In terms of extraction, China’s concentration
concerns far more than just rare earth metals.
There are other metals where the concentration
is even higher, and this does not even include
China’s ownership of mines abroad. Its dominance
in extraction just came naturally due its rich
endowment in these resources.
On re�ning, the concentration is even bigger, and
forecast for 2025 shows a dominance around
90% across the board. On Innovation, China is
also catching up quickly. Back in 2010, Europe
was still leading the scienti�c development in
most areas of the green tech, only except wind
turbines, where China already gained its place.
But moving into today, China is now dominating
all innovation fronts, including solar, wind,
batteries, heat pumps and carbon capture and
storage. For manufacturing, the concentration is
even more apparent. China captures 90% of solar
PV manufacturing, 60% of batteries, and 43% of
wind turbines. It’s a huge concentration on the
manufacturing side as well.
We are going to publish a policy note on this
at Bruegel. We think that, with the assumption
of China reaching net zero by 2060, it cannot
produce enough for its own needs. But this
does not correlate with China’s manufacturing
capacity, as it is already producing a lot. Rather,
it is because of the huge demand that outpaced
the supply. Meanwhile, we are relying on a single,
or close to single, producer for the energy
transition. This is somewhat irresponsible, from
the rest of the world’s perspective, as China also
has a huge need domestically. The tremendous
increase in demand, thus, appears risky, for what
is becoming a monopoly on the import of inputs,
such as critical raw materials, or the monopoly
power on the export side.
These are unintended risks, which can be of
various kinds, including China’s growing domestic
demand. And it is beyond the intended risk of
retaliation from China that everyone, especially
in Europe, seems to focus on. It is evident that
the way we manage the green tech supply chains A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
44
might be ef�cient, but not quite safe. Therefore,
we are proposing a decarbonisation partnership
as an alternative solution. We’re advocating this
approach, aiming to present it to the EU council
and to other global stakeholders including India.
The essence of the proposal is straightforward,
and it extends beyond the G7’s scope for the
reason that the G7 alone cannot address the
issues including the economies of scale required
to establish a new supply chain. Our proposal is
to create an additional supply chain, emphasising
coordinated specialisation, which means
leveraging the strengths of different nations. For
instance, if India offers lower production costs for
certain green tech products, it should focus on
those. Our research indicates that countries such
as India and some in Southeast Asia are highly
competitive, nearly on par with China, and they
can join certain parts of the supply chain where
they enjoy comparative advantage.
The challenge, however, lies in ensuring
technology transfer. That’s where the concept
of coordinated facilitation becomes essential. By
having access to the required technology, regions
with the capacity to produce can do so within a
coordinated framework.
But given China’s concentration and its cheap
products, the question is now about how to
incentivise countries to stop importing from
China, and instead, turn to the additional supply
chain that we are advocating? This is where cross-
border carbon pricing comes to the forefront.
Without doing so, it will never work because of
lack of incentives. Therefore, aligning incentives
is essential in this framework, in which there is
an opportunity to break the monopoly on the
inputs of critical raw materials as well as the near-
monopoly on the export of green tech.
Will China lose? In our opinion, China wins out of
this in any event, as it can at least preserve its
decarbonisation objectives.
In conclusion, we think slowbalisation is happening
in many areas, including trade, investment, and
technology. Signs of fragmentation are showing in
the supply chains and the reason why China was
shielded in this trend is related to its dominance
in the green tech sector. The current supply chain
of green tech is neither enough nor safe for the
world’s decarbonisation. An ideal one would
be multilateral, in which multiple supply chains
everywhere to mitigate concentration risks, but we
have come to realise that it is no longer feasible as
the world has seen the concentration of patents
and China’s low production costs. Therefore, policy
action is needed to address the issue. But the US’s
IRA, Europe’s Critical Raw Material Act or Net Zero
Industrial Act won’t work as they are too expensive.
That is why we proposed an alternative solution, a
partnership framework through incentive-aligned
countries and using coordinated specialisation. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
45
I
ndia has emerged as the fastest-growing
large economy, in the post-pandemic era, as
many leading economies of the world are
facing a slowdown combined with persisting
in�ationary pressures while many others are
reeling under the debt crisis. However, despite
the slowdown, China remains the prime growth
pole of the world economy, contributing 35% of
global growth in 2023, with India contributing
15%. Can India emerge as the next growth pole of
the world economy, leveraging its demographic
and geopolitical sweet spots, as China’s growth
slows down due to its transition into an ageing
society? This would be possible by sustaining an
accelerated growth momentum. Realising the
Prime Minister’s Vision 2047 for India to become a
developed economy also would require sustaining
a robust growth momentum for the next two and
a half decades. Indian economy needs to grow at
around 8% per annum for the next 25 years to realise
this aspiration from the current 6-7% per annum.
However, sustaining an accelerated growth rate
becomes challenging with the external context
turning less benign with a rather �at growth of
world trade and the rise of protectionism that
has turned globalisation into ‘slowbalisation.’ The
question that this article tries to answer is what
are the key opportunities, prospects and policy
priorities for sustaining India’s growth momentum
in a fractured trading system?
Growth Implications of the
Fractured Trading System for
India
Firstly, it needs to be recognised that globalisation
has been a mixed legacy and has had asymmetric
1
Mattoo et al (2012), Subramanian and Kessler (2014)
gains for different countries. While China
increased its share in global exports from 1.79% to
14.36% between 1990 and 2022, other regions of
the Global South had much more modest gains:
India increased its share from 0.52% to 1.81%;
Latin America and the Caribbean from 4.48% to
6.06%, while Sub-Saharan Africa was squeezed
out with its share declining from 1.99% to 1.78%
over the same period (Figure 1). China was able
to exploit the opportunities presented by hyper-
globalisation and capture a greater share of rapidly
expanding global trade at the cost of others by
quickly enhancing its manufacturing capacity.
The huge expansion of China’s manufacturing
capacity was a result of heavy strategic
interventions. As documented extensively in the
literature, the Chinese manufacturing prowess
was underpinned by undervalued exchange rates,
direct subsidies, local content regulations, among
other strategic interventions.
1
Furthermore, China
has been sustaining growing trade and current
account surpluses over the years, sucking the
global demand did not help other countries
expand exports of manufactured goods to its
large and growing market. In contrast, India has
been sustaining growing merchandise trade
de�cits over the years, providing markets to other
countries. Hence, the rise of India can be seen as
a global public good. In that context, the ongoing
decoupling and restructuring of the supply chains
of global corporations on China+1 basis, presents
an opportunity for India and other countries in the
Global South to expand their global footprints.
Even though India hasn’t integrated deeply with
global value chains or bene�ted signi�cantly
NAGESH KUMAR
SPEAKER 2 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
46
Source: ISID calculations based on World Development Indicators, World Bank, https://data.
worldbank.org-45
-40
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
35
40
45
50
55
60
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
FDI Inflows growth rates, World Merchandise: Total trade growth rates, World
Fitted values (FDI Inflows growth rates) 2003-2008
Fitted values (FDI Inflows growth rates) 2009-2022
Fitted values (Trade growth rates) 2003-2008
Fitted values (Trade growth rates) 2009-2022
Global FDI Inflows and Global Merchandise: Total Trade, Growth Rates, 2001-2022
%
Source: ISID based on UNCTAD STAT and World Investment Report, 2023, https://unctadstat.uncta.
org/data, https://unctad.org/system/�les/of�cial-document/wir2023_en.pdf
`0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
1980 1985 1990 1995 2000 2005 2010 2015 2020
Year
Brazil Mexico China IndiaSub-Saharan Africa South Africa
Share of global merchandise exports, 1980-2022
%
Figure 1: Share of Global Merchandise Exports, India, China and Selected
Developing Countries and Region, 1980-2022
Figure 2: Global FDI In�ows and Global Merchandise: Total Trade,
Growth Rates, 2001-2022 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
47
from globalisation, slowbalisation is bad news for
India’s economic growth. The slowdown of global
trade and investments (as summarised in Figure
2 and Table 1) since the Global Financial Crisis of
2008/09 is very dramatic and sharp with average
annual growth rates of world trade coming down
from 16.41% in the pre-GFC period to 4% in post-
GFC period and of FDI �ows from nearly 20%
to 2.2% respectively. Given the co-movement of
India’s growth rate and world trade observed in
Figure 3, India’s growth rate is affected by the
slowdown. India may be losing an estimated one
percentage point of economic growth due to
slowbalisation. This has implications for policy
which should �nd a way to mitigate the loss of
demand in international markets by some kind
of augmentation in domestic aggregate demand
and through job-creating industrialisation. The
latter is summarised in the following section.
2003-2008 2009-2022
Global FDI In�ows 19.65 2.22
Global Merchandise:
Total Trade
16.40 4.00
Source: ISID based
on UNCTAD STAT
and World Investment
Report, 2023, https://
unctadstat.unctad.org/
data, https://unctad.
org/system/�les/
of�cial-document/
wir2023_en.pdf
Accelerating India’s
Growth Momentum
through Manufacturing-led
Transformation
The realisation of Vision 2047 of developed
country status and a $5 trillion economy by
2026/7 needs to be underpinned by inclusive and
sustainable prosperity for all citizens through the
creation of decent job opportunities for India’s
youthful workforce. The inability to create an
adequate number of decent jobs in the past has
led to nearly 86% of India’s workforce getting
locked in the informal sector without adequate
social protection and remaining vulnerable to any
shocks. The issue of decent job creation is linked
with structural transformation associated with
economist Arthur Lewis, where workers move
over time from low-productivity activities (such as
agriculture) to higher-productivity sectors (such
as industry and services). India has witnessed
the transformation of an agricultural-dominated
economy into a services-dominated one bypassing
the industry stage. While the service sector has
delivered robust growth rates, it has not been able
to absorb workers especially the unskilled and
semi-skilled ones, in a proportionate manner. As
a result, agriculture continues to sustain as much
as 46% of India’s workforce with barely a 15%
share of GDP (Figure 4). This services-oriented
structural transformation, as it has been termed,
has been able to absorb only 26% of the workforce
Source: ISID based on UNCTAD STAT and World Development Indicators.-20
-15
-10
-5
0
5
10
15
20
25
30
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Year
Merchandise: Total trade growth rates, World Real GDP growth, India
%
Figure 3: Growth Rates of World Merchandise Trade and India’s GDP, 1980-2022 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
48
in services. The manufacturing sector has been
bypassed with its share in GDP stagnating at
around 16-17% in contrast to an average of 30% in
the East Asian countries. Not only has the share
of manufacturing stagnated in India, but there is
also evidence of some deindustrialisation taking
place (see Amirapu and Subramanian 2015; Rodrik
2015; Kumar 2018). The neglect of manufacturing
to underpin the structural transformation in India
has cost the country dearly in terms of creating
decent jobs. The manufacturing sector has the
highest backward and forward linkages compared
to any other productive sector (Figure 5). Hence,
it generates more jobs indirectly for every direct
job created.
It is for this reason development states across the 30.6%
17.7%
15.1%
41.1%
32.9%
12.7%
26.0%
0
5
10
15
20
25
30
35
40
45
50
55
60
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023
Agriculture & AlliedIndustry Manufacturing Services
GDP shares
%
54.2%
(PE)
Notes: 1981: FY1980-1981. 2022-23: Provisional Estimates (PE).
Source: ISID calculations based on National Accounts Statistics.
Source: ISID computations based on India’s Input-Output Tables
Figure 4. GDP Share, by Sector, India, 1981-2023
Figure 5: Backward and Forward Linkages Generated by Economic Sectors in Indian Economy A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
49
world promote the manufacturing sector. History
corroborates that few countries if at all have attained
prosperity without industrialisation (Kaldor 1967).
Kaldor has also argued persuasively that the
growth of manufacturing not only drives economic
growth but also enhances the productivity of the
economy overall with increasing returns to scale
which could be dynamic in nature. The Agenda
2030 on Sustainable Development adopted at
the United Nations Summit in September 2015
comprising 17 Sustainable Development Goals
also recognises the transformative potential of
the industrial sector and seeks to enhance its
share in employment and GDP (SDG-9.2). By
substituting imports or expanding exports, an
expanded manufacturing sector could also help
to make India’s balance of payments (BoP) more
sustainable --which tends to periodically get into
stress.
Therefore, faster job-creating rapid economic
growth through manufacturing-oriented
structural transformation, complementing the
robust growth of the services sector, is the
key to inclusive and sustainable prosperity of
India for the realisation of its Vision 2047 of a
developed country. In that context, the Make-in-
India programme announced by Prime Minister
Modi in 2014 which seeks to tap the potential
of manufacturing for India’s development,
was timely. It was further reinforced by
Atmanirbhar Bharat Abhiyan in 2020 as
a strategy to pull the economy out of the Covid-19
pandemic comprising a production-linked
incentives (PLI) scheme to boost local production
in 14 sectors.
The ‘New Washington
Consensus’ on Industrial Policy
In achieving a manufacturing-led economic
transformation, India could learn from the
experiences of the industrialised and East Asian
countries in fostering competitive manufacturing
capacities through extensive state interventions.
The developmental role of the State in
these countries and the aspects of strategic
interventions deployed that are collectively called
industrial policy have been well documented in
the literature (see Nayyar 2019; Kumar 2022b,
for a review). After becoming a bad word in the
heydays of globalisation, industrial policy is back
in fashion across the world. Among many trends
that the slowbalisation and the Covid-pandemic
have accentuated is a shift towards a real economy
comprising production, jobs, and localisation
replacing the earlier emphasis on �nance,
consumerism, and globalisation. Rodrik (2022)
has termed this trend ‘Productivism Paradigm.’
Governments around the world are adopting
the so-called industrial policies that incentivise
domestic manufacturing to create jobs and
reshoring of value chains. The New Washington
Consensus is not about liberalisation and free
markets. It is about industrial policy. A widely
circulated IMF paper
2
The Return of the Policy
that shall not be named: Principles of Industrial
Policy, issued in 2019, recognised the ‘strong
commonalities in policies pursued by the Asian
Miracles, and one cannot ignore the preeminent
role of industrial policy in their development.’ Over
the past few years, there has been a deluge of
evidence and debates on the relevance of industrial
policy tools employed with varying degrees of
success by traditional and late industrialisers
(The Economist 2022). An extensive new review
of evidence and experiences has concluded that
‘there is a generic and powerful economic case for
industrial policy and that the usual critiques rely
on practical rather principled objections’ and that
the debate on industrial policy should be focused
not on ‘the whether’ but on ‘the how’ (Juhasz,
Lane and Rodrik 2023).
The aggressive manner of adoption in recent
times of industrial policy by some of the most
advanced economies, is a case in point. For
instance, in the US, once the greatest champion
of free markets and globalisation, the Biden
Administration has de�ned its industrial policy
recently with the $280 billion CHIPS and Science
Act, the $737 billion In�ation Reduction Act,
and the $550 billion Infrastructure Investment
and Jobs Act. These Acts will foster local
manufacturing and innovation of semiconductors
chips, electric mobility, and other new technology
products through hundreds of billions
of dollars in subsidies and tax breaks. The
European Union has followed suit with its own
set of incentives and support for local producers.
The new ‘Green Deal industrial plan for the net-
zero age’ of February 1, 2023, sets out a European
approach to boost the EU’s net-zero industry,
through measures to improve the competitiveness
of the EU’s net-zero industry including the ‘net-
zero industry act’ of 16 March 2023, which
aims to simplify the regulatory framework for
production of key technologies, set targets for
EU industrial capacity in 2030. One major outcome A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
50
Source: World Economic Forum, https://www.weforum.org/agenda/2020/02/ageing-global-population
of the EU’s climate-focused industrial policy
includes the European Battery Alliance, a network
to coordinate research and subsidise battery
manufacturing across the continent (Siripurapu
and Berman 2022). EU is also looking to increase
its share of the global semiconductor market and
lead the way in quantum computing. Furthermore,
the EU in December 2022 decided to impose
a Carbon Border Adjustment Mechanism
(CBAM), which will initially apply to imports of
certain goods and selected precursors whose
production is carbon intensive such as cement,
iron, steel, aluminium, fertilizers, electricity,
and hydrogen. EU importers must pay for
emissions by buying CBAM certi�cates. The
policy is set to take effect in 2026, with a
transitional phase starting October 1, 2023.
The policy is widely seen as unilateral,
protectionist and discriminatory adopted to
safeguard domestic businesses (Ellie 2023).
India’s Sweet Spots for
Manufacturing
Disruptions in supply chains such as those
following the COVID-19 pandemic and the Ukraine
War have pushed global corporations to gradually
de-risk their supply chains by diversifying them
on China+1 basis. The restructured production
is being directed it to friendly countries, termed
friend-shoring. The IR4.0 is also a possible driving
factor. In the past, global value chains (GVCs) were
outsourced to developing countries to leverage
labour cost differences among other locational
factors (Kumar 2002). Robotisation of production
driven by IR4.0 tends to neutralise the labour cost
advantage enjoyed by developing countries. The
reshoring of global value chains is, therefore, a real
possibility and can affect the export prospects of
developing countries (Kumar 2023a).
One could argue that India’s recent manufacturing
push through various industrial policy instruments
is a part of the global trend of governments
incentivising domestic manufacturing to create
jobs and re-shore value chains. India will be
helped by its position as a “geopolitical sweet
spot,” having friendly relations with key industrial
countries in the West and East. This will allow India
to bene�t from global companies’ friend-shoring
supply chains to diversify them away from China.
India is also enjoying a “demographic sweet
spot” with a relatively young population. The
proportion of the working-age population in India
will peak at 68.9% around 2030 and will stay
2
Cherif and Hasanov (2019)
Figure 6: Changing proportions of Working Age Population, 2020-2060 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
51
favourable for a few decades. This is in contrast to
rapidly ageing populations in most industrialised
countries such as Japan and European countries
as well as newly industrialised countries such as
the Republic of Korea and China (Figure 6). The
youthful population also makes it possible for
the country to train them in emerging disciplines
such as machine learning among other AItools to
harness the emerging IR4.0 technologies for its
development besides catering to the global skills
requirements, becoming the talent capital for the
world (see Kumar 2023a).
Opportunities for
Manufacturing - led
Transformation
As India strives to build competitive manufacturing
capabilities, an important question would be:
What opportunities are available to India in terms
of feeding the domestic demand versus external
markets and emerging opportunities? Given
below are a few pointers for these opportunities.
1. Making for India
The biggest opportunity for expanding the
country’s manufacturing base is by producing
for domestic consumption. One should start
by reversing the trend of the rising share of
imports in �nal consumption, as Indian companies
outsourced production offshore to save costs in
the decade following 2004 with an appreciation
of the rupee.
3
Outsourcing has been practised
widely by several well-known Indian companies
by getting their products manufactured in other
countries, mainly China, and then continuing to
sell them under their brand names. Outsourcing of
production was practised even for several price-
sensitive home electrical and electronic appliances
(electric fans, toasters, mixer-grinders, juicers, wall
clocks, TVs, refrigerators, air-conditioners, etc.)
that used to be manufactured in the country for
many decades. Reversing this trend of hollowing-
out of the Indian industry is the �rst step towards
industrialisation.
Then there are other industries with signi�cant
import dependence such as power equipment,
electronics, a variety of organic and inorganic
chemicals and active pharmaceutical ingredients
(APIs), that can be manufactured within the
country as adequate domestic demand exists. The
PLI schemes announced by the Government as a
part of the AatmaNirbhar Bharat package in 2020
are trying to incentivise domestic production of
some of these products. Considering that India’s
manufactured imports add up to $370 billion per
annum (out of the total imports of around $750
billion in 2022–23), the substitution of even 50%
of the manufactured imports in a gradual manner
could enhance the current scale of manufacturing
value-added of roughly around $550 billion per
annum by 33%. Therefore, there is considerable
potential for strategic import substitution.
Growing demand for consumer and capital
goods and defence equipment would continue
to provide additional opportunities for the local
manufacturing base with scale economies. The
competitive manufacturing plants exploiting scale
economies would also be able to tap opportunities
that may arise in the international markets.
2. Making for the World or Export-Oriented
Manufacturing
Notwithstanding the slowbalisation and rising
protectionist trends, India is likely to bene�t
from the strategy of global corporations to de-
risk their supply chains by diversifying them
on a China+1 basis. This reshoring is likely to
help India get integrated with the global and
regional value chains. Furthermore, strengthening
India’s presence in traditional areas such as
textiles and clothing, leather goods, gems and
jewellery, processed foods, vaccines and generic
pharmaceuticals, automobiles and components,
re�ned petroleum products, steel and non-ferrous
metals, and some types of machinery and electrical
equipment is vital, besides making inroads in new
areas and markets. Given India’s rather marginal
1.7% share of global merchandise exports, even a
very small rise of 0.5% in this share over the next
2–3 years will add $100 billion to India’s exports
and possibly $150 billion to Manufacturing Value
Added (MVA).
3. Sunrise Industries: Electronics &
Semiconductors
The digital revolution also provides fruitful
opportunities for fostering manufacturing in
India. India can leverage its unique strengths
such as its pool of technical manpower, software
and chip design capability, and large domestic
market to exploit these opportunities. Annual
imports of electronics are of the order of $80
billion and are growing rapidly with projections
of $400 billion of imports by 2025. Emergence
3
Kumar (2018) for evidence A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
52
of India as the net exporter of mobile handsets
since 2022 is an important development with
Apple and Samsung assembling their mobile
handsets in India in an increasing manner.
However, the value addition of the handsets
assembled in the country needs to be enhanced.
In that context, Chinese vendors of Apple were
allowed to establish joint ventures to produce
components. The recent government initiatives
to develop design, manufacture and export
semiconductor chips including through $10 billion
Semiconductor Mission to foster manufacture
of semiconductor chips and displays leveraging
India’s leadership in software development
and chip design. This has led to some credible
investment proposals for semiconductor
chips and displays, which, if successful, could
transform the whole electronics ecosystem while
reducing import dependence. The manufacture
of semiconductors in the country will help to
catalyse the electronics ecosystem comprising a
whole range of downstream products.
4. Sunrise Industries: Green Industrialisation
A whole new range of green industries primarily
driven by India’s ambitious targets of clean energy
transition have come into existence. The target of
deriving 50% of energy from renewable sources by
2030 is promoting the manufacture of green and
blue hydrogen, solar panels, and wind turbines.
Government is also promoting electric mobility
and energy ef�ciency which is leading to rising
emphasis on production of electric vehicles (EVs)
and two wheelers. Electric mobility is creating a
rising demand for Lithium-Ion batteries and other
storage solutions. All of these sectors offer very
promising industrialisation avenues while also
advancing the sustainability agenda. India should
aim to become a global hub of compact EVs
(including two and three-wheelers) and batteries.
The Government has also announced a $2.3
billion Green Hydrogen Mission with objective to
make India a leading manufacturer and exporter
of green hydrogen. These new green industries
will not only help to create jobs and incomes but
also advance India’s Net Zero target.
To sum up, translating these opportunities for
strategic import substitution, export promotion
and digital and green industrialisation has the
potential to lift India’s Manufacturing Value Added
(MVA) from the current $550 billion to $1 trillion
by 2026/7, thus advancing the government’s
$5 trillion economy target and creating millions
of decent jobs in the process. Manufacturing
Value Added could reach $7.5 trillion out of the
projected GDP of $30 trillion in 2047.
Concluding Remarks
The foregoing analysis has shown that a
manufacturing-led transformation is imperative
for India to realise its development aspirations of
building a developed economy by 2047 and to
address the challenge of employment creation
and sustainable management of balance of
payments. Industrial policy and emphasis on the
real economy is a global trend in the context
of slowbalisation, rising protectionism and
fractured trading system. As global companies
restructure their supply chains on China+1 lines,
India can potentially leverage its geopolitical and
demographic sweet spots to build manufacturing
capacities to feed growing domestic and global
demand and tap the opportunities presented by
the digital and green industrial revolutions. To
tap these opportunities, a strategic approach is
needed to harness the potential of manufacturing,
for which many useful lessons are available from
the experiences of East Asian countries. In that
context, India should build on PLI to a more
proactive targeting approach to investment
promotion that would help to attract better quality
investments meeting its development needs. The
manufacturing-led transformation would also A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
53
need to be supported by a specialised term-
lending institution, by competitive management
of exchange rates, ef�cient physical infrastructure
and logistics facilities. A �t-for-purpose
educational and skill development system can not
only feed the domestic requirements of skilled
manpower but also has the potential to make the
country a talent hub for the world in the context
of ageing societies and the rise of Industry 4.0.
The innovative activity of Indian enterprises has
to rise sharply to enhance their competitiveness
in international and domestic markets. MSMEs
need to be integrated with the value chains
of organised retail through performance
requirements. Some augmentation of aggregate
demand through conditional income transfers
to the bottom 30% of the population could also
help in addressing the rising income inequalities
in the country. India also needs to make the
regional and global trade rules supportive of its
ambitious manufacturing-led transformation.
Finally, to be effective, the different elements of
industrial policy as outlined above need to be
pursued in a coordinated manner. This would
require a high-powered institutional architecture
for a coordinated implementation of industrial
policy.
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55
W
hat I will try to do is basically to
illustrate something that Professor
Peter has so aptly spoken. Namely,
if we want to understand the
growth implications, particularly
costs of moving towards a fractured trading
system, we must use as a benchmark exactly
what happened over the period which is usually
called as hyper-globalisation or globalisation 2.0.
So, what I’ll try to highlight is exactly what aspects
were those, so as to use them as a benchmark to
think about the costs of a fragmentation of the
trading system. What was hyper-globalisation
or, like Professor Richard Baldwin calls it,
Globalisation 2.0? In the eighties and nineties,
particularly the nineties, we saw the manifestation
of the outcome of what one may call a tectonic
plate shift under the global economy. This was
the combination of three things:
First, a cluster of technological innovations
not only in information and communication
technology but also in transportation. The
containerisation allowed the fragmentation of
manufacturing processes to levels previously
unthinkable.
Second, the reasonably widespread adoption of
trade opening policies. Literally, in most countries
in the world, particularly developing countries,
there was a move towards reducing tariffs and
non-tariff barriers to trade.
OTAVIANO CANUTO
SPEAKER 3
Source: Aiyar, S. et al (2023), Geoeconomic fragmentation and the future of multiateralism, IMF Staff
Discussion Notes SDN/2023/001
Chart 1- Growth of GDP and trade, 1995-2014
Average annual change in real GDP per capita vs. average annual change in exports as % of GDP A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
56
Third, the incorporation, almost overnight, of 1
billion workers with lower wage aspirations into
the global supply of labour available for market
economies. I’m referring here not only to the
downfall of the Berlin Wall but also to President
Deng Xiaoping’s creation of special economic
zones that allowed for a tremendous rise in
exports and imports as a share of China’s GDP.
The results? Well, there was substantial growth
of GDP per capita in emerging markets and
developing economies. The correlation between
trade insertion in exports and increases in
GDP per capita can be seen in chart 1. And, as
Professor Peter mentioned, there was a change
in the composition of the global economy and
trade, with the rising weights of not only China
but also other emerging markets and developing
economies.
This resulted in a signi�cant reduction in poverty
rates. At the same time, there was a double
movement with respect to inequality. The world
became less unequal when it came to per
capita income, but there was a simultaneous
rise in within-country inequality, particularly in
advanced economies, as depicted in Chart 2.
These were direct results of trade integration.
Along with higher foreign trade came the
transfer and local absorption of knowledge and
technology in machines, equipment, and also
Source: World Bank (2016). Poverty and shared prosperity 2016: taking on inequality
Source: IMF. World Economic Outlook, April 2018
Chart 2 - Global inequality, 1988-2013
Chart 3 - Contribution of Foreign Knowledge to Labour Productivity Growth Annual percent
growth, cross-country averages A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
57
Source: Aiyar, S. et al (2023), Geoeconomic fragmentation and the future of multiateralism, IMF Staff
Discussion Notes SDN/2023/001
Chart 4 - Global �ows of goods, services and �nance
(US $ trillion, unless indicated otherwise) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
58
intangible forms, accompanying the formation of
global value chains. This is evident, for instance,
in estimates made by the IMF on how foreign
knowledge contributed to labour productivity
growth among advanced economies and also
in emerging market economies. As shown in
Chart 3, the IMF estimates that from 2004 to
2014, foreign knowledge accounted for about 0.7
percentage point of labour productivity growth a
year, what corresponded to 40% of the sectoral
productivity growth. This is substantial after a
decade in which that contribution reached 0.4
percentage point a year.
And before anyone thinks these results are only
due to China, they are robust even when one
excludes China from the analysis. China is, of
course, a unique case because of its size and
growth rates. But the fact of the matter is that
this is an observation that can be generalised
about the transfer of knowledge.
Of course, this contribution of foreign knowledge
translates itself into higher results when
accompanied by domestic endeavours. As our
colleagues at the World Bank have highlighted
in many studies, there is a component of
technological capabilities that is idiosyncratic
and local. Capabilities must be present in order
to utilise foreign knowledge effectively. This has
been the case for countries like South Korea and
China, as evidenced by their patent �lings and
R&D expenditure.
Okay, so then we delve into the phase of
slowbalisation. Looking in a bit more detail,
we note in Chart 4 that the cross-border �ows
of goods, services, and capital slowed after
the global �nancial crisis. There are several
hypotheses about this. One of them is the
possibility that the major wave of fragmentation
associated with manufacturing had reached
a plateau. For it to continue as a driving force,
we would need to see what happened in China
replicated in other countries. This started to
happen slightly with countries like Vietnam. India
remains the signi�cant absentee in this process.
Another hypothesis is that advanced countries
transitioned more towards service-based
economies. Services are less trade-intensive,
and the internationalisation of services hasn’t
occurred to the same degree as we’ve seen with
manufacturing.
It is important to highlight, as I said, that the
average industrialised country saw an increase
in the Gini Index from 30 to 33 in the 20
years between 1988 and 2008. Now, to avoid
any misunderstanding, it must be clear that
globalisation cannot be held mostly responsible
for the rise in economic inequality in advanced
economies.
As it was well remarked in our previous session,
technological change had more to do with that.
Technological change, combined with a lack of
appropriate social protection systems in some
advanced economies, is to blame for most of
worsening of job and income conditions at the
bottom of pyramids in countries like the U.S. or
the United Kingdom. Globalisation cannot be
scapegoated despite the claims blaming imports
of goods from Mexico and China as responsible
Source: Aiyar, S. et al (2023), Geoeconomic fragmentation and the future of multiateralism,
IMF Staff Discussion Notes SDN/2023/001
Chart 5 - Long-term losses from global trade fragmentation (percent of GDP) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
59
for doldrums faced by low- and middle-income
workers in the U.S., or blaming labour immigration
as a motivation for the Brexit decision. The fact
of the matter is that globalisation cannot be held
responsible for that.
Then the global economy went through the recent
multiple shocks, the perfect-storm combination
of a pandemic, war in Ukraine, manifestations of
climate change, the emergence of the so-called
“new Washington consensus”, and the ongoing
technological rivalry.
Let me touch on the impacts of those shocks.
The permanent impacts of the pandemic will be
limited. The pandemic introduced a trade-off
between resilience and ef�ciency. But the fact of
the matter is that this doesn’t lead to reshoring.
As the milk-formula experience last year in the
United States showed clearly, if you bring back
everything, then you’ll remain as exposed to
potential risks as if you were when relying on
global supply chains, given the possibility of
shocks at home. On the other hand, depending
on the sector, this logic will lead maybe to some
costly diversi�cation or duplication of links
depending on the sectors, but not a reversal of
globalisation. As some colleagues and I have
shown in a policy brief for the T20 this year, the
recovery of manufacturing output, particularly
in technology sectors, was really nothing
commensurate with the stigma established with
the pandemic.
Now, where the danger lies is in the rise of national
security commanding economic policies, as it
has been singled out as a justi�cation for trade
restrictions in those sectors where “dual use” of
technologies and goods and services for both
civil and military reasons is possible. Indeed, if
one looks at trade and FDI restrictions, the rise
has been unequivocal, often justi�ed based on
national security reasons.
The transmission channels of the fragmentation
will be a reversal of the path along which we have
attained the gains that we approached before.
As we are at the beginning of this process, any
estimate of the costs is based on simulations on
different models. For illustration, Chart 5 displays
results of some studies presented in a recent
seminar at the IMF on several models coping with
different aspects of the process of trade fracturing.
One can generalise the following from those
studies:
1. The costs are greater the deeper the
fragmentation.
2. Reduced knowledge diffusion due to
technological decoupling is a powerful
negative ampli�er of the trade channel.
3. Emerging markets and low-income
countries are most at risk from trade and
technology fragmentation.
4. Transition costs can be considerable,
in some cases even exceeding the �nal
trading impact.
5. The estimates provided are not the upper
bound.
6. To �nalise, the G20 might not address
issues of national security directly, but
there’s much they can do, especially
regarding the trade-offs between resilience
and ef�ciency, designing policies to avoid
resorting to the least discretionary breadth. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
60
I
would like to make a statement �rstly, as a
bureaucrat. And it’s only about myself as a
bureaucrat. I’m humble enough to believe that I
can’t pick winners. If I could have picked winners,
I would’ve been a businessman myself, and there
are enough people in government who think like
me. So, I think that answers a lot of questions.
You have to realise it’s largely for two objectives.
Firstly, there were huge internal disadvantages
within India and it was largely to overcome bad
logistics, bad electricity, supplies, etc. The second
one was to promote production in areas of strategic
importance.
Having said that, there were three areas I could have
spoken on. I could have spoken on supply chains,
India and India’s stance on the trade of the WTO.
But since the least amount of discussion has been
on the WTO, let me say a couple of things. The
topic was the fractured trading system. And we
have heard in the last hour or so about the risk of
fragmentation, protectionism rising, nearshoring,
French shoring, populism on the rise etc. The
fundamental question is why is all this happening?
There are multiple reasons.
One, I think the WTO has not delivered, and it has
not delivered for a very long time. After the round,
what else has it delivered in terms of substantive
liberalisation, maybe the IT agreement, of which
India has bene�ted a lot. There is a lot of impatience
in the world with respect to the WTO and developed
countries, there are no more tariffs to bring to the
table to extract concessions. So, there is also a
loss of patience there. There is no movement on
agriculture. I think the developing countries are also
quite fed up with that. And the services agreement
is too complex to negotiate. I mean, you have to
negotiate with 160 countries or 80 countries in
parallel. It’s just not a workable system.
And that is why there is a gradual increase in behind
the border issues, and the WTO system has been
jammed in terms of being unable to tackle the
labour environment and a whole host of things. And
then also these supply chain issues, concentration
that has also led to fragmentation.
We have heard about geopolitics, but then I would
like to take you to some trends that are happening,
which are going to overwhelm. These are important
to understand why the system will adjust whether
we like it or not. At the end of the day, systems are
not permanent. They respond to situations and if
the existing ones don’t work, we have to come up
with new ones just like the G20 has become a more
important forum.
It was a Finance Ministers’ association, and then
it became a Heads of Government forum. It is
addressing issues of which �nance is just a small
part. The trends are on the trade front, the rapid
growth in services, it is so fast. In India’s context, it
is going ahead of manufacturing very soon in terms
of trade in services. And the second is the mixing
of our services with goods in any exported goods
product. Today, 30% to 50% of the value is in its
services. So actually, that is a megatrend, which we
all have to recognise. The second is demographics.
Demographics are going to lead to shortages
around the world of labour. I think that needs to be
looked at.
And the other realisation, and I’m saying this applies
across the world, that behind the border issues are
no longer treated as such. They are actually trade
issues. And I think, for countries like India, which
used to take a position that these are behind the
BVR SUBRAHMANYAM
EXPERT COMMENT A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
61
border issues, we will not touch them, are not taking
this stance anymore. We have changed our position
because it is a gradual realisation that we need to
evolve with the rest of the world. And so, India today,
when we are negotiating an FTA with the EU, UK
and others, we are discussing environment, labour,
gender transparency, anti-corruption and what not.
Ten years ago, �ve years ago, India would have been
a solid opponent of all of these at the WTO.
One of the �rst things I had to do as Commerce
Secretary was to remove all the old WTO staff in
the ministry and change them because you have
got people stuck in old positions and they have
made their life actually selling those positions. You
need new people to do that. The last is an important
megatrend i.e., the massive �ow of intellectual
property across borders, the massive �ow of
technologies across borders, the massive �ow of
students across borders. I mean, this is going two
to three times faster than the growth of trade. Now,
all these things also countries need to regulate.
They need to talk and they are talking bilaterally in
agreements, in communiques.
As I see it, the multilateral system is not delivering.
Very deep, either bilateral or regional trading
agreements, will go into a whole host of issues
the WTO currently is unable to deliver on. That
does not mean that the WTO will not deliver.
What will happen, particularly for developed
countries which either do not have the capacity
to negotiate in these areas, or which actually do
not have past experience in negotiating in these
areas, is that they will actually test the waters
bilaterally or regionally. Then the same issues will
arise multilaterally.
For the �rst time after 20 years, the WTO entered
into an agreement on �sheries. It can add 20
years down the road, an agreement on labour, an
agreement on the environment, an agreement in
many other areas, which are inevitable. I am actually
willing to put my money on it. It is going to happen
because after you assign these things bilaterally,
plurilaterally with a smaller group of countries, how
can you resist the argument at a multilateral level?
Only thing is everybody has to get on board.
WTO has a peculiar structure because of which it
becomes dif�cult to get things into it, but I think it
is not far away. After all, what are regional trading
agreements? Mega regional trading agreements?
Just that they are not implemented at the WTO and
they are not part of it, but they are in a way de-facto
pluri-lateral agreements. Without having the WTO’s A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
62
dispute settlement mechanism in the agreements,
they have a separate dispute settlement mechanism.
So, I think the system is moving, it is evolving, and
I see that India’s moves in the last two years have
been in that direction. India negotiating with the
EU, with the UK and all others is actually a stepping
stone. India will have to create a role at the WTO.
Actually, what has happened, I mean, with respect
to India changing its stance, it cannot stand in
splendid isolation. It is the only major economy. It
is not part of any signi�cant regional grid. And it
is also losing out because of this, all the inherent
advantages it has to export.
And I think that is something which is gradually
been realised and my own personal feeling without
having data is that not being integrated with large
parts of the world economy in many areas is going
to hurt India, also in greening itself. And I think that
is very, very essential.
The other point which I heard is, this question
about, how do you separate out what is being
done for political reasons? What is being done for
other reasons? As a bureaucrat you have to take
sociopolitical systems as given, and there is no point
in trying to avoid them.
The best deals are those which actually manage to
sell things to the socio-political system. It may not
be economically the most perfect answer, but if you
pay the economic, the political and the social cost,
you can get the deal through. I think an 80% or 50%
deal is better than no deal.
And it works. I think this is the way forward. In
the Indian context, the country has changed its
stance, but countries do change their stance. It is
like steering an aircraft carrier, you know, it takes a
very long time to turn, but when it turns, it turns and
then it sticks to it. So, I am very hopeful. And, for all
this fragmentation etc., which you see, I anticipate
the global system evolving to accommodate it. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
63 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
64
N. K. SINGH
Chairman, Finance Commission
and President, Institute of
Economic Growth,
New Delhi (India)
TAO ZHANG
Chief Representative for
Asia and the Paci�c, Bank of
International Settlements (BIS)
Hong Kong (China)
HANAN MORSY
Deputy Executive Secretary and
Chief Economist, United Nations
Economics Commission for
Africa (Ethiopia)
MANJEEV SINGH PURI
Former Ambassador of India to
the EU, Distinguished Fellow, The
Energy and Resources Institute,
New Delhi (India)
POONAM GUPTA
Director General, National
Council of Applied Economic
Research (NCAER),
New Delhi (India)
SESSION 4
RESHAPING GLOBAL FINANCE
FOR SUSTAINABLE GROWTH
July 28-29, 2023
Hotel ITC Maurya, New Delhi, India A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
65
SESSION CHAIR
T
he theme today for this session
is reshaping global �nance for
sustainable growth. To some extent,
there is a degree of ambiguity in
the formulation of the broad theme
of this question. Of course, the reform of the
global �nancial architecture is an issue with
which, in some ways, as you said, I’m grappling
with currently. It’s not an easy grapple. The
global �nancial architecture is cluttered with
all kinds of other non-economic issues, which
have come in display. Broadly, I will say that the
global �nancial architecture is dysfunctional
and requires a basic, not rejuvenation, but a
fundamental restructuring to meet the needs of
adequate �nance for an orderly transition to a
green economy.
Sheer politics and other kinds of considerations
have begun to play an important role in de�ecting
us away. There is clearly an inadequacy of
�nance. The kind of �nancial requirement is
anybody’s guess, I mean, I was audacious enough
to pick on an old �gure that, from the sort of
�gures currently in use in the United Nations in
the OECD, in the IMF and the World Bank, they
believe that you roughly require about $3 trillion
a year between now and 2030. If you ask me
whether it could be 2.8, I will say could be, if
you ask me, could it be 3.2, I’ll say could be, and
I have no better answer to give, except that it
has to be signi�cantly, enormously higher than
the current capital and the current investments
which are going in.
So having gone into the requirement of that
kind, how is this requirement going to be in
some way met is the principal issue now. The
assumptions which are being made is that
two out of this three trillion should come from
domestic resource mobilisation. That’s easier
said than done. In fact, Christina, the managing
director of the IMF, told me just last week that
you know, “NK, everybody’s talking about your
$1 trillion. Nobody’s talking about that $2 trillion.”
I said, “Well, Christina, better you talk about
that $2 trillion.” Because the IMF is in some
ways positioned to do that given that they are
looking at revenue, revenue buoyancy, tax-GDP
ratio and the kinds of domestic reforms needed
for economies to be able to garner that kind of
capital.
So that leaves $1 trillion. Where do I get $1 trillion
from? $500 billion should come from private
capital. Is it possible? I don’t know. What will
make it possible is the issue with which we are
dealing with, and then the balance, $500 billion,
a mix of concessional and non-concessional
capital.
I did not realise that there was a separate MDB
for Black Sea development until it was brought
to my notice. There is a whole family of MDBs,
and of course the World Bank Group, which is
the IBRD and the IDA, and others (International
Finance Corporation, MIGA, Global Environment
Facility), all added together their annual lending
as of 2019 was between $110 billion to about
$120 billion.
The challenge is how do I triple that $110-120
billion, and then you add private capital to get
to $1 trillion. Then in some form, that’s one way
of addressing the compelling needs of what you
N. K. SINGH A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
66
call global reshaping. Global �nance means most
importantly availability of the adequacy of �nance
to address the needs of sustainable growth.
By the way, let me add that Africa is one of the
very dominant and important areas of focus as I
grapple with the problem. It is generally known
but not many seem to address it, is that it is one
continent where in many parts extreme poverty
has gone up, shared prosperity has gone down.
I must say in a lighter vein, it was told to me
very often, “Look here, don’t tell us about all this
green and non-green. Before we begin to make
choices on energy and exercise energy options,
we do not have any energy.” So, these choices
only become meaningful when you at least
address the basic energy availability. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
67
HANAN MORSY
SPEAKER 1
A
frica has had a developmental
progression in terms of all the
achievements that have been made
on SDGs due to the tsunami of global
shocks. While we discuss climate
action and the necessary steps, at the same
time, Africa has three-quarters of its population
without access to electricity.
Let me give some background. Part of the work I
do involves heading the secretariat for the Africa
High-Level Working Group on Global Financial
Architecture. This group is composed of African
ministers of �nance, economic development, and
planning, along with the IMF, World Bank, African
Union, African Development Bank, and African
Bank. The group’s aim is to build consensus
on the African position regarding the reforms
required for the global �nancial architecture. This
group was formed at the beginning of last year,
2022, and has been meeting regularly to develop
these asks.
One of the key components discussed relates to
the IMF’s special drawing rights (SDRs) and its role
in the global �nancial safety net. For background,
the SDRs were established in the late 1960s
to supplement of�cial reserves and facilitate
global liquidity. According to the IMF’s Articles
of Agreement, there are two instances when
allocations should be considered: every �ve years
and during unexpected major developments. Out
of the 12 periods since the institution of SDRs,
there have been only four general allocations
and one special allocation. You can see, even in
terms of size, there are two signi�cant allocations
in 2009 after the global �nancial crisis and then
in 2021 following the pandemic. What’s crucial
to observe is that even when we have the SDR
allocations, which are intended to assist with
global liquidity issues, their distribution is based
on IMF quotas, favouring countries with larger
economic sizes and better �nancial positions.
Essentially, these allocations often end up with
countries that don’t necessarily need them the
most.
Furthermore, when examining utilisation
across developing versus developed countries,
developed countries, despite receiving the
majority of the allocation, utilise less than 6%. In
contrast, developing countries utilise over 40%.
Several recommendations have emerged to
reform this system:
i. Make the allocation process more rule-
based, analytical, and less discretionary.
ii. Introduce clear and automatic triggers,
such as force majeure allocations linked to
pandemics and natural disasters.
iii. Consider de�ning a global recession as two
consecutive quarters of negative growth, as
commonly de�ned by economists.
iv. Recognise widespread capital �ight from
emerging and developing markets as one
of the triggers for allocation.
In re�ning the system of unexpected and �ve-
year basic period allocations, it’s essential to
consider how to reform the allocation formula.
The aim should be to ensure that the resources A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
68
go where they are most needed, true to the
original intent. This means, in addition to the IMF
quota consideration, the formula should include
liquidity considerations, ensuring that countries
in genuine need receive more liquidity.
And then the other issue which we’ve been
stuck with following the last allocation is how
do we really stimulate the SDR re-channelling?
So, following the last SDR allocation, a number
of countries have pledged that they would re-
channel these SDRs so that countries that needed
more can bene�t. But there have been a number
of obstacles. Some of the things that can be done
to actually unleash that is, for example, to enable
re-channelling of SDRs to MDBs. And we actually
have a viable option that has been put on the
table by inter-American Development Bank and
African Development Bank that need �ve SDR
donor countries to make it operationalised.
And of course, there are other things also in terms
of reviewing the SDR reserve asset characteristics
to make it more up to date with the practice of
many of the major central banks.
And then on the other major area that we’ve
been working on are reforms to the global debt
architecture. Here, this gives you a sense of the
evolution of the debt landscape for Africa, and
you can see that things have been changing, and
part of it is driven by the fact that there has been
a decline of of�cial development assistance and
availability of concessional �nancing, which also
contributed to having a much higher share of
commercial and private creditors.
But also, there has been an evolution of the
landscape of of�cial creditors with a more
increased role of China and other creditors rather
than just the Paris Club. This has implications for
the issue of debt resolution and restructuring.
Some of the recommendations that came out
of the working group relate to the need for
overhauling the G20’s Common Framework. For
instance, we had African countries that, from the
time they applied until a creditor committee was
formed, took two years. This illustrates how the
process has been very slow.
There’s a pressing need to reform it so that it’s
more time-bound, ef�cient, and transparent.
Implementing a suspension of debt service upon
application and bolder use of IMF lending into
arrears for both of�cial and private creditors
is essential. There’s also a need to establish
a comparability of treatment formula to
reduce technical disputes and expand creditor
committees to include private sector creditors.
Other signi�cant areas of the global debt
architecture that require attention include
the regulatory side. There’s a need to enforce
enhanced collective action clauses in debt
issuances and contracts and introduce force
majeure and climate-resilient debt clauses. We
had some progress this year in this area, and
there’s also a push to implement vulture fund
legislation. In the long term, there seems to be
a need to establish a multilateral creditor club
to coordinate the framework and oversee the
outstanding global debt issues.
Another pillar has been related to market access.
One prominent issue is the Africa Premium.
African countries tend to pay 150 to 250 basis
points higher than countries with the same
economic fundamentals. This discrepancy is
primarily driven by two factors.
Firstly, there are information asymmetries. There’s
a call for support from the G20 to enhance
this area by building capacity and increasing
resources. Secondly, expanding partnerships to
improve market access, particularly in areas like
ESG investment and green capital markets, is
vital.
Another critical aspect is the regulatory side of
credit rating agencies. There’s a perceived bias in
ratings, even for countries with similar economic
fundamentals. This highlights the need for
oversight in the industry to ensure fairness and
accuracy.
We recognise the oversight measures established
in the European Union, but there’s a pressing
need to consider these on a global scale. This
involves a thorough examination of the current
regulatory framework and proposed reforms to
improve oversight.
And there are a number of them that we can talk
about in terms of the green �nance area. Despite
that, Africa emits less than 3% of global emissions,
and it’s the most vulnerable region to climate
change. Africa bene�ts less than 1%, has basically
less than 1% of global green bond issuances. And
as we talked earlier, it tends to be higher cost. So,
there is really a need to tackle these issues.
From the IMF side, I think the move for having the
IMF resilience and sustainability trust is a move
in the right direction in terms of having facilities
that look like they are more long-term geared and A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
69
structural and climate action geared, but there is
a need to increase the �exibility and eligibility
criteria for it and to fast track operationalisation.
Other very important things for Africa in that
side is also to strengthen the inclusion of these
climate contingency clauses that we’ve talked
earlier about. And to stimulate debt for climate
and debt for nature swaps, and to use more
guarantees and availability of them to reduce the
cost of �nance for the continent.
And of course, supporting more de-risking and
blended �nance because we need to crowd in
the private sector much more. The private sector
currently is 14%. This is like almost a third of what
it is in Asia now. So let me just very quickly say
that we have also discussed issues of reforming
the Brettonwood institutions.
The way it operates has been more geared
toward country-speci�c shocks and things have
evolved with us facing multiple and tsunami of
global shocks. So, the tools and the way these
institutions have been operating need to change. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
70
TAO ZHANG
SPEAKER 2
M
y main message is that there’s
absolute urgency to �nd and
implement solutions to promote
green and sustainable growth.
In doing so, we have to give the
importance of the market-based incentives for
the net zero transition and what can be done by,
for example, central banks, which the Bank for
International Settlements (BIS) represents. This is
the main focus of my remarks today.
First, of course, you can see that we run a large
CO
2
gap between net zero ambitions and the
achievement we have made so far. For example, we
are seven years into the COP21 and the objectives
of 45% of reductions in Green House Gas (GHG)
emissions by 2030 from the 2010 level is still out
of reach. Without further actions of course, we are
heading to a 2.8 degrees temperature increase by
the end of the century. So, time is ticking.
Second, as many have already mentioned, there’s
a large �nancing gap. More or less worldwide, we
have averaged $480 billion annually during the last
10 years, which still falls short of the $4.3 trillion
annually. The number is quite phenomenal. But
the question is, where will the money come from?
MDBs, SDR? Some of these are already tapped.
Or private sector? But we know that all money
comes with a cost and we must have incentives to
overcome these costs. For private sector, if they
want to put money in, they need a return. The cost
is upfront. The bene�ts come out, who knows,
some years later. So how to bridge the gap?
So here I propose a three-pillar approach to
accelerate the transition. And the core of it is
market-based incentives. This is the �rst pillar.
Why? A moment ago, some people mentioned that
who picks the winner, etc. So instead of indicating
who should reduce emissions, who should �nance
the emissions, let the market play the role. And of
course, the key is to get the carbon pricing right. The
carbon pricing, of course, sends economic signals
to emitters and allows them to decide to either
transform their activities or lower their emissions or
continue the emission but with a higher price. So
that’s as simple as that because otherwise we just
end up debating who is picking up the thing. And of
course, right now, carbon pricing can take all kinds
of forms, for example, emissions trading systems or
carbon crediting mechanism, to name a few. But we
have to admit the progress has been very slow. And
we have to ask ourselves why is that?
Earlier this morning, I recalled some participants
mentioned that we would need to promote the
global emission trading system. I wholeheartedly
support it. But between now and then, we have a
lot of work to do. And so far, by the end of 2022,
there are only 34 Emissions Trading Systems (ETS)
globally, covering only 17% of global GHG emissions.
And carbon credit market is only voluntary for
business. So, there must be some huge impediment
on it. We have to work on it, �nd out the solutions,
and I think the G20 can work towards that.
Now, the second pillar. Of course, as everyone can
imagine, that we need international cooperation
as no one can achieve the climate objective alone.
And for obvious reasons, high emitting industries
will simply migrate to where the climate regulations
are the loosest. So, unless all jurisdictions act in a A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
71
closely coordinated way, these things cannot be
done. And of course, international cooperation
is necessary also on the account that there is a
great need to ensure the equitable burden sharing
between developed and developing countries in
pursuing the net zero objectives.
And the reason is very simple and compelling.
Developing countries are hit hardest by climate
change, but they are also the least able to �nance
climate mitigations and adaptation. So external
�nancing and technological transfers are most
needed for developing countries to build clean
and climate resilient features. The question is how
to make it happen. This is up to, of course, G20 to
answer.
So, the third pillar, we have to rely on public policies.
So here, to get the carbon pricing right, market
forces sometimes cannot achieve it alone. Public
policies play an important role in it. For example,
carbon tax needs a base: how much and how broad.
And of course, this also relates to the removal of
energy subsidies. And of course, related to the
associated regulatory policies that also impose
the shadow price on pollution. In general, public
policies play an important role. Here, because I
come from central banks, I have to say a few words
on central banks, particularly, the BIS, what our role
could be. Very brie�y, three roles we can play.
First, as green investors. Indeed, many central
banks, including us, the BIS, have already adopted
the investment strategy. The European Central
Bank (ECB) is taking the lead on this front, and
indeed, India earlier this year also issued a green
bond. And the Indian government also issued
the framework which highlights the quali�cations
and disclosure requirements for green bonds. So,
things are happening on the ground. For us, the BIS
has set up three Green Bond Funds. The number
is around $3.5 billion, not huge compared to the
trillion-dollar requirement. But we hope, with our
issuance though, the private sectors and others
can follow up.
Second, we can also work as a technology enabler.
In a sense, the central bank can test promising new
technologies for green �nance. And here I would
like to do a little bit of promotion. Five years ago,
the BIS set up something called the Innovation Hub
at the headquarters. Subsequently, we set up nine
Innovation Hub centers across the world, including
two in Asia, one in Singapore and the other one
in Hong Kong. In these centers, we are piloting
a number of projects utilising new technology,
including blockchains, to ensure that green
�nancing can bene�t from the new technologies,
improving ef�ciencies and impact measuring.
And third, as regulators, central banks can regulate
and implement disclosure measures, and set
regulations for the banks, working together with
other standard-setters like Financial Stability
Board (FSB) and Basel Committee on Banking
Supervision (BCBS). To conclude, there’s real
urgency among us to act now and act early. Asia
should take the biggest bene�t from it because we
are not only the most populous region in the world,
but also the most dynamic in terms of economic
activities A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
72
POONAM GUPTA
SPEAKER 3
M
y presentation is based on my past
and ongoing research (for one
decade each at the IMF, and at the
World Bank, and the last two years
at NCAER, India’s leading economic
policy think tank).
As has been said at the conference today
throughout the day, �nancing needs have
increased around the world. Meanwhile, global
liquidity has become scarcer and private capital
�ows have remained as �ckle as ever.
Three kinds of �nancing are available to the
emerging market and low-income countries.
First, the private sector funding at market rates,
which is volatile and can �ow in and out at very
short notices. Such funding is available only to
the emerging markets which are able to attract
private sector funding.
Second, multilateral funding, which is long-
term and concessional, but is limited in volume.
Increasingly, it is the low-income countries that
have greater access to multilateral funding.
Finally, there is bilateral funding, which is smaller
in volume compared to the �rst two, and has
increasingly become more strategically tied with
speci�c projects. In bilateral funding, new funders,
particularly China, have replaced the traditional
funders.
When we talk about global �nance for sustainable
growth, we need to de-risk private capital �ows
for emerging markets, as well as rethink the
�nancing envelope and sources for low-income
countries.
The capital �ows to emerging markets have
become more volatile over time, and the episodes
of reversals have become more frequent. The
nature of such reversals has changed as well.
Earlier the reversals would occur as country-
speci�c sudden stop events, e.g., those in Mexico
1994, and the East Asian countries in the late 1990s.
Increasingly, these events have been occurring
as emerging markets-wide sell-off events, when
capital �ows suddenly reverse out of emerging
economies back to the advanced economies.
Recent examples of these episodes include the
�rst taper event in 2013, and the subsequent ones
in 2016, 2018, 2020, and 2022.
When the reversals of capital �ows happen,
they create volatility, and thereby challenges for
the policymakers. The latter, within a very short
period of time, have to manage their exchange
rates, communications, market sentiment, and
the levels of foreign reserves.
These reversals and their impacts accrue despite
the fact that emerging markets now maintain
strong economic frameworks, speci�cally the kind
of frameworks that the IMF recommends. These
countries have more resilient growth outlooks,
strong �scal positions, credible �scal and
monetary policy frameworks, and independent
central banks. Besides, they hold large volumes
of foreign reserves, limit the exposure to foreign
currency in their debt portfolios, and maintain
�exible exchange rates.
India is one such example. Despite its strong
policy frameworks and a resilient economy, it too
gets subjected to the reversals of capital �ows A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
73
from emerging markets during an emerging
market sell-off episode.
A key question to ask is: How do we make access
to capital �ows safer for emerging markets?
For this, the global �nancial safety nets ought
to be strengthened, and this is where the role of
multilateral institutions such as the G20 and IMF
and bilateral arrangements becomes important.
Countries generally sign up for bilateral swap
lines in hard currency liquidity, and often with
many countries at any given point in time. But
these have not been enough to insulate them.
The bilateral swap arrangements have proliferated
during the last decade, led by China. China has
offered swap arrangements to many low-income
countries, with countries that it considers of
strategic interests, and with ones that it has had
strong trade relationships with.
The US’s Federal Reserve Board too offers
its own swap lines, but in a rather limited and
selective fashion. It has offered them to other
fellow advanced economies and only to four
emerging markets, which do not include India.
Empirical results show that the bilateral swap
arrangements are of limited use unless these are
from a large, credible country, which issues hard
currency, such as the US.
Countries also sign up for regional �nancing
arrangements, e.g., the Chiang Mai, BRICS and the
SAARC initiatives. These regional arrangements
have mostly not been invoked at times of the
capital �ow reversals.
Finally, there have been three IMF contingency
lines, with the �rst one introduced in 2009. The
latest one, the third one, was established in
2020. Yet, until 2021, only eight countries had
ever signed up for those, including Mexico and
Colombia, among others; and only three countries
have ever drawn funds. Further, there has been
limited innovation in these credit lines despite this
very limited use.
Incidentally, however, these global �nancial
safety nets have been inadequate or ineffective
in making the �ow of capital safe and resilient. As
a result, the emerging markets are left with few
choices but to accumulate and use their foreign
reserves more actively. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
74
The credit rating of an emerging G20 country
versus an advanced G20 country yields interesting
results and is a potential area of reform. An average
advanced G20 country has an almost perfect
rating. If the ratings are converted into numerical
ratings ranging from 1 to 20, an average advanced
G20 country boasts of a near-perfect rating of
19, while an average emerging G20 country has
a rating that’s seven and a half points lower, just
a notch above the junk rating. This disparity is
inexplicable and persists even after accounting
for the obvious sources of variation.
When it comes to the �nancing for low-income
countries, a large number of these economies
are facing some degree of debt distress. The
average general government debt to GDP ratio is
high, with a signi�cant portion of it being raised
externally. Breaking down the lenders, we �nd
that the multilateral institutions hold about 50%
of this debt, even as the new bilateral lenders are
emerging, with China leading the pack.
Regarding �nance for low-income nations, MDBs,
including the World Bank, conduct their debt
sustainability analyses. Yet, if most of the low-
income countries are mired in debt distress, one
may question the ef�cacy of these analyses and
ask whether the debt sustainability analyses
ought to be conducted more robustly.
Exchange rate risk is another signi�cant concern
that warrants discussion. How can we mitigate, at
least partially, the exchange rate risk associated
with external �nancing for low-income countries?
Thus, on rethinking global �nance during the G20
presidency, the following lessons emerge.
First, the buildup of foreign exchange reserves by
emerging markets should be supported.
Countries shouldn’t be labeled as currency
manipulators when they utilise their reserves.
Second, the model and governing frameworks of
credit rating agencies need to be regulated more
fairly.
Third, the G20 should motivate central banks to
expand their currency swap networks. Relatedly,
the issue related to the spillovers of monetary
policy ultimately originates in the US. It may issue
the swap lines more widely. Swap lines from other
issuers of hard currencies ought to be expanded
as well.
Fourth, the IMF ought to extend the use of
contingency lines. They can declare in their
Article IV reports as to which country quali�es
for which one of the lines and for what amount.
There should be automatic triggers for when such
liquidity becomes available. The countries should
have to pay for the lines only when they draw on
them.
Finally, we may also better account for the
impact of the policies of advanced economies
on emerging markets. There has to be a more
balanced cycle of monetary expansion and
withdrawal. During the �nancial crisis of 2008-
2009 and again during the COVID crisis in 2020,
when monetary policy needed to be eased, the
issue was discussed extensively in G20. Thereafter,
within the G20, all countries agreed to ease their
monetary policies. However, when it was time to
normalise these policies, the decisions were taken
and implemented bilaterally without involving all
the member countries. There is obviously a need
for greater symmetry in this process. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
75
MANJEEV SINGH PURI
EXPERT COMMENT
I
want to draw your attention to the hard
realities of climate change. Let’s take India
as the benchmark. Where is the most
important amount of action required to be
taken? It is the large developing countries,
most of whom qualify as emerging markets.
Secondly, do they have sufficient capital by
themselves? Can we simply squeeze it out
of them? As it is normally said in multilateral
meetings, we will do best practices sharing,
capacity building, tell you how to go about
doing it. You really think that’s the case? I can
give you the figures as far as India is concerned,
only looking at the announcements we have
made till now on renewable energy, etc. even
to meet a part of them would take care of a
fourth of all deposits in Indian banks and so on
and so forth.
And I’m not talking about adaptation, which
is a completely different ballgame. We have
no choice but to get capital from overseas.
Macroeconomics, swaps, portfolio investments,
all those are issues. Why are our companies not
able to raise money overseas? Of course, there
are some cases which are very successful, but I
want to tell you in the context of his report, Mr.
N.K. Singh carried out a small group session,
which included two of India’s large players in
the international market, one from the private
sector and one from the state sector. And Sir, I
hope you will recall that the one word that both
of them used was bring down hedging costs.
Do you know what the hedging costs today
are? For some of India’s largest and best-
known groups, they could be upwards of 4%.
This is the reality of things. Today, interest rates
worldwide are a little high. A few years back
they were rock bottom. But what was it that
our countries and our companies were able to
meet?
Where are we going to be able to get funding?
We have no choice but to turn to what is the
situation?
Is there a macroeconomic deficit? No, there
isn’t. In the world. There is enough money. We
who need it don’t have it. How do we attract this
money by making investment in our countries
interesting to them, worthwhile for them and for
our people who are doing business affordable.
There are two sides to this point.
Can we just do one little thing? It’s not a panacea,
but will it help? And that simple thing is can we
do something about foreign exchange costs? I
want to read to you something from the triple
agenda. Very lovely paragraph, small one. I’ll
read two lines. A particular pain point for private
investments. If private investors is exposure to
currency risk. And then they go on to say that
they will deal with it in volume two. These are
simple words, a pain point. What does it mean?
It simply means that on both sides, affordability
remains a real problem. Can we do something
about it? And you know, I don’t want to get in
again, as I said, on geopolitics and so on. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
76
The smallest developing countries, the least
developed countries, well, there is much that
we need to do for them, all of us, including
emerging countries. If we can’t get things done
for ourselves, what are we going to do?
And what are some of these ideas? If you take this
kind of agency at the multilateral bank side, and I
believe a bank is a better place than the trust fund
under the IMF for this because it is in the nature
of action for a particular product, a particular
investment, a particular company or a project.
I just want to make this one focused point.
What can we do to make the movement of
capital from the industrialised countries to
projects, companies, corporates doing green
work, only green climate-related investments
in the developing countries. I dare say much
of that will flow to the largest developing
countries. But remember, climate change is a
global problem. What I do here affects you.
What you do there affects me. So, it has a
global impact. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
77 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
78
July 28-29, 2023
Hotel ITC Maurya, New Delhi, India
HOMI KHARAS
Senior Fellow, Center for
Sustainable Development,
Brookings Institution
Washington DC
(USA)
ROBERT LAWRENCE
Albert L. Williams Professor
of International Trade and
Investment, Harvard University
(USA)
VIRTUAL DISCUSSION AND
WRAP UP OF DAY 1 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
79
I
wanted to very brie�y touch on my topic, which is
technology, policy, and jobs. I’d like to talk about
the employment dimension of technological
changes that we’ve experienced in the past and
that we’re likely to see continue in the future.
Then to re�ect on some policy responses to those,
particularly with an emphasis on what they mean
for the labour market.
We have undergone a major transformation in our
economies since the 1980s. There are three huge
shocks which have hit the economy. The �rst I
would characterise as skilled-biased structural
change. Because of relatively rapid productivity
growth in manufacturing, the share of employment
in manufacturing has declined in many countries.
This phenomenon of skill-biased structural change
i.e. lower manufacturing employment shares --has
led to much more dif�culty in developing countries
achieving the same levels of manufacturing
employment shares as today’s advanced
economies were able to achieve. This has meant
fewer employment opportunities. Manufacturing
was a major ladder to inclusion, allowing workers
to join the middle class. Those opportunities have
diminished. This is not to say that manufacturing
can no longer play a role, especially in countries like
India. But it is dimished.
We’ve also seen within industries, a skill-biased
technical change. Digital technologies have tended
to complement the skills of more educated workers
and to substitute for the skills, especially of mid-
level workers. This has resulted in a polarisation
of the labour market with fewer opportunities for
those workers with mid-level skills.
A third dimension, which I believe is not suf�ciently
appreciated, is that the nature of capital has
changed and it is increasingly intangible. Inputs
such as software, databases, patents, algorithms,
organisational capital, and branding have become
much more important. If you look at the US data
for manufacturing, these forms of intangible �xed
assets today are more important than equipment.
Many people talk about automation, but in fact,
it’s the intellectualisation of production that is
increasingly driving capital formation.
As we look to the future, there are challenges,
especially for less skilled workers and for countries
that seek to specialise in labor-intensive products.
We are seeing investments in robotics, 3D printing,
and augmented manufacturing. Now, we have AI,
whose impact is ultimately uncertain, but certainly,
the capacity to substitute for routine workers is
going to be considerable. These are pressures which
now face all countries, especially those who seek
to specialise in unskilled intensive manufacturing
products.
However, there are also considerable opportunities
which new technologies are going to provide. We
have now have this unbelievable capacity for people
throughout the world to access knowledge. We also
have the ability to use technologies to save on bricks
and mortar. AI could actually work in both ways. As
was noted in the general discussion, e-commerce
gives us new opportunities for entrepreneurs. We
have the ability to do remote work, not only within
countries but across borders. Richard Baldwin calls
this “Globotisation.” If those who live in developing
countries are able to be employed in advanced
SPEAKER
ROBERT LAWRENCE A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
80
countries, earn higher wages, and then spend their
money on non-traded goods, this can provide
opportunities for less skilled workers.
What has been striking is that, as I look at the new
policies being implemented, I think they, by and
large, are going to reinforce these skilled-biased
technical changes. (Though AI may be an exception).
We see the emergence of technological rivalries
in which countries are vying for global leadership
in technologies which tend to work against less
skilled workers. Robotics, additive manufacturing,
3D printing, semiconductors, nanotechnology,
advanced materials, autonomous vehicles,
telecommunication technologies, and advanced
pharmaceuticals all are relatively intensive in skilled
and educated workers. The geopolitics are playing
into these forceful trends which are tending to
work against less skilled workers, highlighting the
policy challenges for the labour market.
Green growth as well: My reading of the evidence is
that, from a macroeconomic perspective, the best
estimates we have, suggest that the net labour
force effects of the green transition to net zero are
quite small. Although politicians like to accentuate
the positive and stress the kind of great new jobs
that will be available, there is going to be a lot of
disruption in the fossil fuel markets and production
of products that are intensive in emissions. If
you simply think through the differences in the
technologies required, for instance: electric
vehicles, which are estimated to have something
like 200 parts versus the traditional combustion
engine-driven automobile with 1,200 parts, you can
predict that there will be a need to move production
workers out of automobile production. Today’s
electric vehicles, in addition to their batteries, are
basically computers on wheels.
And so, this is a tremendously skilled-biased
technical change that is going to characterise this
particular dimension of the Green Revolution. But
you can go through other technologies as well,
and you can see that while they will create a lot
of construction jobs initially, which leads to more
inclusive growth,but at the end of the day, the
operators and designers are going to strengthen
the tendency towards this bias in skill.
We have a lot of people who depend on fossil
fuel production. Many of those workers are in far-
�ung places because that’s where we’ve located
the coal mines and other production facilities. The
production of renewables will not necessarily be
appropriately located in the same places. So, we
face a great challenge in adjusting, and there’s a
lot of talk about “just transitions” and I couldn’t
underscore their importance more.
But nonetheless, thus far, my reading of both
what the United States has done in its In�ation
Reduction Act and what other countries are doing
to think about not just the winners but the losers, is
totally inadequate to the task of aiding those who
will lose. And the same kind of division occurs at
the global level between countries that produce
fossil fuels for export, oil-exporting countries on
the one hand, and the new countries who do have
opportunities to specialise in green technologies.
So, if we take our lessons from what happened in
the past, the failure to deal with the adjustment
problems of the globalisation that we have
experienced ultimately had seismic political effects.
And we saw the emergence of populism and an
antagonism to free trade.
Well, we’re facing a very similar challenge today
when it comes to green technologies, and I don’t
think there is suf�cient emphasis in the discussions
on the kinds of policies that are required, both in
developing countries and in developed countries,
to deal with this dimension of decarbonisation.
I would underscore the need for more effective
transfer programs, adjustment programs, training
policies, and the emphasis on skills, given the forces
that are working on the labour market today.
And �nally, I would simply underscore that
whatever the microeconomic policies are, nothing
is better for a well-functioning labour market and
for creating opportunities than macroeconomic
stability. We’ve been reminded numerous times
and seen the evidence of how worker power and
worker rights can be reinforced in economies that
are able to sustain full employment. And for those
at the bottom who are going to experience a lot
of the dif�culties, the best policies are to drive the
economy towards a non-in�ationary state of much
fuller employment. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
81
I
’m going to talk about very big themes:
geopolitics, governance, and the global
commons as they relate to multilateralism.
And I’m actually going to do it in reverse
order. I’m going to start with the global
commons. I’m going to say a few words about
governance and then about the politics. Finally,
I’ll comment on, what does all this mean for a new
multilateralism? Because everybody says that if
we’ve got these issues of the global commons,
then that requires multilateral cooperation. Well,
what does that really mean in practice?
So, I wanted to start with the global commons
because it’s really the global commons issue that
is driving a lot of the change that we see in a
lot of the discussion about multilateralism. And
the big point about the global commons issue is
that it is urgent and it requires a large amount of
money to address.
I want to start with some numbers. These are the
numbers that you’ll see in the independent expert
group report for the G20 on strengthening MDBs
(MDBs). You’ll also see these numbers now in a
whole range of other multilateral discussions. But
SPEAKER
HOMI KHARAS A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
82
basically, what we’re saying is that developing
countries—and now I’m excluding China from this
group in these numbers because its reliance on
multilaterals is of a different nature, should I say,
than many of the other countries— will have to
spend something like $5.4 trillion by 2030 every
year if they’re really going to make a serious
dent in the SDGs, in climate, and in nature. So,
how does this $5.4 trillion break down?
I just want people to be clear about these
numbers. That $5.4 trillion is broken down
between other SDGs and climate and nature-
related investments. And I want to be quite clear
in saying that making these kinds of divisions
is somewhat arti�cial because there is so much
overlap between what one calls climate-related
investments and what one calls SDG-related
investments. Nevertheless, just for clarity, I don’t A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
83
want people to forget how important it is to
maintain the investments in other SDGs. And all
of these conversations that we’ve been having
about increasing skills, etc., all go to this notion
that education, health, and skilled labour forces
are absolutely essential for these new economies.
But the big increase, because we’ve started
from such a low base, is actually in the climate
and nature-related investments. And those
have to be ramped up very, very rapidly. You
can see from this slide that the big increase
there is on the energy transition, but also with
important aspects of adaptation, resilience, loss
and damage, and some of the natural capital
investments that we’ve talked about. This is just
to give you a sense of the scale of these kinds of
spending. And this is probably something which A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
84
is around 10% of the developing country GDP
by 2030. So, it will have big macroeconomic
implications if indeed it is implemented.
One can say these numbers are just plucked
out of thin air. But these are numbers that have
actually come from very serious, what I would
call, engineering approaches, where you look
sector by sector at very speci�c kinds of things.
How much will it cost in the power system for
zero carbon generation, for storage in the
transport system, for EVs, for energy ef�ciency
in buildings, and so on and so forth? So, it’s
built from a set of quite detailed estimates of
what it would take in order to do these kinds
of investments ef�ciently. And I was very struck
actually when Kapil was talking, and he said
that there are short-term upfront costs, but
bene�ts over the long term. To me, that’s just
a description of what we mean by investment.
Every investment involves a short-term upfront
cost and bene�ts that come later.
In all of these areas, we’re really talking about
investments. This is the nature of what we
need to do. Then you have to ask yourself the
question: how are we actually going to �nance
all of this? And so, you can start from saying this
is the investment �nancing that is needed: some
of it will come from domestic resources, some of
it will come from external resources.
This is the split that we have taken in the MDB
report and in other areas. And you’ll see that
from the external �nancing side, we’re talking
about a trillion dollars. This is the source of the
famous ‘we need a trillion dollars in external
�nancing for developing countries.’ What do we
mean by that? We mean it’s going to come from
some private �nance, maybe something around
half. Some from the MDBs and other sources of
low income
catalysed $63.6 billion A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
85
non-concessional �nancing, maybe about 30%.
And some from concessional �nancing from
bilateral agencies, which is also going to be quite
important.
So, that’s the breakdown of what we need. But
I do want to underline that the notion of the
Global Commons has provided a sense of scale
and urgency to the question of development
that we have never had before. And so, at least
in the way I look at it, development is now an
imperative. Before, development was always
treated by the rest of the world as something
that was quite nice to have. If you can manage
to get some more prosperity amongst more
people, that would be a good thing. But if it
doesn’t happen, I’m sorry, it’ll happen sometime
later. You can’t take that same approach with A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
86
climate or with nature because of the tipping
points that are associated with it.
Alright, let me now turn a little bit to governance.
I’m not going to talk about things like shares in
multilateral organisations and their seats and
stuff like that. What I’m going to talk about is
governance outcomes. Are these organisations,
as they’re currently constituted, doing the right
things, and are they doing them well?
First, I would say yes, by and large, they are
doing the right things. There’s a survey that was
done by ODI, in which they ask, ‘What are the
kinds of things that you think the MDBs do which
support you?’ And the respondents all say, ‘Well,
providing external �nance at better than market
terms, that’s very important.’ Many of them say
the knowledge and the technical assistance is
very relevant to support their national plans,
strategies, and budgets. But when they are
asked, ‘How are the MDBs doing?’ most of them
say it’s very complicated and dif�cult to work
with them.
In some of the discussion I heard someone who
said that he had tried to write some grants for
the Green Climate Fund and what a complicated
process that was. That’s a theme that comes
out all the time. You can see a summary of the
�ndings of the survey. These blue bars tell you
what respondents to this survey say are really
important things that they think the MDBs do.
And then the orange bars ask, ‘Are they doing
a good job?’ And you can see that there are big
gaps in several major areas.
That’s why we can’t just say, ‘Let the MDBs
do more.’ The MDBs also need, in my mind, a
different type of governance that pushes them to
improve their performance in all of these areas.
One simple area where they can improve is just
by being a little more transparent and clearer
about what they’re doing. If you go into the
OECD website and you ask how much private
sector money is being mobilised by multilaterals
in 2021, you get an answer: $27 billion. When you
look at the of�cial report by the MDBs about
how much they have mobilised, they say it’s $63
billion. Well, it can’t be both at the same time.
I understand they use different methodologies
in these different places, but when we have a
discussion about something so important like
private mobilisation, it’s enormously confusing
when important global bodies use radically
different de�nitions.
There are also lots of things, some of which we’ve
advanced in the expert group panel report, about
how MDBs could actually work much better as a
system. Many people know that MDBs actually
compete with each other rather than cooperate,
and they do that because they’re keen to �nance
a particular project. Right now, there aren’t
that many projects which are ‘bankable.’ Why?
Because the development of the project pipeline
is a public good. If an MDB develops a project
and then another MDB �nances it, it’s a net loss
for that MDB. So, they’re very careful about
which projects they’re going to help prepare.
It’s only the ones they’re going to �nance. We’ve
had, therefore, real underinvestment in the A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
87
development of the project pipeline. MDBs could
do a lot more in terms of cooperating with each
other on regulatory and institutional reforms
and really pushing that agenda. They even have
a database, which is called the Global Emerging
Markets Database, which is about how their long-
term infrastructure projects have performed
in developing countries. But by and large, they
keep it secret. Although my understanding is
that now there’s an agreement that will make
this publicly available. But you need that kind
of transparency if you are ever going to have
sustainable infrastructure becoming an asset
class. This would make the process much more
ef�cient and would help private investors have
more understanding and clarity when they get
into these areas.
Now, let me just turn quickly to the politics, or
if you will, the geopolitics. Where we were at
the time of the last World Bank capital increase
was the G7 countries were basically saying we
don’t want these MDBs to do anything more
than what they’re currently doing. In fact, David
Malpass—the former president of the World
Bank, at that time the Under Secretary of the
US Treasury— in his testimony to Congress, very
proudly said, ‘Yes, please give the World Bank,
IBRD and IFC, a little bit more money. It’s quite a
small capital increase because we have got them
to agree on a new �nancial discipline mechanism
that will stop them from ever coming back to
you again for more money.” So, the last capital
increase really served to limit what IBRD calls
the sustainable lending level to $27 billion per
year in new commitments. That’s now gone
up a little bit, thanks to the implementation of
the recommendations of the so-called capital
adequacy framework, but still not by much. But
the mental frame was we don’t really want or
need these institutions to expand enormously.
Then, on the other side, you have the developing
countries—the big developing country
borrowers. President Lula, when he went to the
Paris Summit on the new Global Financing Pact,
said, ‘Let’s be clear, the World Bank leaves much
to be desired in terms of what the world wants
from the World Bank and the IMF.’ I was smiling
when I heard in the last session that maybe the
G20 wants to take a look at the IMF as well as
at the MDBs. Certainly, that’s something many
developing countries want.
But what was the response? The response from
the big borrowers was not to say, ‘Let’s try to �x
these institutions.’ It was to say, ‘Let’s create our
own institutions.’ And the big new institutions—
the Asian Infrastructure Investment Bank, the
New Development Bank, and CAF (what’s now
called the Latin America Development Bank)—
which don’t have any G7 shareholders (though
AIIB does), were founded by developing
countries for developing countries and now
are committing something like $20 billion a
year. So, quite a large portion of the total MDB
commitment.
My point here is simply to say there is not
necessarily a huge amount of political support
for the current MDBs in the environment we see
ourselves in today. This is rather unfortunate, and
I’m going to conclude with this because, as I see
it, here are a few propositions which I think many
people would agree with. The �rst is you cannot
meet these global challenges without a very
sizable step up in public and private investments
in developing countries. I don’t think many
people would disagree with that statement.
Then you say, ‘Could developing countries just
do this by themselves?’ And again, with very few
exceptions, maybe China might be able to do it
by itself, but with very few exceptions, because
of their limited �nancial and technical capacity,
I would say almost all will need considerable
international support.
Then you ask, ‘Where is this going to come from?’
Some people have talked about new institutions.
It takes years for a new institution to become A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
88
operational and to be able to scale up its lending.
We don’t have years to really start addressing
these global challenges at scale. You can’t do
it just through concessional lending, the Green
Climate Fund, etc., because there isn’t enough
money there. They don’t have the leverage. So,
I believe that the only option we have to deliver
the support at scale is the MDBs because of their
ability to leverage �nancial support from their
shareholders. But we won’t. Nobody is willing to
put more money into these shareholders unless
the MDBs, in turn, transform themselves. And
they have to do that before helping countries to
transform the world. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
89 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
90
July 28-29, 2023
Hotel ITC Maurya, New Delhi, India
V. ANANTHA
NAGESWARAN
Chief Economic Adviser,
Ministry of Finance,
Government of India,
New Delhi (India)
MARI PANGESTU
Former Managing Director,
Development Policy and
Partnership, World Bank
(Indonesia)
JEAN-LOUIS ARCAND
President, Global Development
Network (GDN),
Geneva (Switzerland)
RAMESH CHAND
Member, NITI Aayog
(India)
RAM MADHAV
President, India Foundation,
New Dehi (India)
SESSION 5
MULTILATERALISM: GEOPOLITICS,
GOVERNANCE AND THE GLOBAL
COMMONS A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
91
SESSION CHAIR
W
e all know it’s a truism that there
is no politics without economics,
and there is no economics
without politics, and there is no
multilateralism without taking
geopolitics into consideration. We know that
multilateralism �ourished after the end of World
War II. There were attempts to create multilateral
institutions in the aftermath of World War I as well,
but that met with a little success. In fact, if we
analyse the causes for multilateralism to take off
and �ourish after World War II but not after World
War I, we might in fact be able to understand some
of the reasons as to why it is currently �oundering.
In fact, at the end of World War I, the kind of
obligations and reparations imposed on Germany
created the preconditions for the emergence
of World War II indeed. So, are we in one such
situation now? Because post World War II, the
victors, although the camp split immediately
after the end of War II, the victors were able to
take an attitude of enlightened self-interest and
combined with magnanimity, were able to create
several institutions that stood the test of time for
several decades. They have currently commanded
strain. In fact, we are having this discussion within
a week or two of two important books having
been released. One by Neil Howe, who along with
V. ANANTHA NAGESWARAN A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
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William Strauss co-wrote The Fourth Turning, and
another book by Peter Terrence, both of which
have been reviewed by Francis Fukuyama for New
York Times.
So, is this an inevitable part of the cycle that
nations and the globe itself goes through? In other
words, do things have to get worse before they
get better? Alternatively, in order to make sure
that multilateralism works in the interest of global
commons and global public goods, for example,
do we need a Truth and Reconciliation Commission
for Global Commons similar to what South Africa
did at its independence on topics such as global
warming and pandemic prevention?
Therefore, should be the topic of this session.
How has geopolitics affected multilateralism and
the governance of multilateral institutions? How
far and how much has it come in the way of the
provision of global commons and global public
goods? A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
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I
’m going to talk in the context of this session
about health and vulnerability, something which
has been patently absent from what we’ve
talked about over the past day. Perhaps in some
sense it’s because we’re all tired of dealing with
health issues after the Covid pandemic. It’s like our
British friends with Brexit; they just don’t want to
talk about it anymore. But at some point, especially
in the context of the G20, we do have to talk about
health vulnerability, what the G20 can do about
this and the link that it has to the Global South.
This presentation will have a three-pronged
structure. First, when health involves positive
externalities, multilateralism and the global system
seem to have no trouble handling it. These are
no-brainer gains. I’ll give three examples that I’ve
worked on, but there are many more, and a lot
of people in the room could come up with other
examples.
Second, I’ll discuss vulnerability to losses, taking
the example of Covid, but not in medical terms
or vaccine nationalism. Rather, I’ll focus on the
economic costs of Covid to the Global South. We
have a lot of good intentions, especially from the
Global North with respect to the Global South, and
maybe there’s something we can do about this.
I’ll conclude by trying to be a little provocative in
terms of the G20 and geopolitics. The conceptual
framework that economists use to think about
health will be the basis for my arguments.
Health and development are often understood
through what’s known as the Grossman model, where
health serves dual roles. It’s both a consumption
good and an investment. On one hand, we value
health because it makes people more productive.
On the other hand, it’s a consumption good in its
own right that contributes to well-being.
When we consider health interventions, we’re
not solely interested in their economic impact.
Examples of such interventions include Universal
Health Coverage (UHC), which is a major topic on
the global stage. Having spent the past 15 years
in Geneva, I’ve had numerous interactions with
WHO experts who frequently discuss UHC. Malaria
eradication and the introduction of various types
of vaccines, such as a novel TB vaccine set for
introduction in 2028, are other examples.
These interventions often have favourable cost-
bene�t ratios. While their impact on economic
growth may sometimes be relatively small, their
effects on health metrics such as Disability-
Adjusted Life Years (DALYs), Quality-Adjusted Life
Years (QALYs), or lives saved, and deaths averted
are signi�cant. Multilateral institutions are well-
equipped to address these issues, given the high
payoffs of these interventions.
SPEAKER 1
JEAN-LOUIS ARCAND A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
94
We have global institutions like the WHO and more
specialised ones like GAVI or the Global Fund that
coordinate action on these global health issues. For
example, let’s consider Universal Health Coverage
(UHC), which targets a range of health issues
from childhood diseases to non-communicable
diseases, TB, and HIV/AIDS. I’ve worked on this
with colleagues at the WHO, and when you look at
the impact of UHC on GDP or sustainable growth,
it’s not necessarily huge. However, the impact on
averted deaths can be signi�cant. For instance,
implementing UHC in India could prevent a large
number of deaths, as illustrated in the Table 1.
Another example is malaria eradication. There’s
a whole body of literature on this, and global
eradication is indeed possible. We’ve made
signi�cant progress in this area. Eradicating
malaria not only saves lives but also has economic
bene�ts. It shifts the income distribution of endemic
countries to the right, effectively improving the
economic conditions of these countries. This is
illustrated in Figure 1.
So, these are what I would call “no-brainer”
investments. Depending on how you value
human life and well-being, there’s a strong
global will to implement these kinds of health
interventions.
The novel tuberculosis vaccine is another example
of a global good where multilateral systems can
help us adopt these interventions. Especially in
Southeast Asia, India, and Russia, the introduction
of this vaccine is expected to yield signi�cant
bene�ts. Again, these are “no-brainer” investments
that the global community should be making, as
illustrated in Figure 2.
Now, let’s switch gears and talk about the �ip
side, which is Covid. The issue here is that we
have permanent impacts from transitory shocks.
I’m not talking about the vaccine itself, but rather
the economic consequences of the pandemic. In
the global North, including OECD countries and
China, we had shutdowns for very good reasons.
These shutdowns led to massive recessions, with
an approximately eight percentage point drop in
GDP growth.
The shutdowns were informed by epidemiological
models, and many of us in the economics profession
suddenly found ourselves diving into epidemiology
to understand the dynamics of the pandemic.
But the key point is that these shutdowns, while
Table 1. Averted deaths due to UHC.
Figure 1. The economic gains to eradicating
malaria.
Figure 2. The expected economic gains to
introducing the novel tuberculosis vaccine, by
world region. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
95
necessary for public health, had severe economic
repercussions.
What happened in the Global South, particularly in
Sub Saharan Africa (SSA), is that the recession in
the Global North was transmitted to these regions.
Estimates suggest that about four percentage
points of growth were lost in sub-Saharan Africa
due to the recessions caused by lockdowns in the
global North. The primary transmission mechanism
was trade, especially affecting countries in sub-
Saharan Africa that were more open to trade.
Figure 3, based on IMF World Economic Outlook
data, shows the predicted growth for Africa in
November 2019 and then what was expected in
April 2021, after the onset of Covid. The impact is
clearly visible.
The third part of this mechanism is that severe
recessions in the Global South, and particularly
in sub-Saharan Africa, have fatal consequences.
These recessions are not just economic statistics;
they have a human cost.
The data show that severe recessions have a direct
impact on mortality rates, particularly in sub-
Saharan Africa. While in developed countries, health
tends to be countercyclical with respect to GDP, the
opposite is true in developing countries. The graphs
in Figure 4 indicate that severe recessions, even
when controlling for GDP per capita levels, lead to
increased death rates and infant mortality. Positive
growth, on the other hand, doesn’t signi�cantly
reduce mortality, as indicated by the �at con�dence
spans to the right of the graphs.
When you put all these numbers together, the
back-of-the-envelope calculation suggests that
the actual cost of Covid to just sub-Saharan Africa,
due to shutdowns in the Global North, is roughly
Figure 3. The growth shortfall in SSA during the onset of the COVID-19 pandemic. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
96
half a million lives lost. This is illustrated in Box 1
which provides details of the calculations. This is
a signi�cant transfer of human costs (death, to be
precise) from the Global North to the Global South.
I’m not arguing against the necessity of shutdowns
in the Global North; that’s not the point. The point
is that these spillover effects are not adequately
considered by the international community. There
are numerous examples where policies in the
Global North have unintended, often devastating,
consequences in the Global South. This highlights
the need for some kind of international insurance
mechanism to mitigate these impacts. Points that
have been raised earlier, such as the call for a more
focused and effective approach from the G20, are
well taken. The decline in Of�cial Development
Assistance (ODA) over recent years is of great
concern, particularly for sub-Saharan Africa. While
ODA may not be a growth engine, it can serve as a
crucial insurance mechanism, especially if designed
to be countercyclical. This could help mitigate the
negative spillover effects of policies in the Global
North on countries in the Global South.
I have provocatively argued elsewhere for the
equivalent of a “Non-Proliferation Treaty” on
Sustainable Development Goals (SDGs). The
current framework with its 169 targets and 247
indicators is overwhelming and, frankly, impractical
for policy implementation. A smaller group like the
G20 could indeed focus on more tangible goals,
such as sustainable growth, which would be more
actionable and impactful.
Adding an insurance mechanism speci�cally for
the world’s poorest countries might be an idea
worth delving more deeply into. Whether we’re
talking about sub-Saharan Africa or the Least
Developed Countries (LDCs), such a mechanism
could provide a safety net against the unintended
consequences of global policies. This could be
a signi�cant step toward a more equitable and
sustainable global system.
Figure 4. In SSA, severe recessions kill, but expansions do not save lives.
Box 1. The death transfer from the Global
North to SSA. Marginal effects of African
growth on African mortality come from the
author’s econometric estimates, which are
available upon request A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
97
I
would like to make three points in my remarks.
i. First, why multilateralism and maintaining
the global economic order is still key, given
all the challenges we have.
ii. Second, what is the kind of multilateralism
and global economic order we need to
have?
iii. And �nally, what it means for the institutions
and regional multilateral institutions and
processes, including regional institutions
and processes that we have now.
So, let me start with why multilateralism and
maintaining the global economic order is
important. It’s very clear from all that we discussed
yesterday that the global economic order is at risk
of becoming frayed and dysfunctional because of
many reasons. One is the decline in US leadership
and the shift in hegemonic interest and domestic
constituents. Populism’s rise was mentioned
yesterday, which makes the US less willing or
capable of leading the public good outcome of
the previous global economic order of an open
and rules-based economic order.
You have the China-US competition and
geopolitical tensions leading to new divisions.
Yesterday, we had several presentations showing
the structural changes in the world. We are moving
from a unipolar to a multipolar world of economic
power with a clear emergence of developing
economies. This is why the discussion about the
Global South in the G20 year of India becomes
very relevant. And given this threat and the global
challenges we face, we need multilateralism more
than ever.
Multilateralism, I would argue, is the prerequisite
to managing the transition from a unipolar
world to a stable multipolar new order, not a US
block of friends or allies, not a China block, and
neither a Global South block. It has to be a block
pursuing agreed, shared principles and rules. We
still need rules and norms to stop free riding and
bad behavior. The whole global economic order
and rules-based system were intended to stop
or constrain bad behavior by members and the
leader. Now, we are seeing the rise of protectionism
and WTO rules like non-discrimination being
violated, leading to beggar-thy-neighbor policies.
Yesterday, we had many comments on the US
industrial policy and how it breaks the WTO rules,
leading to provoking action by others.
So, multilateralism is also needed to address the
global common challenges, whether it’s climate,
health, or the slow growth trajectory that’s
hurting developing countries. I would argue that
trade and investment are still crucial parts of that
growth story.
Secondly, what kind of global economic order do
we want? We want one that continues to deliver
not just growth but sustainable, resilient, and
inclusive development. There’s wide agreement
on that. And peace, or as it was originally termed
in global public goods, was growth and peace.
But it is about sustainable development. It’s about
being resilient enough to manage global risks and
disruptive technological innovations. We heard
a lot about that yesterday: climate, technology,
and I would add the debt crisis, energy, and food
SPEAKER 2
MARI PANGESTU A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
98
security. And �nally, it should be cohesive enough
to manage systemic crises. We learned a lot about
that during the pandemic and now as we face the
climate crisis.
Thirdly, therefore what kind of multilateralism
and multilateral institutions are going to be �t for
purpose given the current context. We have to
take the current situation as a given, which is the
intermix between security concerns, geopolitics,
and the ongoing US-China geopolitics that aren’t
going away anytime soon, and the social and
political conditions facing countries. This is the
starting point and the answer is a combination
of maintaining multilateralism, open regionalism,
and international openness, which are essential to
secure sustainable development and peace. This
is the main outcomes we would like to achieve.
Now, let’s have a discussion about what that
means moving forward. What does it mean for
the governance of different multilateral and
regional institutions? I think multilateralism and
international cooperation to address shared
global challenges relative to traditional and non-
traditional security challenges are going to be
important. There’s an opportunity to cooperate
based on shared interests. I’m an optimist.
Many are very pessimistic about multilateralism,
but I’m a diehard multilateralist and probably
an optimistic diehard multilateralist. I look at
the glass as half full. I believe that while many
things didn’t work in the multilateral and global
economic order, it’s not about �nding a new order
or overhauling the institutions. It’s about building
on, strengthening and evolving the existing
institutions and processes.
It is also about international cooperation and
support to ensure concerted unilateralism – or
how countries act nationally. If you look at what’s
happened in the last eight decades, countries
do sign on to the WTO agreement, but what
happens is countries are the ones that take action.
Countries signed up to Paris climate agreement,
but again action happens at the country level.
Some agreements are binding, like the WTO with
clear commitments and sanctions for not ful�lling
as well as at least in the recent past clear dispute
settlement procedures. Some are not binding
such as the Paris agreement. To achieve unilateral
and concerted actions, international cooperation,
international discussion and dialogue, and the
conversation to agree on what we need to do and
how we need to get there are key. Con�dence to
act comes from others doing it. Con�dence comes
from capacity building. Con�dence comes from
not just the promise and pledges of resources but
real resources and support coming through if you
did what you agreed to do.
The other dimension, which we didn’t really talk
about but touched on it a little bit yesterday, is
that in the new multilateralism is not just state to
state, but has to include the private sector. The
technology story was very clearly a private sector
issue, and self-governance also in the private
sector and how to incorporate society.
How should we then transition to a multipolar
world, without US leadership, and accounting
for geopolitics? It should be about the shared
interests of the Global South and the middle
powers who should not want to be bifurcated
by the US-China con�ict. Their shared interest
is still about open trade and investment and
about navigating and managing the bifurcation
between the US and China. Yesterday, there
were powerful presentations about the costs
of decoupling. If you had total decoupling, the
cost is very high. And guess who pays? It’s the
developing countries that will pay for what
emerges. Whether it is decoupling or de-risking,
economic instruments are being used to address
security and dependence on China concerns.
Whilst recognising the valid security concerns,
how should the policies and instruments be
managed that can minimise the distortions and
damage that it can cause?
The �rst best is not to have all the intermix
between economics, security and technology, but
let’s face it, the reality is there and there are valid
concerns. So, second best, how do we minimise
the damage?
There other important shared interest of middle
powers and the Global South, is the green
transition. Yesterday’s discussion was a powerful
endorsement for the green transition coming
from developing countries. That’s the big shift
in the last few years where developing countries
were saying no, that climate is a luxury and we
don’t have the resources to focus on climate, so
we need to focus on growth. Now the whole
debate has totally changed. Having been very
involved in this in the last three years, we do see
developing countries recognising that climate
and development are not trade-offs, that one can
achieve development whilst addressing climate
and in fact not addressing climate will come at the
cost of development. But developing countries A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
99
are asking, ‘Okay, we now see that we need to
address climate, otherwise we will not develop,
but we need resources, we need technology, and
so on.’
Given these shared interests, how should the
international institutions and governance be
reformed, evolve, and strengthened and continue
to agree on existing and renewed principles,
norms, and standards. It will have to be a multi-
pronged approach building on various existing
systems and processes, not just one or the other.
Let me give you the example in international
trade, because that’s my area of knowledge and
expertise.
The resilience of global value chains, facilitating
investment, unlocking ICT, and pushing back on
protectionism, WTO reforms, including dispute
resolution, were key in the G20 agenda. India
would be hurt in its green transition if it’s not
integrated with the world economy. I’m quoting
from the statements of Indian of�cials from
yesterday.
So, what does it mean for the processes and
the institutions that we have? I will start with
the G20. The G20, hopefully, can overcome
the challenges. Since 2016, the G20 has been
somewhat absorbed in communique language.
During the Trump years, it was about removing
everything that said ‘multilateral.’ Now we know
paragraphs three and four are about war. It’s
unfortunate, but hopefully, we can rise above that
and delve into the substance. The G20 is about
agreeing and demonstrating the political will of
what needs to be done collectively, what are the
principles, norms, and standards. And then it’s
taken elsewhere to negotiate, whether it’s the
WTO or other fora, or the G20 acts on it, like the
concerted �scal stimulus in response to the global
�nancial crisis. So, I do think the G20, especially
taking into account the concerns of developing
countries, continues to be key.
How do you give the Global South a voice? Let
me share three thoughts. The Global South can
be at the table, and some of them are at the table
in the G20, or they could be represented at the
table. For instance, Indonesia represents ASEAN,
and we always get ASEAN to be invited as an
observer, even if you’re not at the table. One can
think of other groups that can be represented in
a similar way. These are just some ideas, other
than G21. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
100
Let me now focus on trade brie�y and what a
multi-pronged strategy would look like. First
multilaterally, the focus is on WTO reforms and
this has been on the G20 agenda since the Osaka
G20. One priority is to address the dispute
settlement and appellate body issue, because this
is an important issue for the Global South – where
small and big countries have the same right to
a fair, open and rules-based trading system. In
terms of addressing other issues, in parallel
plurilateral initiatives or what we call ‘Club of
Clubs’ initiatives should also be continued to be
galvanised. One example is what’s called MPIA,
multi-party interim appeal arbitration, which
involves 53 countries, including China, Japan, the
EU, and Australia. It’s essentially mirroring the
appeal process of the dispute settlement process,
but not within the WTO. So, it’s about keeping
the bicycle moving in terms of promoting open,
rules-based, inclusive trade. Another area that
I mentioned yesterday is about the use of the
security clause under GATT Article XXI. How
can we codify the grounds for using security in
restricting trade? This will likely spill over into
de�ning the criticality of goods for which you
can impose trade restrictions or temporary bans.
Finally, outside of the WTO, the ‘club of clubs’ can
be thematic, like what’s happening with services,
e-commerce, and digital trade. Even if the US isn’t
participating, progress can still be made.
I would also strongly advocate for regional trade
agreements. As mentioned yesterday, deep
regional trade agreements can �ll the gaps left
by the multilateral system. These agreements can
encompass competition policy, especially given
the rise of large technology companies, as well
as services, labour, and environmental standards.
Trade and climate is another dimension that can
be addressed both multilaterally and regionally.
Many Asian agreements emphasise partnerships,
such as the Regional Comprehensive Partnership
Agreements, because they focus on capacity
building and accommodating varying levels of
development. True capacity building, combined
with �nancial and technological support, is
essential.
My �nal call to action is to revisit a paragraph we
discussed a couple of years ago. It essentially
states that G20 countries support a rules-based
multilateral trading system but also endorse
regional or alternative pathways to achieve
this in an open and inclusive manner. It’s about
open regionalism, ensuring that even plurilateral
agreements are inclusive, allowing observers who
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A
s the leader of the G20 Group of
Nations, in this ongoing year, India
tried to share its wisdom with the
rest of the world. So, let me begin
my presentation also with one of
India’s ancient beliefs about what we today
call as global commons. Our ancient wisdom
always stated that the creation was made of �ve
elements. We called them in Sanskrit as Prithvi/
Bhudevi (Sanskrit: पृ��, Earth), Apas/Varuna/Jala
(Sanskrit: आपः, Water), Agni (Sanskrit: अ��, Fire),
Vayu (Sanskrit: वायु:, Air), Akasha/Dyaus (Sanskrit:
आकाश, Space/Atmosphere/Ether/Sky). It meant
our earth, our oceans, our energy sources, our
environment, and our space and outer space and
cyberspace. We believed that these �ve elements
constitute the entire creation, and hence, they
should be out of bounds for sovereign national
governance. This has been the ancient thinking
of this country. What we are calling as global
commons today have always been held for the
bene�t of the entire humanity.
So, when we created the global multilateral
institutions, the most successful ones after the
Second World War, in the form of the United
Nations and its many allied organisations, the
original focus should have been about these �ve
elements. It has been, I’m not denying that, but
the effort has not been so very successful for
various reasons. One reason one can attribute
to is probably the bipolar Cold War politics in
the initial three to four decades. Subsequently,
in the last two to three decades, what we see
is the general perception, that the multilateral
institutions that we created are not able to deliver
what is expected on issues like global commons.
In fact, on many issues. But since our focus is on
global commons and that they’re unable to deliver
fully. Hence, India also maintained this position
that probably the time has come for us to now
think about a complete overhaul or restructuring
of these institutions.
One important reason, I believe, or an argument
in favour of restructuring of these multilateral
institutions that we created, is because from a
bipolar polity, we moved to a multipolar setup
today. Today, I would probably go one step further
to say that we are not even a multipolar world.
We are a heteropolar world. Today, multipolarity
as a reality needs to be acknowledged because
there is no one or two countries that would
�nally determine the destiny of all the countries
of the world. There are many powerful countries
emerging in different parts of the world. Many
mini-laterals have emerged. We are a part of SCO,
Shanghai Cooperation Organisation. We are a
part of BRICS. There is ASEAN. There are other
groupings. These mini-laterals also have emerged
as important poles in the world.
Besides this multipolarity and emergence of
mini-laterals, we today see the rise of big tech,
rise of multinational economic corporations,
rise of global NGOs, and of course, there are
organisations, there are terror groups, there are
religious organisations. All of them defy national
boundaries. For them, national sovereignty means
nothing.
SPEAKER 3
RAM MADHAV A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
102
Our internet is no longer easy to control. You
have to be a China to control the internet. So,
we are living in a totally different kind of world
order, a heteropolar world order. This has to be
acknowledged as a reality today.
I see some resistance to this idea. No, we are
still led by so and so. So here, the question of
how do you, when it’s a multipolar world, attend
to the aspirations of all the different countries
in the world? Is it up to the United Nations
to be able to do that, or do we need to have a
totally different approach to this whole issue of
global governance? That is an important issue
to take up for discussion. That is where India’s
championing of the cause of the Global South
becomes important. This Global South, as we all
know, consists of countries which are developing
in nature. We used to call them the developing
world. We are calling it the Global South now, but
80% of the world’s population, that means the
so-called global commons, will be positively and
negatively affected by these countries.
Majority of these countries, for example, countries
in Africa, are Small Island Developing States
(SIDS). They depend on what we call the global
commons for their survival. You cannot deny them
access to them. So, the challenge is, how do you
lead this whole Global South and its aspirations
to grow?
Here, India wants to take the lead. Essentially,
the Global South and the mini-laterals that have
emerged in many parts of the world have to be
accommodated in any new structure that we
build for future global governance. Any future
United Nations should not be just a body of 195 or
197 countries alone. It should be able to represent
the aspirations of this heteropolar world order. So
that is where probably India’s leadership of the
Global South will lead us.
I will just leave three issues before you for
consideration when we try to rebuild the
multipolar order, the heteropolar order for our
future multilateralism. Number one, as I said, how
can we make these heteropolar components a
part of our future multilateralism? Second, the
Global South is a developing world. As I said,
it depends on the so-called global commons,
especially the oceans, the energy sources, and the
earth for its survival. Now, suddenly we cannot
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103
have to reduce emissions. Of course, they all have
to come onboard and do their bit, but is it at the
cost of their aspirations to develop? Do we want
those countries to remain underdeveloped, not
developing? Because I know about India, for the
last three decades, we have been called only as
a developing country. It has been almost three
decades now. Our Prime Minister wants India to
be called a developed country 20 years from now.
But that aspiration of the countries to become
developed countries requires dependence on
the very same resources which we’re calling as
global commons. How do we compensate if we
want them to reduce their dependence on these
commons? How do we compensate? Are we
willing? Are those who have developed, who have
progressed, willing to shell out some pounds,
some dollars for that purpose?
Last, but I consider it as the most important,
is: how do we bring social sciences and natural
sciences together? When I say social sciences,
I mean our economics, our education, our
technology, our politics; they take a particular
direction. But natural sciences have a different
focus. How do we bring these two together?
Every economic activity that we undertake from
this point, how is it going to be aligned with our
nature, our environment, our global commons? In
the age of AI, how do we marry these two things?
This is going to be a big question before all of us
in the next 20 to 30 years, I believe.
So, friends, I will end by saying that the need
for a new, renewed, or revised multilateralism
has been emphasised by all of us. But that new
multilateralism cannot be just that of a few
countries of the world led by someone. It has to
take into account the current hetero reality and
aspirations of the Global South. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
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I
f we want to discuss or debate the future
of multilateralism, we need to delve into
developments that happened in the post-
WTO period. Two parallel movements
followed the post-WTO period. One was
the expansion of multilateralism and second
was simultaneous explosive growth in PTAs—
you call them free trade agreements, regional
trading agreements, but I �nd them neither
free nor regional. Therefore, I’m using the term
preferential trading agreements. Up to 2007,
when the global �nancial crisis happened, these
two movements just went in the same direction.
But after 2008, the multilateralism started
weakening, fragmenting, but excitement among
nations about preferential trading agreements
remained strong, and their growth continues.
I feel based on this experience, we need to clearly
draw out what the core areas for multilateralism
are, which cannot be dealt with by PTAs. We
know it: if we want to address the effect of
subsidies in �sheries, we know it cannot be
addressed through a PTA or a regional trading
agreement. We have to turn to multilateralism.
I feel it is very important to understand whether
the growth of PTAs has in some way adversely
affected multilateralism. The old debate: wether
PTAs or RTAs are building blocks or stumbling
blocks for multilateralism. I feel we need to draw
some lessons, and what are the core areas for
multilateralism that will help in building a strong
case in favor of multilateralism.
Then secondly, yesterday and also today some
references were made toward a shift from
globalisation to de-globalisation, and the slowing
down and fragmentation in multilateralism. I feel
that we need a little more nuance in this because
when we talk of multilateralism broadly, the
issues can be divided into three categories. One
category includes issues related to economy,
trade, banking, �scal matters, and the like. The
second is issues which are related to humanitarian
aspects: health, nutrition, food security. And the
third category includes issues which relate to the
survival of people and planets such as climate
change, sustainability, environment, biodiversity.
I feel the presentation which was made yesterday
on fragmentation of multilateralism, weakening
of multilateralism, applies in my mind to the
issues in category one.
As far as issues in category two and three are
concerned, I �nd that the global mechanisms
to address them are getting stronger. SDG,
whatever it is, followed after MDGs in 2015.
Even with SDG limitations, we are discussing
food system transformations and there’s a lot of
interest in decarbonisation and how we do it.
So, I think we should not sweep it with a
broad brush that multilateralism everywhere is
becoming fragmented or weakened. Yes, in the
area of trade and economy that is happening.
But in the other areas, this trend toward
multilateralism, I �nd, is rising. Second, diagnosis
of underlying factors for deglobalisation or
slowing down or fragmentation of multilateralism
is very important. To what extent it was because
of slowing down of growth in global economy, to
what extent it is due to policy decisions taken by
EXPERT COMMENT
RAMESH CHAND A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
105
different countries? That distinction is very, very
important.
I looked at some of the data, like if we look at
trade intensity or the share of the ratio of export
to GDP since World War II till 2007, it has been
increasing and the peak was reached at 67%
in 2007. Then the world faced global �nancial
crisis. The trade intensity dropped suddenly
from 67% to 52%, and afterward settled around
54%. We did not see any decline in global trade
to GDP ratio in the subsequent 15-years period,
but it kept �uctuating around 54%. So, is it that
after the global �nancial crisis, the growth in
the global economy did not recover, and that is
the reason for decline in trade intensity, or, the
reasons are more policy induced, like Brexit,
trade restrictions, etc.? I think there is a need for
strong empirical work to understand this change.
Also, I saw one IMF study which says that the
effect of mild fragmentation on global economy
will be a reduction in GDP by 0.2%. But in case
of severe fragmentation, it can go up to 7%.
But if you take into account the other channels
through which the effects percolate down, then
it becomes much more serious.
Another issue that I want to share is that many
developing countries agreed to be members of
WTO despite a lot of opposition at the domestic
level. But after some time, frustration started
building with the feeling that the playing �eld
was not level. As developing countries were not
able were not able to have a say in the WTO, the
stalemate began and took its toll. I feel this also
needs to be factored in to �nd out whether the
stalemate in the WTO is one of the reasons for
the reduced interest in multilateralism. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
106
I will quickly make two more points. One big
change, which is happening in the global
economy, and from there I want to link it to my
area of interest, that is agriculture. There’s this
structural change in the economy which was
happening as per the Arthur Lewis hypothesis,
that as economies grow, the share of agriculture
in GDP declines. That trend stopped after
2005. Between early 1970s to 2005, the share
of agriculture in the global GDP declined
from 10% to 3.2%. But after 2005, the share of
agriculture, rather than declining, increased by
33%, from 3.2% it went up to 4.4%. I feel this
has very serious implications for development
policy, for trade, even for multilateralism, even
for climate change, and other such issues. I keep
discussing these things with colleagues in NITI,
and others, to reimagine agriculture and its role
in development.
The changing nature of structural change in
the output of global economy has serious
implications. Even more serious is the impact
on employment because manufacturing growth
has slowed down, and manufacturing is going
for more capital-intensive production. The
labour shift from agriculture to non-agriculture
has either halted or it is very slow, and this is a
matter of concern.
Somebody mentioned about G20 having so
many issues. I made a presentation from Indian
side in the meeting of G20 Agricultural Ministers
in Hyderabad, where we pointed out that the
most serious issues in the AgriFood sector is
that after 2015, hunger and undernutrition in
the world has started increasing. The reversal
in hunger and nutrition improvement started
around 2010-2012, �rst in Africa, then it spread
to South America, and of late, it has hit South
Asia also. And what is more disturbing is that
the hunger and undernutrition have started
deteriorating despite the fact that agricultural
growth is intact and per capita food production
is rising!
So, these things, I think, need to be taken into
consideration. They are vital. I mention these
things not only for the sake of agriculture, but
also for the sake of other issues like technology
transfer from developed to developing
countries, from north to south, affecting costs of
production, and many other such factors.
I think there is another issue worth considering.
Shree Ram Madhav ji was alluding to global
commons, which are existing entities, like our
oceans, forests, and biodiversity. These entities
are here, and they come with a set of livelihood
and sustainability issues related to them. That
is one set of issues. However, I think in this
particular forum, we are more concerned about
global commons that we aim to create, like
initiatives for decarbonisation and sustainability. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
107 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
108
July 28-29, 2023
Hotel ITC Maurya, New Delhi, India
FRANÇOIS
BOURGUIGNON
Chair, GDN Board; Professor
Emeritus, Paris School of
Economics, former Chief
Economist, World Bank (France)
HAROON BHORAT
Professor, University of
Cape Town,
(South Africa)
SANTIAGO LEVY
Non-Resident Senior Fellow,
Brookings Institution
(Mexico)
VINOD KUMAR PAUL
Member, NITI Aayog
(India)
SURJIT BHALLA
Former Executive Director for
India, Sri Lanka, Bangladesh and
Bhutan, IMF (India)
SESSION 6
ADJUSTMENT, RESILIENCE AND
INCLUSION IN AN UNCERTAIN
WORLD A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
109
SESSION CHAIR
I
believe that the evolution of global inequality
over the recent past is a good illustration
of the various themes we want to handle in
this session. You may know that a potent
change took place in global inequality of
living standards over the last two decades or so.
After having risen almost continuously over the
last two centuries and reached a very high level,
much above the most egalitarian countries in the
world, a reversal took place at the turn of the
millennium, and global inequality actually began
to fall at a very fast speed. In a few years, it erased
almost a complete century of increase in history.
To some extent, some people considered this a
kind of historical turn in the world.
Initially, this development was driven by the
performance of big emerging countries, China in
the �rst place, and then quickly India. But at the
turn of the century, really all developing countries
were involved in this process of catching up over
the most advanced countries.
Again, this was a huge change taking place almost
in the global order. And this seemed to be rather
robust in the sense that even the Great Recession
in 2008-2009 was not able to stop this very
favourable trend. Now, I believe that today some
uncertainty has built up due to various events.
Certainly, the fact that commodity prices have fallen
around 2015 and have had a kind of haphazard
behaviour since then, the pandemic, certainly the
global disorders, and in particular the Ukraine war,
but more and more the effects of global warming.
And the fact that the policies to mitigate and to
adapt to global warming are progressively, or will
progressively, be implemented.
This is really creating uncertainty about the
process or this new trend in global inequality
I was describing, focusing on the big emerging
countries like China, India, and others, which
may continue to overperform with respect to
advanced countries. From that point of view,
the process of equalisation may continue, even
though it’s not clear today whether China, being
much above the world mean standard of living,
is still contributing to less inequality or is already
contributing to more inequality.
But what is really of concern is the fact that
low-income countries have not been able lately,
practically since over the last eight years or
so, to catch up with advanced countries. They
are lagging behind advanced countries and of
course behind the mean and what is going on in
dynamic emerging countries. This is a source of
concern because it means we cannot say there
is full inclusion. There is a problem with the poor
countries in the world, which may not be able
to continue the process of development they
experienced at the beginning of this century.
This is really a problem because it may mean that
some exclusion is building up if we are not able to
take the right decisions at the national, and most
importantly, at the international level, to stop this
process and ensure that everybody remains in
the group. That poor countries keep catching up
with the rest of the world is crucial.
So, this is a source of concern. Another one,
of course, is the fact that the various shocks I
mentioned earlier will also affect within-country
inequality. We know that in many countries of the
world, inequality tended to increase substantially
FRANÇOIS BOURGUIGNON A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
110
over the last decades of the past century.
Fortunately, we observed at the beginning of
this century a kind of stabilisation, and in several
developing countries, even a fall in the degree of
inequality. However, it is certainly the case that
today inequality is much higher in most countries
than it was in the eighties or the nineties.
I’m talking about living standard inequality. Now,
in some cases it would be consumption inequality
because countries are measuring consumption.
And in some other cases, it would be income
inequality. But we know that the trends in most
countries will be more or less parallel. I don’t think
it makes a big difference whether we are referring
to consumption or income.
This uncertainty building up in the world is also
making it less unlikely that there will be another
increase in inequality in various countries of the
world. These shocks are, most of them, would
push toward more inequality. And because the
level of inequality is already very high, then all the
risks linked to the lack of inclusion, may become
even more serious in the future than they are
today. And they’re already, as we have seen, very
serious today.
So, because of that, adjusting to those shocks,
developing resilience to these shocks, and making
sure that inclusion is a goal, which is very explicitly
stated in national and international policies, is of
the �rst importance. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
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SPEAKER 1
I
would like to share with you a Latin American
perspective on social protection in middle-
income countries. The basic idea is to point
out some lessons that may be useful for
other regions of the world, both positive and
negative.
Growth is often accompanied by increasing
income inequalities and demands for health care.
As the population ages, there is a growing need
to take care of the elderly and avoid old age
poverty. These demands become politically more
salient as countries urbanise. Designing effective
social protection systems is a real challenge
because there is a need to balance budgetary
cost, redistribution objectives, and ef�ciency
objectives. This challenge is more complex in
countries with large informal employment.
Let me give you an overview of the structure
of social protection in Latin America.
1
However,
before I do this, a little history is useful. Social
protection systems started in Latin America back
in the middle of the last century. We imported
from Europe the Bismarckian model: workers
were going to get social protection through wage
employment, and it was going to take the form
of a bundled package of bene�ts. The bundled
word is very important because workers were
going to get access to health, disability, death
insurance, and retirement pensions at the same
time. This bundle was going to be �nanced from
a wage-based tax earmarked for these bene�ts.
In addition, workers would be protected from the
loss of employment through dismissal regulations
1 For a general discussion of the issues raised in this note, and references to country-speci�c evidence, see Levy, S. and Cruces,
G. (2021). “Time for a New Course: An Essay on Social Protection and Growth in Latin America” United Nations Development
Program, Latin American and Caribbean Bureau, Working Paper 24, New York
and, when employed, through minimum wages,
sometimes very high relative to countries’ wage
distribution.
This model, 80 years later, covers less than half of
the labour force of Latin America. After the debt
crisis of the 1980s, and as growth resumed in
the region, there were pressures to extend social
protection to those that were excluded. Countries
in the region responded by expanding social
protection, but they did not reform the Bismarckian
model. What they did is to add on, in a fairly ad
hoc manner, a set of programs that are somewhat
con�ated, but is important to separate. One set
of programs were targeted income transfers, like
Progresa in Mexico and Bolsa Familia in Brazil,
although there are many others in Latin America.
A second set of programs were non-contributory
insurance programs, which have not received as
much attention as they should have but were a
central part of the response.
The result is a structure of social protection
constructed around workers’ status in the labour
market. A useful way to think about this structure
is to visualise a two-by-two matrix. The columns
refer to the provision of insurance against
risks: disability, death, illness, longevity, loss of
employment, and so on. The rows refer to income
redistribution. The columns divide the population
in two groups: formal, who have access to the
Bismarckian model, and the rest: those informally
employed, unemployed, or out of the labour
force, who have access to a set of unbundled
packages of services that, on an ad hoc, scheme-
SANTIAGO LEVY A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
112
by-scheme basis, were being created through
non-contributory pensions, health, day-care and
similar programs which, very importantly, are
paid from general revenues. So, if you are in the
right column, your bene�ts are paid from general
taxation. If you are in the left column, bene�ts are
paid by a wage tax that has to be internalised in
the contract between the �rm and the worker.
The rows of the two-by-two matrix refer to
incomes. In the upper row we have the non-poor
population and in the lower one those that are
poor. Targeted income transfer programs have
nothing to do with the columns; they have to do
with the rows. Conditional cash transfer programs
are for the population in the second row, i.e.,
for the poor. These programs are not providing
insurance; they are providing income transfers,
which is very different.
With variations, this structure is present all-over
Latin America, although there are exceptions. A
notable one refers to health insurance in Brazil.
There, health services are completely independent
of workers’ income or formal-informal status, and
this is a very good thing. It is the only country
in the region that has done this. In every other
country in Latin America, the type of health
services that you get depend on whether you are
in the right or in the left column of the two-by-two
matrix mentioned above. Importantly, note that
health services are not being provided through
conditional cash transfer programs. These
programs provide income; health services, and
pensions and disability insurance, are provided
through social insurance.
In many discussions about social protection,
informality and poverty are con�ated, but they
are two very different things. It is true that most
poor workers are informal. It is not true that most
informal workers are poor. If you go back to the
two-by-two matrix mentioned before, there are
more workers that are informal but not poor,
relative to the number of workers that are both
informal and poor.
Governments in Latin America spend on
conditional cash transfer programs approximately
half a percent of GDP. These programs have
received a huge amount of attention because
there is an abundant literature on their impacts
on health, nutrition and schooling through very
careful econometric analysis using difference-
in-difference or similar techniques. This has
been all to the good because we have learned a
huge amount from these studies. But, that said,
non-contributory social insurance programs
are actually much bigger in terms of both the
population that they cover and the budgetary
effort that is devoted to them. Some countries
can spend between two to three, up to �ve
percent of GDP.
The segmentation of insurance is not a very good
scheme because workers transit between the
columns, particularly in urban areas, that is, they
move between different types of employment
throughout their life cycle. This implies that
sometimes they receive protection through the
Bismarckian scheme and sometimes through
non-contributory programs.
What is the result of this overall architecture? I
refer here not to any individual program, but to the
coexistence of the Bismarckian model with non-
contributory insurance programs and conditional
cash and other transfer programs. First, protection
against risk is erratic because if you change labour
status from formal to informal, you may or may
not be covered for disability insurance, death,
or employment insurance. Second, contributory
pensions do not work for the majority of workers.
They save for a pension, but many do not get one
when they retire because they do not accumulate
suf�cient numbers of weeks in formality to be
able to qualify.
Third, it is true that poverty programs, particularly
CCTs, have raised the human capital of the poor.
We have a lot of econometric evidence about the
impact of Bolsa Familia, Familias en Accion in
Colombia, and Progresa in Mexico. This evidence
suggests the health status of the poor, their
nutrition, and their schooling has increased.
However, the increases in their human capital are
not translating into better jobs because despite
their increased human capital, they are still being
informally employed.
Fourth, the overall scheme changes little the
market distribution of income from the after-
taxes and transfer distribution of income. In most
OECD countries, the Gini coef�cient of market
income is something like 0.47-0.46, but it is
brought down to about 0.3 because taxes and
transfers play a very redistributive role. In Latin
America, the Gini coef�cient of market income is
slightly higher than the OECD, but not that much
higher. The real tragedy is that after taxes and
transfers, the change in the Gini coef�cient is very
small, which basically says that the ability of this A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
113
whole apparatus, not any individual program, to
actually change the market distribution into the
post-market distribution is very low. That is the
ef�cacy side of structure.
On the ef�ciency side, what you are actually
doing is, de facto, taxing formality. This is so
because the costs of the Bismarckian scheme
have to be internalised in the contract between
the �rm and the worker and, for many reasons,
the bene�ts are less than the costs. My guess is
that part of the problem with wage employment
in Latin America is that if it is being taxed implicitly
through the structure of social protection. In fact,
we have a lot of econometric evidence that this in
fact happens. And at the same time, informality
is being subsidised because governments are
providing social protection paid from general
revenues, conditional not on being poor, but on
being informal.
The same person with the same human capital and
abilities is being told: If you have an informal job,
your health insurance and maybe your pension
will be paid from general revenues. But if you get
a formal job, now you and the �rm that hires you
have to pay for those bene�ts. Taxing informality
and subsidising informality is not really very good
from the point of view of productivity.
What happened in Latin America over the
last three decades? There was a large effort to
increase public spending in social protection, a
re�ection of the fact that governments have been
deeply concerned about the issue of inequality
and poverty. Broadly, for the region as a whole,
spending went from seven to about 15% of GDP
over the course of the last three decades. That is a
signi�cant effort. However, despite this effort, we
continue to be one of the most unequal regions
of the world. Latin America did reduce poverty.
But relative to the region’s income per capita,
poverty is still high. Finally, and although there
are many reasons for this, the formal-informal
segmentation of workers and �rms is one of the
reasons (of course, not the only one) behind the
stagnation of total factor productivity over the
last three decades.
Let me conclude. Latin America pioneered
conditional cash transfer programs, but it was
not noticed suf�ciently that at the same time
the region was developing a second-tier system
of parallel social insurance. These programs
developed in an uncoordinated way, scheme by
scheme, as governments responded to social
needs by creating a pension programme here, a
health programme there, or a day-care programme
over there, for various groups excluded from the
Bismarckian regime.
This situation has two major problems: One, a dual
system of social insurance constructed around
worker status in the labour market, a status that
�uctuates depending on shocks in demand,
technological changes, and idiosyncratic factors.
Second, the fact that sometimes insurance
and income transfers are con�ated. This is an
important point to keep in mind when we talk
about universal basic income and all that. It is
not the same to provide income as to provide
insurance, particularly if you want to protect
people against catastrophic expenditures.
As it stands today, the architecture of social
protection places Latin American governments
in a fairly dif�cult dilemma. From the social
inclusion point of view, you want to increase
bene�ts to informal workers so that they have the
same bene�ts as formal ones. From the ef�ciency
point of view, you do not want to keep taxing the
formal sector of the economy to subsidise the
informal sector because it is not a good idea from
the point of view of productivity. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
114
Two more points: Yesterday, there was some
discussion about agility and �exibility. This
architecture does not respond well to the dynamics
of the labour market. It is constructed around the
concept of dependent employment, which is the
cornerstone of the original Bismarckian model.
More than a hundred years after Bismarck, and
more than 80 years after this was imported to Latin
America, it covers less than half of the population.
If we think about more dynamic economies in
which there is rapid technical change and people
change jobs often over their lifetime, this kind of
structure will not work. Middle-income countries
from other regions can hopefully learn from both
the positive and negative lessons from the Latin
American experience and internalise them.
To conclude, as countries develop, they need a
vision of social protection, not an accumulation
of schemes. There are three key messages from
Latin America. First, do not con�ate income
transfers with social insurance; they have two
separate objectives. Second, stay away from
constructing the core of social protection around
people’s status in the labour market. Build it
outside the labour market, except for those issues
that are directly associated with the behaviour of
�rms, like work risk insurance or unemployment.
And third, keep in mind that social inclusion is not
achieved through a collection of disconnected
social protection programs. Social inclusion
requires that all members of society contribute
to and bene�t from the same social institutions. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
115
SPEAKER 2
I
f we think about the region and the big picture
economic challenges in sub-Saharan Africa, the
notion of the relationship between growth and
poverty in a region where the majority of the
world’s poor lives ultimately has to be based
on the discussion about Africa’s jobs challenge.
And if you’re talking about labour demand or a jobs
challenge, you have to be thinking about structural
transformation. I’ll then switch to what I think is a
possible roadmap for structural transformation
by looking at economic complexity.
Now, these data are well known. But in many ways,
when one looks at the trends by three different
poverty lines, I’ve taken the black line with the
white dots to represent Sub-Saharan Africa. In
this particular case, there is a decline. The �rst
difference does show a decline in poverty levels
for Sub-Saharan Africa relative to other regions
of the world. But what’s very clear is that the
rate of reduction is much lower than the rest
of the world. That fact means ultimately that
Africa’s share of the world’s poor has risen over
time. I think that’s a really important background
context. These numbers are very well known, but
perhaps less well known are the growth poverty
elasticities by region.
So, these are updates from work currently
underway within the Africa region, and I’m doing
some work with the World Bank team there. It’s
very clear if you take the median elasticity of
poverty reduction to growth. If you think of a one
percentage increase in economic growth, what
is the reduction in poverty levels? You want that
number, that elasticity, to be really high. For sub-
Saharan Africa, which is circled on the right-hand
side, it’s the lowest of all the regions of the world.
The growth-poverty nexus is a weak one in sub-
Saharan Africa. The ability to convert economic
growth to poverty reduction is very weak.
The last bullet is a really important one. The notion
that this is not necessarily an Africa issue as much
as it is a low-income country or income level issue.
So, in other words, if you took a sample of low-
income countries or countries with similar GDPs
per capita, you’d get similar elasticities. I think
that’s really important to keep in mind. There
isn’t an Africa dummy variable sitting there that’s
signi�cant. Be that as it may, this is a region that
at least I and others live in. So, it does give you
some context for thinking about policy in terms
of a region rather than at income levels.
For me, as a micro-econometrician, the notion of
jobs, the notion of where employment will arise,
is a really critical lifeblood of any economy trying
to move through stages of development. Some of
the work I’ve done takes the very simple question
looking at changes and projections in the labour
force, or the working age population. Here I’ve
taken the youth, and these are based on the
UN population projections. The really important
numbers are sitting in the last row. Currently, the
youth population of the globe, Africa constitutes
18%, or 19%, of the youth on the planet. By 2100,
that number right next to it is going to be 46%.
So close to half of the world’s youth will sit in this
continent. If that doesn’t represent the core of a
global challenge, a jobs challenge, then I’m not
sure what does.
HAROON BHORAT A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
116
So, in other words, if you think about resilience,
if you’re thinking about inclusion, thinking about
young people or the population of working age,
if you look at the numbers to the right, 15% of
the population of working age are in Africa. At
the moment, that’s going to go up to 42%. The
majority of the world’s youth and the working
age population will actually reside in sub-Saharan
Africa. What that means, yes, the macro solution
is to say this is a demographic opportunity, but it’s
a jobs challenge. It’s the statistical mirror image.
I think that’s really important to keep in mind. I
do though want to counter against an Africa as
homogenous challenge.
So yes, these numbers are true, but if we break
it down by country, two-thirds of the youth
population right over that growth period that I
had to 2100 are accounted for by 10 countries,
and you see them there. The usual suspects are
there: Nigeria, of course. Some of you may know
this, but DRC, Tanzania, Angola, and Niger are
the obvious countries just because they’re large
population economies that are dominant.
Ethiopia is there, but in essence, in many ways,
and it does suggest that this is an elephant that
you can look at in terms of bite sizes, if I could put
it that way. So in many ways, the jobs challenge,
in pure scale terms, is a 10-country issue on the
continent. And I think that then allows one to look
at country policies.
If I dig just a little bit deeper about—yes, we can
talk in general terms about the jobs challenge
or inclusion in terms of creating jobs, let me just
talk about the types of jobs and the employment
outcomes that you’re seeing in Sub-Saharan
Africa.
So, what’s very clear is that for Africa, employment
outcomes are incredibly weak. Africa accounts
for 14% of the world’s labour force but only 8% of
the wage employed. So, if you’re thinking about
inclusion, you better be thinking about wage
employment. Yes, second order, I understand,
would be informality, but in many ways, wage
employment is an indicator for a good job or at
least inclusion.
The thing that we often have to orientate ourselves
towards is that the majority or disproportionate
share of the world’s unemployed do not reside in
Africa. So, we shouldn’t confuse those. But the
majority of the working poor, because you’ve
got large swaths of workers in agriculture in low-
income countries, disproportionately in Africa,
that’s where you’re going to �nd exclusion in the
labour market being concentrated. That is around
the working poor rather than unemployment.
South Africa, here’s a data point to take away:
South Africa is the only African economy where
the majority of workers, over 50% of workers,
are actually in wage employment. So that really
is another way to think about how weak wage
employment outcomes are. Effectively, if you
exclude the public sector, which sits in wage
employment, the effective average private sector
wage employment rate in Sub-Saharan Africa is
at about 13%. So incredibly weak private sector
wage employment outcomes as well.
We know the famous work from Dani Rodrik with
Maggie McMillan, the Structural Transformation
Bubbles. I’ve produced these as a mechanism or
an entry point for thinking about jobs and growth.
What you see in these structural transformation
bubbles, I like to call them, is developing Asia on
the left, Sub-Saharan Africa on the right. Again,
what’s happened is a question around whether
Sub-Saharan Africa is on a path to adequate
structural transformation manufacturing. The
manufacturing bubble, if you like, is too small.
So effectively, what’s happened is, yes, some
movement of workers outside of low productivity
agriculture, but the majority of workers in Sub-
Saharan Africa are actually going into the informal
sector in urban areas and into the public sector.
You can look at it in terms of numbers. You still
have the challenge in Asia and SSA. If you compare
Asia on the right, I want you to look at the top right
�gure. You see a massive employment reduction
in Asia over this period, 1990 to 2018.
But you still have, uh, Sub-Saharan Africa, with
agriculture in Africa, accounting for 35% of all
jobs over the period, right? So that’s the share
of the change. Are there jobs happening in
manufacturing? Only 9% of jobs, um, over this A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
117
period have come from manufacturing in Africa.
Compare that to 15% of jobs in Asia. Construction:
35% of jobs have come from construction in
Asia over the same period, only 5%. So, weak
patterns of structural transformation that are
ultimately going to drive inclusion, employment,
and certainly wage employment in Africa. We
don’t really see signi�cant patterns of structural
transformation that are going to be employment-
inducing.
There is a discussion, of course, parallel to
manufacturing about services. And in a separate
paper, we’ve done some work using input-
output tables to look at the share of services in
manufacturing. And what you do �nd, the top
two lines are Asia. The bottom two lines are Sub-
Saharan Africa. And we’ve taken traditional and
modern services; it’s very important to separate
the two. And it’s very clear, even if you think
about the role of services in manufacturing, the
average combined services used for Sub-Saharan
Africa is 18%, compared to 27% for the Asian
sample. The OECD average is 22%. The services
need to be further embedded into manufacturing
as a boost to productivity in manufacturing
and employment. That’s not happening at the
moment.
I strongly still retain that for African policymakers.
And that’s the next two slides, thinking at a very
detailed level about moving from one product
that’s currently being exported to the one that’s
closest. To the one that’s closest to the current
exportable product, and I’ve produced a few
product space maps for Kenya, for Senegal.
We’ve done some work on this. So, if Kenya has an
apparel and textiles cluster, which they do, which
is the green dot (some of you know these graphs,
these maps really well), that means that Kenya has
a basis upon which to move and guide industrial
policy towards building capabilities in apparels
and textiles. And the idea, in my view, is this is
one very practical way for policymakers to think
about building resilience and inclusion-promoting
growth at the sub-sectoral level through these
product space mappings. I’ve produced it for
South Africa, and we have others for African
countries. Ghana’s on the left. For example, one
very speci�c example: it took Ghana 30 years to
move from being the world’s leading exporter of
cocoa to �nally opening and producing chocolate.
That’s the idea of moving towards and growing
by moving slowly up the value chain, as it were.
There’s just a summary of the notions and the
ideas that I’ve brought to bear. I worry about
growth, poverty elasticities in the region. I’ve been
looking at them for the last two decades. They
have not changed. Part of it is lost opportunities
through commodity super cycles, which we can
talk about. But ultimately, as we look forward, the
jobs challenge is massive in this region. And if
you think of the spillover effects for the North, in
terms of not resolving a jobs challenge, those are
obviously the migration crisis being a clear one.
Finally, when we think about a different way to do
economic policy that sustains growth in Africa, I
suggest that product space and analytics may be
one route in. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
118
SPEAKER 3
I
’m going to talk about three topics and all
related to the headline: ‘Data is the New
Oil.’ It was also the old oil, and it is political.
Whether it should be or not, I don’t think it
should be, but that’s what I hope to discuss.
Measurement and evaluation of inclusion is a
central part of any policy on inclusive growth.
In India questions on what has happened
to poverty, inequality, and employment are
extremely controversial. I’ll go through the data
from 1983 to 2022 on government data, non-
government data, etc., to try and substantiate
that there is a real problem with interpretation
of data and perhaps with the data itself.
A simple definition item to keep in mind is that
inclusion means at least an equal sharing of
the proceeds from growth. Inclusive growth is
when, regardless of the indicator e.g., share of
bottom 40% in consumption or income (let us
call it X), this share should grow at least at the
SURJIT BHALLA
Table 1: Supply and Wages of College Educated Workers, 1960-2016
1960 1973 1980 1992 2000 2016
Real Wages
1
Some College- 938 880 925 1028 1117
College- 1125 1041 1344 1512 1640
Completed College Education (in millions)
US10.1 19.2 27.4 40.3 45.3 59.9
West16.5 34.4 50.0 79.1 96.9 124.2
Rest7.1 19.1 32.5 80.7 136.2 263.1
Gap in supply of college educated workers
2
Ratio - (West / Rest) 2.3 1.8 1.51.0 0.7 0.5
Percentage difference
3
132.4 80.1 53.8 -2.0 -28.9 -52.8
Median In�ation in the West (in %) 1.6 8.8 12.3 3.22.7 0.4
Source: Economic Policy Institute; [available at] http://www.epi.org/data/#?subject=wage-education
Notes: 1. Data sourced from Bureau of Labour Statistics, in 2016 prices.
2. Aggregate of individuals with completed college degrees (from Barro-Lee Data) is totaled for the West (advanced
economies) and the Rest (all other economies).
3. Percentage difference calculated as 100*(West - Rest)/Rest
Table 7.1 from Surjit S Bhalla, The New Wealth of Nations A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
119
same rate as that pertaining to average. The
average can grow fast, or slow, or negative –
inclusion means that X should be higher than
the average.
Has world growth been inclusive?
Part of the controversial nature of inequality is
that there is a belief that world inequality has
deteriorated considerably. However, the data
shows that at a world level, there has been
considerable inclusive growth. At an individual,
and world level, this is easily verified by the fact
that two very large, and very poor countries,
India and China, have had per capita income
growth far exceeding the world average, and
far exceeding the average for the Advanced
economies, and this has happened over the last
30 years – and continuing.
What the China-India growth data underline
is that inequality has to have improved and
improved dramatically. India and China’s average
growth rate for the last 30 years has been 5.9%
per year. These two large economies account
for something like 40% of the global population,
and they were the poorest in the world in 1980.
The two economies have grown; their average
income has increased at a 5.9% rate, and the
world average is something like less than 2.3%
because the world average includes the 5.9%.
So, inequality has to have improved. When I
first presented these results back in 2002 in
a book called ‘Imagine There’s No Country,’ it
was met with considerable scepticism, not to
mention opposition.
High growth in India and China
Next, an important background to what has
happened to world inequality is that the big
change over the last 40 years, perhaps the
biggest change along with a decline in fertility,
is the rise in average levels of education,
especially amongst the poorest countries of
the world.
This will have, and has had, expansive effects. In
a study in 2017 (The New Wealth of Nations), I
showed that the Western world in 1992, had the
same number of college graduates, that is the
flow, not the stock, about 80 million, graduating
in 1992 and in 2016. And these numbers have
really jumped since then. The Western world
went up to 124 million, and the rest of the world
went up to 263 million. (Table 1)
Table 2: Real wages for skilled and unskilled
workers
Year
Casual
(unskilled)
worker
Skilled
(salaried
worker)
Worker
(either skilled
or unskilled)
1983 41 132 73
1993 56 195 102
1999 81 268 154
2004 90 263 154
2011 137 341 220
2017 174 319 247
2018 183 313 251
2019 179 305 246
2020 186 305 247
2021 213 313 265
Source: NSS & PLFS data, 1983-2021; authors computa-
�ons
Note: In 2011-12 prices, Rs per week
Table 3: Mean Years of Educa�on

Ages 15-
64
Youth ages
15-24
Year Women Men Women Men
1983 0.6 1.2 0.9 1.5
1993 2.7 4.7 3.8 5.3
1999 3.2 5.2 4.5 5.8
2004 4.2 6.5 6.1 7.4
2011 5.5 7.5 7.9 8.7
2017 6.4 8.2 9.2 9.6
2018 6.7 8.4 9.4 9.8
2019 6.8 8.5 9.6 9.8
2020 6.8 8.5 9.6 9.8
2021 7 8.7 9.8 9.9
Source: NSS & PLFS data A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
120
The fact that the supply of richer salaried
workers has moved outward has had predictable
effects. One of the consequences is that based
on NSS data on wages since 1983, we observe
that unskilled workers’ wages have expanded
at an annual rate of 5.2%, and the skilled, which
includes the salaried workers (in India, we
have a classification: are you salaried, are you
a casual hourly wage worker, or are you self-
employed?) The casual and salaried workers
today account for approximately 25% each in
India. And as shown in Table 2, and especially
since 2011, the casual workers’ wages have
really gone up, whereas salaried worker wages
have stayed nearly the same.
Also, Inclusive – Expansion of Education in
India
Now, one of the biggest stories in the world,
and in India, is what has happened to education.
I’ve given the numbers for 15 to 24, which is
the youth. There is complete equality between
men and women in education in India today.
(Table 3) The 15 to 64 age group has a legacy
effect or generational effect, so it’s much more
meaningful to look at 15 to 24 or 15 to 29. And
this is really quite striking. There are many
other pieces of evidence about gender equality
in education in India.
There are more women in college in India today
than men. Oxford University reached, after a
thousand-year history just a few years back,
the milestone of there being more women
in college than men. This is a real, genuine
revolution, which will have consequent effects
on wages and occupations in the future.
One other thing to note about gender equality
in India. Female pilots in India are the highest
in the world at about 15%, versus a 3% world
average. STEM enrolment in India is something
close to about 42%, whereas in the US, it’s
something close to 31%. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
121
Income Distribution in India – No Official Data
Official income distribution data for India are
not available. Consumption inequality data are
available, and the various surveys that have
come out since 2011 show that consumption
inequality has declined post-2011, though
we await the results of the 2022-2023 Indian
consumption expenditure survey.
Wage Discrimination and Inequality in India
Discrimination can take many forms. Inclusion,
non-inclusion can take many forms. One less-
studied aspect of wage inequality is that
between communities e.g., Hindu Muslim. And
what you have is that the median real wage of
Muslims relative to Hindus is higher, but now
it’s about equal. So, no evidence that there is
wage discrimination, and it includes effects of
the endowments, etc., via the Oaxaca-Blinder
decomposition (Table 4).
Table 4: Inclusion via No Discrimina�on
Male Median
Real Wage
Male Median Real Wage
Ra�os (%)
Year
Mus-
limsHindus
Mus-
lim/
Hin-
du
Ra�o by
Oaxaca-
Blinder
decom-
posi�on
US
Black /
White
1983 48.4 40.8 119 110 81.7
1993 72.3 63.7 114 105 80.2
1999 105.1 93.6 112 103 80.4
2004 101.6 97.7 104 100 80.1
2011 145.9 150 97 93 77.8
2017 192.1 192 100 95 74.7
2021 238 228 104 101 78.6
Source: NSS & PLFS data; EPI data for USA
Notes: in 2011-12 prices, Rs per week
Further, in the US, Black-White earnings
differentials have been much studied. Since
about the early 1970s there has been a slight
deterioration. So, this has to be kept in
perspective that we have an example from the
most open democratic country in the world as
to what has happened there, and contrast it wit
the nature of inclusive growth in India.
Trends in Absolute Poverty
A recent IMF working paper concluded that
India has been successful in eliminating
extreme poverty (less than 1% of the population
in 2021-22; Bhalla-Bhasin-Virmani April 2022.)
This is not the conclusion of the gold standard
of poverty estimates, the World Bank. The
important question arises: how did we arrive at
the conclusion that extreme poverty has been
eliminated to less than 1%, whereas the World
Bank thinks it’s something like 10-15%?
The working paper documents that World Bank
assumptions bias their results. The World Bank
uses a very old-fashioned 30-day recall period
method to measure consumption, and therefore
poverty (defined as per capita consumption
less than PPP $1.9 per day per person). Starting
in 1999-2000, the survey authorities moved
toward measuring consumption according to a
Modified Mixed Reference Period (MMRP) basis.
The big difference between the World Bank
method and the official Government of India
method is that the latter measures consumption
in a more elaborate manner e.g., food and
perishables are measured on a weekly recall
basis, consumer durables on a 365 basis. Just
this modification led to the poverty estimate
in India to be 13% in India, compared to 23%
obtained from the World Bank uniform recall
method. And extending the MMRP to 2021-22,
and incorporation of food subsidies, led Bhalla-
Bhasin-Virmani to conclude that poverty in
India was less than 1% of the population.
Counter opinion on inclusion by international
scholars
In conclusion, I want to point out some
counter-opinion on inclusion in India. Despite a
50% growth in real average consumption post
2011-12, international and domestic scholars
(IDS) maintain that extreme poverty in India
has stayed constant at around 20%. That is,
zero consumption increase for the bottom fifth
of the population. Second, UN employment
projections show that the age group 15 to 64
years will expand by a hundred million over the
next decade, approximately 10 million a year.
Yet, IDS maintains that more than a 100 million
jobs are needed over the next decade, with one
prominent scholar estimating the need to be
200 million. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
122
Official PLFS data shows that the female labour
force participation rate is between 28% to 36%,
depending on the employment definition. IDS
scholars maintain, on the basis of CMIE data
which they use instead of PLFS, that the Indian
female labour force participation rate is around
8%, the lowest in the world and well below
Yemen. And this passes as “scholarly” work.
And that’s the question with which I want to
conclude: do such debates happen elsewhere?
At this table, and at this conference, we have
representation from around the world, major
scholars who have worked on poverty, inclusion,
and income inequality. All I am asking is whether
such a debate which is not based on facts
happens elsewhere? In my reading, it doesn’t. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
123
EXPERT COMMENT
I
would like to touch upon two themes related to
the major part of the discussion in this session.
First, India has seen a major reduction in multi-
dimensional poverty. Compared to 2015-2016
vis-a-vis 2019-2021, in this �ve-year span,
multi-dimensional poverty declined from 25% to
15%. And, the most dramatic decline was not in
urban areas, but in rural areas, from 33% to 19%,
almost a one-third decline. As many as 135 million
individuals, citizens of India, came out of multi-
dimensional poverty during this relatively short
period of time. We can expect achieving SDG
target 1.2 much ahead of the 2030 timeline.
The World Inequality Report shows that globally,
the top 10% of people have 50% or more of the
income. And, the bottom 50% typically have less
than 10% of the income. My question is, what is
the norm for an inclusive, just equitable society
going forward? Having learned from the past,
going into the 21
st
century and beyond, what
should be that mix of income distribution across
population quintiles?
My second point is in relation to the role of
�nancial shocks related to healthcare that trigger
impoverishment, inequalities and poverty. The
impoverishment due to health spending in India
in 2015-2016 has been estimated in a study
to be 5.1%. It is estimated that over 32 million
individuals are pushed into poverty every year
due to catastrophic health expenditure. Our out-
of-pocket expenditure between 2015 – 2016 and
2019-2020 has declined from 65% to 47%. The
global average of out-of-pocket expenditure is
17%. Can we do better globally with the help of
G20 and international community? We endeavour
reduce out-of-pocket expenditure for health
further.
You may be aware of the Ayushman Bharat PMJAY
�agship scheme of India. This is the world’s largest
publicly-funded health assurance programme
which provides free care for hospitalisation to
over 600 million citizens of India. In the course
of about �ve years, we have seen 54 million
hospitalisations; typically, about 50,000 per day.
And we believe on the basis of the estimates
available to us that this scheme has saved $12
VINOD KUMAR PAUL A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
124
billion US dollars in out-of-pocket expenditure to
the citizens of India since late 2018.
The major reason for out-of-pocket expenditure
is outpatient expenditure on medicines and
diagnostics. We’re trying to make available over
a hundred drugs through our primary healthcare
system, which has seen a transformation with the
institutionalisation of more than 150,000 Health
and Wellness Centers in a span of less than four
years, from 2018 to 2022.
Being the pharmacy of the world, India is in a
position to expand contribution of affordable
medicines for the world. We also believe that we
can offer inexpensive, affordable diagnostics. In
the course of Covid, almost 300 new diagnostics
came from India in a matter of a few months.
We look forward to your ideas on how to reduce
inequalities, and how to achieve the Universal
Health Care SDG target. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
125 A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
126
July 28-29, 2023
Hotel ITC Maurya, New Delhi, India
KEYNOTE ADDRESS
NANDAN NILEKANI
Chairman and Co-founder,
Infosys Ltd., Bangalore and
Founding Chairman UIDAI
(Aadhaar) (India) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
127
NANDAN NILEKANI
T
hank you very much, Suman. It’s really great
to be in this august gathering. I’ll speak
today about digital public infrastructure,
but in the context of a fragile world and
how you need to be agile in a fragile
world. I think we all know the situation. The world is
getting hotter, 1.5 degrees, two degrees. The world
is getting older, and you can see that in the next
hundred years, there’s going to be a lot more old
people. And we know that relationships are getting
colder now. All friend shoring, you want to start
geopolitics. Different countries impact that on the
supply chain. So, it’s a very complicated situation
that is emerging.
Now, obviously, I think you have �gured out
in this gathering that India is uniquely placed.
It’s a young democratic nation with a lot of
potential. And many estimates on how it’s gonna
be number two, number three, whatever in the
world. But actually, if you look inside India, we
have historically had huge variations in cultures,
markets, industrialisation, and regulations. With a
country with so many languages, you can’t even
talk to another Indian. It’s often dif�cult because
they don’t have any common language. We had
very many micro markets. States had different tax
laws. People would have a warehouse in every state
because they had to have a way to service each
state. Industrialisation across the country is very
different, and of course, many regulations at the
state level. So there was not really a single market
until recently. And I’ll talk about how technology
has enabled this creation of a single market with all
its consequences on the economy.
Now, what I think is happening, and it’s maybe a
10-20 year journey, but fundamentally, India is
moving from an of�ine, informal, low productivity
set of micro economies to a single online, formal,
high productivity mega economy. That’s a 20-year
process, but I think you can see the beginnings of
that change. And that’s one of the reasons which
is the root of the transformation happening in
the country. A lot of this is enabled by what we
call digital public infrastructure, which is public
digital infrastructure at population scale meant
for everyone and either built with public funding
or enabled by the public through regulation and
policy. Now, these are really building blocks, and
these building blocks have been designed over
the last 15 years. Each building block does one
thing, but then each sits with others, and the
interoperability of those building blocks creates a
lot of real innovation.
Now, digital public infrastructure is not a new idea.
If you look at the original internet, it was funded
by the US Department of Defense. The worldwide
web was designed at CERN, which was funded by
European countries. The Mosaic browser was built
by a grant from the National Science Foundation, so
fundamentally, the digital public infrastructure, the
original one, is the internet built by public money.
But then it had a set of protocols on top of it, which
led to market innovation, and that led to the rise of
Google, Facebook, and so on. Similarly, GPS was
again funded by defense in the US. It answered the
question, “Where am I?” That became the basis for
maps that became the basis for ride hailing. So we
have seen this movie before where you can invest
in digital public infrastructure and build on top
of that through innovation. What has happened
in India has taken that idea forward in many new
areas and created a whole new infrastructure, not
only for basic technology but to enable equitable
growth, which cuts across regions and so on. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
128
Now, an example of that is how DPI was used in
�nancial inclusion in India. Now, as the BIS recently
reported, India was able to do in nine years in
�nancial inclusion what would normally have
taken 47 years. In other words, the acceleration
of �nancial inclusion where the number of people
with bank accounts went up from 20% to 80%
in nine years was essentially lubricated or done
with technology. And this is something which
has had a huge impact on the country in terms of
creating a more inclusive model. Similarly, what has
happened with cash? In 2016, Indians were mostly
using cash payments. In six years, we now have the
largest volume of digital payments in the world.
About 40% of digital payments in the world are
done in India today. UPI, which is a very low-cost,
high-volume transaction processing system run
by the National Payment Corporation from India,
does 9 billion transactions a month. It has about
350 million users and about 50 million merchants
where you can make digital payments. This has
come from nowhere and suddenly become the
world’s largest digital payment infrastructure.
Fundamentally because the philosophy and the
way of thinking about it was, “How do we create a
national digital public infrastructure?”
And Subbu was kind enough to talk about
Aadhaar, which I led the project for �ve years.
Essentially, we had to solve the problem of how do
you give people without any ID an ID. Give people
without a birth certi�cate a starting ID. And today,
1.3 billion people are on the ID platform. And this
is something which has become foundational for
everything else. And this was the root of creating a
single source of truth, reducing duplication, and so
on. And this ID is used for online identity veri�cation
up to 80 million times a day for the transaction
volume just on ID. 80 million times a day that it’s
used by somebody somewhere to verify that he’s
who he claims to be. So, think about the volumes
you’re talking about. You’re talking about payment
transactions of 9 billion UPI transactions a month,
80 million Aadhaar authentications a day, and
so on and so forth. So these are really very large
scale, 24 by 7, real-time, quick response systems
that have been built in India. And these, I talked
about the fact that DPIs do one thing at a time. So
each of these things allows other things to happen
because they’re all built using interfaces, protocols,
programming interfaces, and so on.
So, Aadhaar was the basis for identity, but on
top of Aadhaar was built a capability called KYC,
or “Know Your Customer.” How do you, how do
you, because for many things like opening a bank
account or getting a mobile connection, you need
to know the customer, otherwise you can’t do it.
And we built e-KYC as a digital way of doing this
KYC, which you can do in two minutes.
Now, that led to two revolutions. One was the
banking revolution I referred to earlier, which is
thanks to the Prime Minister’s Jan Dhan program,
which was launched in 2014. 700 million new bank
accounts got opened with Aadhaar KYC. So the
KYC enabled people both to get an ID and verify
that ID in real time to open a bank account. And
that’s how, and that is used not only for cash
transfers, it’s also used for non-cash transfers. So
in a PDS system, which is a national distribution of
basic amenities like rice and so on, all authentication
is done with Aadhaar. So this was on the bene�t
side, but the same thing happened on the mobile
side.
And in 2016, when Jio was launched, Jio essentially
was a new mobile network, India’s �rst truly 4G
network. And that network had the goal of getting
to a hundred million customers in six months,
which means they had to enroll or onboard 1 million
customers a day. And the only way they could do that
was to use Aadhaar e-KYC for mobile connections.
That essentially transformed the mobile industry.
The mobile industry went from one gigabyte (GB)
of data per month consumption to one GB a day, a
30x increase in data consumption after the launch
of Jio. And similarly, the smartphone penetration
went up to about 70%.
So essentially, what these three things did was lay
the digital foundation for equitable participation of
everybody. Everybody had a digital ID, digital ID
could be used anywhere in the country for online
authentication, so it made it friction-free for you to
travel in the country. Digital ID gave you KYC, KYC
gave you a bank account. Digital ID gave you KYC
for mobile, gave you a smartphone connection. So
everyone could get a smartphone connection, a
bank account, and an ID, and they’re good to go
going forward. Essentially, that’s what DPI does. It
allows you to mix and match things and create all
kinds of solutions on top of that.
Similarly, another great initiative of digital, which
is by DigiLocker, is a single repository for all your
digital documents. So this is a single market for
credentials. And today, it has about 180 million
people using it, and they keep all their documents
there. There are about 5 billion documents stored
here. So a person would keep his driver’s license,
his Aadhaar details, his vaccination certi�cate, his A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
129
vehicle registration, and they don’t need to carry
it anywhere. They can just show it on the phone,
and it’s digitally certi�ed that it has come from the
source, so it eliminates fraud. This again is like a
national market for credentials. You can get your
credentials in Bihar, migrate to Delhi, and use
your credentials there. All this helps in reducing
transaction costs, brings in ef�ciency, and so on.
And then UPI, I talked about UPI, which was the
payment system, which does 9 billion transactions
a month, but it’s also changed the way India does
merchant payments. In India, POS machines took
about 75 years to reach 6 million point of sale
machines. Now, in a matter of four years, we have
50 million merchants where you can pay using
a QR code. And these QR codes are just stuck
there in front. These are coconut vendors selling
coconuts who have a couple of QR codes, and
I just have to point my phone at the QR code
and make a payment. And this has essentially
dramatically transformed business transactions
or retail transactions. And you also have things
called the sound box where you can hear that
the payment has been received, which improves
the productivity of a small merchant because he
doesn’t have to handle cash. You just hear that the
money has come. So all these innovations have
happened to essentially reduce transactions in
business transactions. And this again is happening
at a huge scale.
And then, of course, the GSTN, which was another
great initiative, has essentially created a backbone
for a single market. So think about it this way:
that identity, bank accounts, and mobile phones
operating anywhere in the country created a single
market for services and people. And GSTN created
a single market for products. And what’s important
is that it has not only led to an increase in revenues
because of improved compliance through better
revenue collection, but it also provides the data
for what we’ll come to later, which we call digital
capital. The way the GSTN is designed is actually
a company which is jointly owned by the Indian
government and the states, which operates our tax
system. So India went to a simpli�ed tax system
for everybody for indirect tax, and also before
this, different states were at different levels of
tax systems. Now everybody is at the same level,
everybody uses the same system, everybody �les
their returns online. The same thing happens in
income tax. We have gone to a completely online
income tax system. So the combination of both
indirect tax and direct tax being completely digital
has had huge bene�ts, including raising the tax
revenues of the country.
And then, of course, the logistical improvements
on the highways. GST has created single markets.
You don’t have to have a warehouse everywhere.
You can have one warehouse. FASTag is the RFID
tag, which every truck and car today has. So when
they pass through a toll gate, they automatically
debit the wallet attached to the FASTag.
This system alone does 2.5 billion transactions a
year, and it has had a dramatic impact on ef�ciency
and productivity on the roads because you don’t
have to stop. And it’s expected that this year it’ll be
about 8 billion transactions.
Now, all these things have also established a way
to strengthen a company’s public �nances, which I
think you’ll all agree is very important because tax
revenues have gone up. Tax revenues in India for
the last 10 years have risen faster than GDP growth,
and that is essentially because of technology,
compliance, and formalisation. More and more
people are joining the formal economy. Similarly,
that’s on the revenue side. On the expenditure side,
all welfare spending is done through Aadhaar-
linked bank accounts, which makes sure that the
money goes to the right person. Cumulatively,
since inception, India has transferred $210 billion
directly into people’s bank accounts. That has
made a huge impact on delivering bene�ts
without any leakages. Moreover, the whole PFMS,
the �nancial management system, is linked with
Aadhaar, so when money is sent, you can drill
down to granularity as to whom it was sent to.
That dramatically reduces leakages and corruption
in the system. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
130
And then, of course, in the case of credit, I’ll come
back to that. So basically, these things actually
have a material impact on the economy. Then, the
digital public infrastructure also makes markets
more equitable and competitive. The latest
initiative in India is called ONDC, Open Network for
Digital Commerce, which unbundled commerce.
E-commerce historically has been a single
company where you place the order, which has a
list of suppliers, and which delivers to you. ONDC
does unbundled commerce. So I can order from
any app, from any supplier, and have it delivered
by any logistics company. This is really opening
up commerce so a small guy in a small town can
list his products using the ONDC protocol, and
anybody can buy from that person. We think this
will democratise discovery, reduce transaction
costs, and also create a much healthier, competitive
e-commerce market so that it’s not like a winner-
take-all with just one or two players.
A good example of that is a union of auto-rickshaw
drivers with the three-wheelers in Bangalore. They
are using a protocol, and they are just getting the
rides discovered on the platform, but they don’t pay
anybody in between. The transaction is between
the consumer and the driver. So he gets 100% of
the money, not 70% of the money. There’s nobody
taking a cut. There’s no aggregator taking a cut in
between. This is already doing 80,000 transactions
a day, which means 80,000 times in a day, some
person in Bangalore is using this platform to get an
auto-rickshaw. And you can imagine this can then
be done for taxis. Fundamentally, it’s restructuring
the way mobility is done in India.
And then, of course, we have AI initiatives like
Bhashini. Bhashini is an initiative to create a
complete AI base for all 22 major Indian languages.
And this is all being built as an open stack so that
anyone can use it. It’s for speech-to-speech, text-to-
speech, text-to-text, etc. And it essentially means
that every Indian will get access to knowledge in
their language of choice, verbally spoken to them,
through speech. This dramatically improves access
because I was talking to you about the fact that we
have so much diversity. This initiative will essentially
allow everyone to participate. So, in time, I’ll make
a payment on my phone using UPI in Bhojpuri,
and that’s coming in the next year. So these are all
fundamentally changing access to technology for
millions of people.
What we are saying is DPIs also create data as
a byproduct because, as we know, every digital
transaction has data as a byproduct. But in the
Western world, that data is captured by large
platforms who then use it to sell ads to you. The
data is not with you. In a small autocratic world,
data is used as a surveillance mechanism. The
Indian model gives data back to you, and we call
that digital capital. Just as we have historically
thought of land, labor, and capital as assets, digital
capital is the latest form of capital. But you can only
unlock digital capital if you can make it accessible
to people. That’s what Indian architecture has done.
We have an architecture in India called the Account
Aggregator, sponsored by the Reserve Bank of
India, which allows for all �nancial transactions. An
individual can get access to his or her own data
and then use it to get a loan or buy a mutual fund.
So the fact that we are unlocking digital capital is
another huge driver for inclusive economic growth.
A young person gets an ID, uses the ID to open
a bank account, uses UPI to get payments, then
based on their transaction history, they get access
to loans, build a credit history, get business loans,
then use an online education platform to learn skills,
and so on. Basically, you can create a pathway for
individuals and businesses to get access and join
the formal economy.
We are seeing the same thing happening in credit
today with digital capital so that people can give a
history of their �nancial transactions. e-KYC, UPI,
and small loans are exploding in India. This is the
democratisation of credit. Historically, credit went
to large entities because they were the only ones
who had data to prove that they were worthy of a
loan. But now millions of small people are going to
get credit. Credit is going to go both to the buyer
and the seller. Consumers will get credit based on
their history. Suppliers will get credit based on their
history. You’re essentially going to turbocharge
the economy by giving credit to both buyers and
sellers. And that’s part of the reason why you’re
going to see serious economic growth here.
And this digital capital can also be accessed by
countries, for example. The Fastag I talked about is
essentially used for ef�ciency at tollgates, but the
byproduct of that is there’s no leakage of money
at the tollgates. All the money is collected because
it’s all digital, and the tollgates become much more
bankable. Now, we are seeing that the government,
NHAI, is able to sell the toll gates because the buyers
are sure of the revenues and can reinvest that
money into new roads. The recycling of capital for
building infrastructure will also happen because the
digital capital will fund new physical infrastructure.
You can sell or securitise the old assets. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
131
Similarly, all this will enable many AI applications. I
saw you had a discussion on AI earlier, but I won’t
get into details. Fundamentally, all this will also
enable the application of AI for various solutions.
We can talk about that later. So, what this does is it
provides the basis for formalisation. Formalisation
is a challenge in every society. How do you create
a formal economy? What’s in it for the person? If a
person is outside the system, why should they join?
They might just get stuck with bureaucracy and
taxes. Now, we are offering a new bargain: if you join
the system and we simplify that with technology,
you can then use your digital capital to get ahead.
If I’m a small business relying on informal credit
and I enter the system, I’ll get formal credit. We’re
creating the incentive for people to join the formal
system. That’s what I meant by formalisation. This
is going to happen over the next 20 years.
Digital infrastructure is only as useful as the people
who build solutions. As I said, the internet was
there, but you think of the internet as using Uber,
Facebook, or Google. Similarly, we need to create
a way for these building blocks to be recon�gured
to create solutions. India is very well placed
because it has a huge entrepreneurial class which
is leveraging this technology to build innovative
solutions.
NASSCOM, the Indian IT Services, laid the
foundation for this. It’s a $227 million industry
employing 5 million people, and that has provided
the technology and the talent for making the DPI
possible. Of course, there’s a huge startup system
on top. Just to give you a sense of the scale,
there were 1,000 startups in India in 2016. Today,
there are 115,000 startups. Of the 115,000, about
30,000 have gone bankrupt. But it doesn’t matter.
Innovation is happening at a crazy scale. The
innovation ecosystem is built on top of the digital
public infrastructure we have.
And �nally, we talked about agility. In this new world,
agility is the ability to respond in policy at scale.
Digital public infrastructure is the key to that. How
do you respond quickly to changes in the world?
And also, how do you balance between regulation
and innovation? We do that by embedding policy
as code. So, if you look at ONDC, for example, the
policy of the ecosystem is in the code. Or if you
look at UPI, where there are multiple banks and
multiple apps, the policy for how they operate is in
the code of those platforms. This allows us to be
much more �exible and reduce the time between
thinking of policy and implementing it.
In times of crisis, DPIs actually elevate your response.
For example, the entire vaccination programme
of India was done on a common platform built
by the government called CoWIN. Everybody
could get vaccinated anywhere. They received a
digital vaccination certi�cate they could keep in
their digital locker. That took off. And then, using
the plumbing, you could transfer money. So, $4.5
billion was transferred during the COVID pandemic
into bank accounts of 160 million bene�ciaries. You
could make that decision in real time. If you want
to give money to these people, you can do it. Of
course, everybody uses this platform now, so it’s
interesting to see how it’s evolving.
Now, we talked about climate and green growth.
Digital public infrastructure can also be used for
both adaptation and mitigation. For example, if
you have the plumbing, you can make anticipatory
climate �nancing for improving resilience. You can
use it for giving emergency money for a natural
disaster. You can use it to prevent forests from being
cut. All that requires plumbing. Having agnostic
plumbing allows you to also use it for climate.
ONDC allows you to have a circular economy.
ONDC can now have a reverse logistics specialist
who takes the stuff back so that it’s recycled, and so
on. And similarly, as you go from monolithic power
generation to thousands of batteries in thousands
of cars bumping up power using a feed-in tariff,
you need infrastructure that’s interoperable for
that. You can build all kinds of things for that. I
won’t go into details, but fundamentally, even for
the climate transition, you’ll need to think through
what kind of digital infrastructure is required at a
population scale.
Moreover, �nally, let me say, a DPI approach requires
deep conviction, not deep pockets. This isn’t about
money. We spend all our time arguing about trillion
dollars for this and that. This doesn’t need any of
that. This just costs a few billion dollars, but it has
a massive payoff. The ROI is very high. India spent
a billion and a half on Aadhaar and has saved $27
billion. You can’t get a better ROI. Even VCs would
like to see that kind of ROI. When you build this
stuff, it’s built for high volume, low cost, sachet-
sized transactions. It’s built to innovate on top. And
as I said, the policy can be embedded in the code.
Digital capital is key for this. I don’t have time to
go into details, but fundamentally, I believe green
growth in an uncertain world needs a new agile
approach, and every nation needs such a digital
transformation.
Thank you very much. A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
132
APPENDICES A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
133
APPENDIX 1: CONFERENCE OUTLINE
Friday, July 28
9.15 AM – 9.30 AM Welcome address: CEO, NITI Aayog and President, IDRC
9.30 AM – 9.45 AM Goals and Process – G20 India Sherpa, VC NITI Aayog (India)
9:45 AM - 11:15 AM
(90 minutes)
Session 1 – Energy, Climate, Growth
Chair: Jayant Sinha, Member of Parliament & Chair of
Parliamentary Standing Committee on Finance (India)
Discussion Leaders
• Robert Stavins, AJ Meyer Professor, Energy and Economic
Development, Harvard University, Cambridge MA (USA)
• Jessica Seddon, Senior Fellow, Yale Jackson School of
Global Affairs (USA)
• Arunabha Ghosh, CEO, Council on Energy, Environment
and Water (CEEW), New Delhi (India)
11:15 AM - 11:35 AM Tea/Coffee Break
11:35 AM - 1:05 PM
(90 minutes)
Session 2 – Technology, Policy, Jobs
Chair: Sachin Chaturvedi, Director General, Research and
Information System for Developing Countries (RIS), New Delhi
(India)
Discussion Leaders
• Paul Samson, President, Center for International
Governance Innovation (CIGI) (Canada)
• Albert van Jaarsveld, Director General, International
Institute for Applied Systems Analysis (IIASA) Laxenburg,
(Austria)
• Debjani Ghosh, President, National Association of Software
& Services Companies (NASSCOM) New Delhi (India)
Expert Comment: Vijay Kumar Saraswat, Member, NITI Aayog
(India)
1:30 PM – 2:00 PM
Introduction by BVR Subrahmanyam, CEO, NITI Aayog (India)
Keynote address: Nandan Nilekani, Chairman and Co-founder,
Infosys Ltd., Bangalore and Founding Chairman UIDAI (Aadhaar) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
134
2.00 PM – 3:00 PM Lunch
3:00 PM – 4:30 PM
(90 minutes)
Session 3 – Growth implications of a fractured trading system
Chair: Peter Drysdale, Emeritus Professor of Economics and
Head of the East Asian Bureau of Economic Research, Australian
National University, Canberra (Australia)
Discussion Leaders
• Alicia Garcia-Herrero, Chief Economist, Asia Paci�c Natixis
(Spain)
• Nagesh Kumar, Director and Chief Executive, Institute for
Studies in Industrial Development (ISID) (India)
• Otaviano Canuto, Senior Fellow, the Policy Center for the
New South (Brazil)
Expert Comment: BVR Subrahmanyam, CEO, NITI Aayog
(India)
4:30 PM – 04:45 PM Tea/Coffee Break
4:45 PM – 06:15 PM
(90 minutes)
Session 4 – Reshaping Global Finance for Sustainable Growth
Chair: N. K. Singh, Chairman, Finance Commission and President,
Institute of Economic Growth (India)
Discussion Leaders
• Hanan Morsy, Deputy Executive Secretary and Chief
Economist, United Nations Economics Commission for
Africa (Ethiopia)
• Tao Zhang, Chief Representative for Asia and the Paci�c,
Bank of International Settlements (BIS) (China)
• Poonam Gupta, Director General, National Council of
Applied Economic Research (NCAER) (India)
Expert Comment: Manjeev Singh Puri, Former Ambassador
of India to the EU, Distinguished Fellow, The Energy and
Resources Institute (India)
6:15 PM – 7.30 PM
Virtual Discussion and wrap up of Day 1
Chair: Ashima Goyal, Professor, Indira Gandhi Institute of
Development Research (IGIDR) (India)
Discussion Leaders
• Robert Lawrence, Albert L. Williams Professor of
International Trade and Investment, Harvard University
Cambridge MA- Technology, Policy, Jobs [Virtual](USA)
• Homi Kharas, Senior Fellow, Center for Sustainable
Development, Brookings Institution, Washington DC -
Multilateralism: Geopolitics, Governance and the global
commons [Virtual] (USA)
Kapil Kapoor, Regional Director-Asia, IDRC, New Delhi (India)
– Summary of the �rst day A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
135
Saturday, July 29
9:30 AM - 9:45 AM Opening Remarks: VC, NITI Aayog (India)
9:45 AM - 11:15 AM
(90 minutes)
Session 5 – Multilateralism: Geopolitics, governance and the
global commons
Chair: V. Anantha Nageswaran, Chief Economic Adviser, Ministry
of Finance, Government of India, New Delhi (India)
Discussion Leaders
• Jean-Louis Arcand, President, Global Development
Network (GDN), Geneva (Switzerland)
• Mari Pangestu, Former Managing Director, Development
Policy and Partnership, World Bank (Indonesia)
• Ram Madhav, President, India Foundation (India)
Expert Comment: Ramesh Chand, Member, NITI Aayog (India)
11:15 AM - 11:35 AM Tea/Coffee Break
11:35 AM - 1:05 PM
Session 6 – Adjustment, Resilience and Inclusion in an Uncertain
World
Chair: François Bourguignon, Chair, GDN Board; Professor
Emeritus, Paris School of Economics, former Chief Economist,
World Bank (France)
Discussion Leaders
• Santiago Levy, Non-Resident Senior Fellow, Brookings
Institution (Mexico)
• Haroon Bhorat, Professor, University of Cape Town, [Virtual]
(South Africa)
• Surjit Bhalla, former Executive Director for India, Sri Lanka,
Bangladesh and Bhutan, IMF (India)
Expert Comment: Vinod Kumar Paul, Member, NITI Aayog (India)
1:05 PM – 2:15 PMLunch
2.15 PM – 3.45 PM
Round-table: How must the G20 evolve? Chaired by
Jean-Louis Arcand, President, Global Development Network
(GDN), Geneva (Switzerland), and Amitabh Kant, G20 Sherpa of
India
3:45 PM – 4:00 PM Closing Remarks by BVR Subrahmanyam, CEO, NITI Aayog (India) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
136
NITI Aayog
The NITI Aayog serves as the apex public policy think tank of the Government of India, and the nodal
agency tasked with catalysing economic development, and fostering cooperative federalism through
the involvement of State Governments of India in the economic policy-making process using a bottom-
up approach. NITI Aayog is developing itself as a state-of-the-art resource centre with the necessary
knowledge and skills that will enable it to act with speed, promote research and innovation, provide
strategic policy advice for the government, and deal with contingent issues.
Learn more at www.niti.gov.in
International Development Research Centre (IDRC)
As part of Canada’s foreign affairs and development efforts, the International Development Research
Centre (IDRC) invests in high-quality research in developing countries, shares knowledge with
researchers and policymakers for greater uptake and use, and mobilises global alliances to build a more
sustainable and inclusive world. IDRC’s investments aim to achieve the United Nations’ Sustainable
Development Goals (SDGs). They focus on �ve key areas including climate-resilient food systems;
global health; education and science; democratic and inclusive governance; and sustainable inclusive
economies.
Learn more at www.idrc-crdi.ca/en.
Global Development Network (GDN)
The Global Development Network (GDN) is a public international organisation that supports high quality,
policy- oriented, social science research in Lowand Middle-Income Countries (LMICs), to promote better
lives. GDN promotes research on the premise that contextualised and locally driven research leads
to more informed policies, increased policy ownership, better informed implementation, and more
sustainable and inclusive development choices. GDN also enables research capacity strengthening
across countries and disciplines.
Learn more at www.gdn.int.
APPENDIX 2: ABOUT THE ORGANISERS A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
137
APPENDIX 3: ACKNOWLEDGEMENTS
Overall Leadership
Mr Suman Bery, Vice Chairman, NITI Aayog
Dr Kapil Kapoor, Regional Director South Asia, IDRC
Prof Jean-Louis Arcand, President, GDN
Team Leaders
Ms Anna Roy, NITI Aayog
Mr Vikas Kumar, IDRC
Ms Ramona Angelescu Naqvi, GDN
Overall Coordination
Mr Liankhankhup Guite, NITI Aayog
Mr Sabyasachi Upadhyay, NITI Aayog
Ms Rupal Jain, NITI Aayog
IT Oversight
Mr Rajesh Sharma, GDN
Communications Outreach
Mr Yugal Kishore Joshi, NITI Aayog
Ms Keerti Tiwari, NITI Aayog
Ms Anisha Bhasin, NITI Aayog
Ms Subhashree Pati, NITI Aayog
Ms Ragini Singh, GDN
Ms Kanika Jha Kingra, IDRC
Finance Oversight
Mr Naushad Khan, GDN
Logistics Management and Support
Mr K.S. Rejimon, NITI Aayog
Mr Dominic Massey, GDN
Notes and Session Summaries
Dr Shashank Shah, NITI Aayog
Mr Balasubramanyam Pattath, GDN
Mr Vikas Kumar, IDRC
Compilation, Editing and Design of Conference Publication
Ms Urvashi Prasad, NITI Aayog
Dr Shashank Shah, NITI Aayog
Mr Vikas Kumar, IDRC
Mr Balasubramanyam Pattath, GDN
Report Launch Event
Ms Urvashi Prasad, NITI Aayog
Ms Geetu Makhija, NITI Aayog A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
138
Albert van Jaarsveld was appointed as the 11
th
Director General of the
International Institute for Applied Systems Analysis (IIASA) in 2018. Prior to
joining IIASA, he served as Vice- Chancellor and Principal of the University
of KwaZulu-Natal in South Africa, and President and CEO of the South
African National Research Foundation (NRF).
He received his doctorate in zoology (University of Pretoria), pursued
postdoctoral studies and research in conservation biology and global
security in Australia and the United Kingdom, and underwent leadership
training at the University of Harvard. His research has focused on
biodiversity, conservation planning, biodiversity and climate change, and
ecosystem services. He was appointed Full Professor at the Universities
of Pretoria and Stellenbosch and has published over 100 primary research
papers, including highly cited works in science and nature.
Albert van
Jaarsveld
Director General of the
International Institute for
Applied Systems Analysis
(IIASA)
(Austria)
Alicia Garcia-Herrero is the Chief Economist for Asia Paci�c at French
investment bank Natixis, based in Hong Kong and an independent Board
Member of the AGEAS insurance group. Alicia also serves as a Senior
Fellow at Bruegel, non-resident Senior Fellow at the East Asian Institute
(EAI) of the National University Singapore (NUS) and Adjunct Professor at
the Hong Kong University of Science and Technology (HKUST).
In addition, she is a Member of the Board of the Center for Asia-Paci�c
Resilience and Innovation (CAPRI), a member of the Council of Advisors on
Economic Affairs to the Spanish Government, a member of the Advisory
Board of the Berlin-based Mercator Institute for China Studies (MERICS)
and an advisor to the Hong Kong Monetary Authority’s research arm
(HKIMR).
Alicia
Garcia-Herrero
Chief Economist, Asia
Paci�c Natixis
(Spain)
APPENDIX 4: ABOUT THE SPEAKERS
(In alphabetical order by �rst name) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
139
Amitabh Kant is currently India’s G20 Sherpa. He is a governance reformer
and a public policy change agent for India, having driven key reforms and
initiatives during his tenure as the Chief Executive Of�cer of the NITI Aayog
(2016-2022) and the Secretary of Department of Industrial Policy and
Promotion (DIPP) (2014-2016), Govt. of India. He has been a key driver of
�agship national initiatives such as Startup India, Make in India, Incredible
India, Kerala: God’s Own Country and the Aspirational Districts Programme.
NITI Aayog is India’s apex policymaking institution, with the Prime Minister
as its Chairman. As CEO of NITI Aayog, Mr. Kant has driven a vast range of
national-level developmental and policy initiatives which catalyzed India’s
social and economic development and have brought about a paradigm
shift in policy-making.
As Secretary, DIPP, he has driven the Start-up India movement which has
led to India emerging as the third-best ecosystem for startups globally.
His focus has been to facilitate Ease of Doing Business (EoDB) through
predictability, consistency of policies and elimination of rules, regulations
and procedures. This led to India jumping 79 positions in Ease of Doing
Business Indicators. He also initiated competition and ranking amongst
Indian states based on their EoDB indicators.
Amitabh Kant
G20 Sherpa of India
(India)
V. Anantha Nageswaran is the Government’s Chief Economic Advisor
based in the Ministry of Finance. He has worked as a writer, author, teacher
and consultant. Dr. Nageswaran has taught at several business schools
and institutes of management in India and in Singapore and has published
extensively.
He was the Dean of the IFMR Graduate School of Business and a distinguished
Visiting Professor of Economics at Krea University. He has also been a part-
time member of the Economic Advisory Council to the Prime Minister of
India from 2019 to 2021. Dr. Nageswaran holds a Post-Graduate Diploma in
Management from the Indian Institute of Management, Ahmedabad and a
doctoral degree from the University of Massachusetts in Amherst.
V. Anantha
Nageswaran
Chief Economic Adviser,
Ministry of Finance,
Government of India
(India) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
140
Arunabha Ghosh is a highly respected public policy expert, author, columnist,
and institution builder. He is the founder-CEO of the Council on Energy,
Environment and Water (CEEW) in India, since 2010. Under his leadership,
CEEW has emerged as one of Asia’s foremost policy research institutions
and has been recognised among the world’s top 20 climate think tanks.
Dr. Ghosh has held positions at prestigious institutions such as Princeton,
Oxford, UNDP (New York), and WTO (Geneva).
Currently, he serves on the Government of India’s G20 Finance Track Advisory
Group and provides guidance to the Sherpa Track for India’s G20 Presidency
in 2022-23. In 2022, he was appointed by the UN Secretary-General to the
High-level Expert Group on the Credibility and Accountability of Net-Zero
Announcements by Non-State Actors.
His contributions extend to advising India’s Prime Minister’s Of�ce, ministries,
state governments, and international organisations on a wide range of
subjects. He has been invited by the Government of France as a Personnalité
d’Avenir to provide counsel during the COP21 climate negotiations and
has played a key role in Hydro�uorocarbons (HFC) negotiations under the
Montreal Protocol.
He holds a doctorate from the University of Oxford as a Clarendon Scholar and
Marvin Bower Scholar. He also obtained an M.A. (First Class) in Philosophy,
Politics, and Economics from Balliol College, Oxford, and a Bachelor’s degree
in Economics from St. Stephen’s College, Delhi.
Arunabha Ghosh
CEO, Council on Energy,
Environment and Water
(CEEW)
(India)
Ashima Goyal, emeritus professor Indira Gandhi Institute of Development
Research (IGIDR), Mumbai, is widely published in international �nance
and governance, has received national and international awards, edits a
Routledge journal, is active in the domestic policy debate, and has served
on several boards and policy committees including the Prime Minister’s
Economic Advisory Council. Currently she is a member of the RBI Monetary
Policy Committee and chair of a task force on repurposing the international
�nancial architecture in T20.
Her research has received national and international awards, including
two outstanding research awards from GDN in Tokyo (2000) and Rio de
Janeiro (2001); was selected as one of the four most powerful women
in economics, a thought leader, by Business Today (2008); was the �rst
Professor P.R. Brahmananda Memorial Research Grant Awardee; received
the SKOCH Challenger Award for Economic Policy (2017); and select as
one of the most powerful women in Indian business in 2021 and 2022 by the
editorial team at Business Today.
Ashima Goyal
Professor, Indira Gandhi
Institute of Development
Research (IGIDR)
(India) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
141
Debjani Ghosh has been President of the National Association of Software
& Services Companies (NASSCOM) since April 2018. A veteran of the
technology industry, she is the �fth president of NASSCOM and the �rst
woman at the helm. Ms. Ghosh is responsible for establishing new growth
areas for the technology industry in India and works with governments and
industry stakeholders to establish policies and initiatives that help accelerate
the growth of the sector in India and across the world.
Before joining NASSCOM, she was the �rst woman to lead Intel India and the
Manufacturers’ Association for Information Technology (MAIT).
In January 2018, she was felicitated by the President of India under the
auspices of the ‘First Ladies’ program, which honors exceptional women
pioneers in their respective �elds. She has also been listed in the ‘100 Most
In�uential Woman in UK-India Relations: Celebrating women’ list.
Ms. Ghosh holds a bachelor’s degree in political science from Osmania
University in Hyderabad, India, and an MBA in marketing from S.P. Jain
Institute of Management and Research in Mumbai, India.
Debjani Ghosh
President, National
Association of Software
& Services Companies
(NASSCOM)
(India)
François Bourguignon is Chair of the GDN Board. He is also emeritus
professor of economics at the Paris School of Economics. He has been the
director of the Paris School from 2007 to 2013. Before that he was the chief
economist and senior vice-president of the World Bank in Washington. He
spent most of his research career as a professor at the Ecole des Hautes
Etudes en Sciences Sociales in Paris. His work bears mainly upon inequality
and corrective policies in developed and developing countries as well as at
the global level.
Prof. Bourguignon has authored a large number of academic papers and
books. He has received several awards and merits for his works. He is also
active in the international development community, lecturing and advising
leading international agencies as well as governments.
François
Bourguignon
GDN, Board Chair;
Prof Emeritus, Paris
School of Economics; and
former Chief Economist,
World Bank
(France) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
142
Hanan Morsy has extensive experience of leading top-quality economic
research, policy dialogue and development work for international �nancial
institutions, including the IMF, the European Bank for Reconstruction and
Development, the African Development Bank and the private sector. She is
a global economic and public policy expert who has provided quantitative
policy analysis to governments around the world on macroeconomic, �scal
and �nancial issues as well as on private sector development and structural
reforms.
Dr. Morsy was the Director of Macroeconomic Policy, Forecasting and
Research Department at the African Development Bank (AfDB). Before
joining the AfDB, she was the Regional Lead Economist for Southern
and Eastern Mediterranean at the European Bank for Reconstruction and
Development. Prior to that, she worked at the IMF (2003 – 2012) across
different departments including Fiscal Affairs, Middle East and Central Asia,
European, and Monetary and Capital Markets, as well as Advisor to Executive
Director.
She holds a PhD in Economics from the George Washington University, a
Masters in Economics from the University of California and a Bachelor in
Economics and Computer Science from the American University in Cairo,
Egypt.
Hanan Morsy
Deputy Executive
Secretary and Chief
Economist, United
Nations Economics
Commission for Africa
(Ethiopia)
Haroon Bhorat is Professor of Economics and Director of the Development
Policy Research Unit (DPRU), University of Cape Town (UCT) and is one of
the most cited South African economists globally. He currently serves on the
Presidential Economic Advisory Council (PEAC), established by President
Ramaphosa to generate new ideas for economic growth, job creation and
addressing poverty in South Africa. Prof. Bhorat holds the DST/NRF SARChI
Chair in Economic Growth, Poverty and Inequality Research. He is a Non-
resident Senior Fellow at the Brookings Institution; a Research Fellow at IZA,
the Institute for the Study of Labour in Bonn; and is a member of the UCT
College of Fellows.
Prof. Bhorat sits on the editorial advisory board of the World Bank Economic
Review, and he is a Board Member of the National Research Foundation
(NRF) and UNU World Institute for Development Economics Research (UNU-
WIDER), previously sitting on the HSRC Board. He was conferred a PhD in
Economics at Stellenbosch University, studied at the Massachusetts Institute
of Technology, and was a Cornell University research fellow.
Haroon Bhorat
Professor, University of
Cape Town
(South Africa) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
143
Homi Kharas is a senior fellow in the Center for Sustainable Development,
housed in the Global Economy and Development programme at the
Brookings Institution, Washington DC. In that capacity, he studies policies
and trends in�uencing developing countries, including aid to poor countries,
the emergence of the middle class, and global governance and the G-20.
He previously served as interim vice president and director of the Global
Economy and Development program.
He served as the lead author and executive secretary supporting the High-
Level Panel co-chaired by President Sirleaf, President Yudhoyono and Prime
Minister Cameron, advising the U.N. Secretary General on the post-2015
development agenda (2012-2013). The report, “A New Global Partnership:
Eradicate Poverty and Transform Economies through Sustainable
Development,” was presented on May 30, 2013.
Prior to joining Brookings, Dr. Kharas spent 26 years at the World Bank,
serving for seven years as Chief Economist for the World Bank’s East
Asia and Paci�c region and Director for Poverty Reduction and Economic
Management, Finance and Private Sector Development, responsible for the
Bank’s advice on structural and economic policies, �scal issues, debt, trade,
governance, and �nancial markets.
Homi Kharas
Senior Fellow, Center for
Sustainable Development,
Brookings institution
(USA)
Jayant Sinha is Member, Global Advisory Board, Observer Research
Foundation. He is the Chairperson of the Parliamentary Standing Committee
for Finance and a Member of Parliament from Hazaribagh, Jharkhand. In the
past, he has served as Minister of State for Finance and Civil Aviation.
Prior to his career in public service, Mr. Sinha was a venture capitalist. He has
degrees from the Harvard Business School, University of Pennsylvania, and
Indian Institute of Technology, Delhi.
Jayant Sinha
Member of Parliament &
Chair of Parliamentary
Standing Committee on
Finance
(India) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
144
Jean-Louis Arcand is a Canadian economist and professor of economics at
the Graduate Institute of International and Development Studies in Geneva,
as well as an af�liate professor at the Université Mohammed VI Polytechnic
in Rabat. He is a Founding Fellow of the European Development Research
Network (EUDN), a Senior Fellow at the Fondation pour les études et
recherches en développement international (FERDI) and has been a Visiting
Professor at Renmin University of China in Beijing, Universidade Federal da
Bahia and several universities in Africa and the Caribbean. He was assistant
and then Associate Professor at the University of Montréal, and Professor
at the Centre d’études et de recherches en développement international
(CERDI).
Jean-Louis holds a PhD in Economics from the Massachusetts Institute
of Technology (MIT), an MPhil from Cambridge University and a BA (high
honors) from Swarthmore College. He became the president of GDN in
January 2023.
Jean-Louis Arcand
President, Global
Development Network
(GDN)
(Switzerland)
Jessica Seddon is currently a Senior Fellow, Yale Jackson School of Global
Affairs. She is a co-founder of The Institutional Architecture Lab (TIAL) and
Senior Fellow at Artha Global, a networked policy consulting organisation
that supports governments in the developing world to design, implement,
and institutionalise policy frameworks that promote prosperity, stability, and
resilience. She is also an Adjunct Fellow with the Chair in U.S.-India Studies at
the Center for Strategic and International Studies (CSIS) and serves on the
academic council of the Indian School of Public Policy in New Delhi.
Dr. Seddon has most recently focused on governance of various aspects of
the atmosphere, from climate change to air quality to climate intervention. She
built and led the global air quality program at the World Resources Institute
(WRI) and co-chairs the Global Air Quality Forecasting and Information
Services initiative of the World Meteorological Organisation.
She has published book chapters and articles on infrastructure, Indian political
economy, information technology and governance, environmental regulation,
and other institutional design topics in international academic and policy
venues. Dr. Seddon earned her Ph.D. in political economy from Stanford
University Graduate School of Business and her B.A. in government and Latin
American studies from Harvard University.
Jessica Seddon
Senior Fellow, Yale
Jackson School of
Global Affairs
(USA) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
145
Kapil Kapoor an Indian national, is the Regional Director for the Asia
Regional Of�ce of the IDRC. Dr. Kapoor has over 30 years’ experience
in international development, specialising in Africa and Asia. He was the
Director General for Southern Africa, at the African Development Bank,
where he was responsible for the Bank’s projects and programs across 13
countries in Southern Africa. He has also served as the Director for Strategy
and Operational Policies at the Bank, where he led the preparation of
the Bank’s Long-Term Strategy for Africa, and the Bank’s Private Sector
Development Strategy.
Dr. Kapoor has held a series of senior positions with the World Bank Group,
including the World Bank’s Representative for Uganda and Zambia and
the World Bank’s Sector Manager for its poverty reduction, economic
management and governance programme in Asia.
Kapil holds a PhD degree in Economics from The George Washington
University and an MBA degree in Finance.
Kapil Kapoor
Regional Director-
Asia, International
Development Research
Centre (IDRC)
(India)
Manjeev Singh Puri joined the Indian Foreign Service in 1982 and has served
as Ambassador of India to the European Union, Belgium, Luxembourg,
Nepal and as Ambassador/Deputy Permanent Representative of India to
the UN. In addition, he has served twice in Germany (in Bonn and Berlin), in
Cape Town, Muscat, Bangkok and Caracas.
From 2005 to 2009, he headed the UN-Economic & Social Affairs- Division
in the Ministry of External Affairs of India and led the Indian delegation for
the �rst meeting of the Global Forum on Migration and Development in
Brussels in July 2007 and the presentation of various reports by India at the
Human Rights Council. During 2011-2012, when India served on the Security
Council, he was a senior member of its delegation.
Major areas of his experience and professional focus relate to the
environment, in particular climate change and sustainable development.
Mr. Puri was a lead negotiator for India at the UN on issues relating to the
SDGs and at the UN Conference on Sustainable Development held in Rio de
Janeiro, Brazil in June 2012.
Puri has a Master’s degree in Management and a BA (Honours) in Economics
from St. Stephen’s College, Delhi. He is a Distinguished Fellow and on the
Advisory Board of TERI.
Manjeev Singh Puri
Distinguished Fellow,
Earth Science and
Climate Change,
The Energy and
Resources Institute
(India) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
146
Mari Pangestu was the World Bank Managing Director of Development
Policy and Partnerships. In this role, Dr. Pangestu provided leadership and
oversight of the research and data group of the World Bank (DEC), the work
programme of the World Bank’s Global Practice Groups, and the External
and Corporate Relations function. She joined the Bank with exceptional
policy and management expertise, having served as Indonesia’s Minister of
Trade from 2004 to 2011 and as Minister of Tourism and Creative Economy
from 2011 to 2014.
Dr. Pangestu has a vast experience of over 30 years in academia, second
track processes, international organisations and government working
in areas related to international trade, investment and development in
multilateral, regional and national settings.
She also served as a Senior Fellow at the Columbia School of International
and Public Affairs, Professor of International Economics at the University of
Indonesia, Adjunct Professor at the Lee Kuan Yew School of Public Policy
and Crawford School of Public Policy, Australian National University and
a Board Member of the Indonesia Bureau of Economic Research (IBER)
and the Centre for Strategic and International Studies (CSIS), Jakarta.
She obtained her bachelor’s and master’s degree in economics from the
Australian National University, and her doctorate in economics from the
University of California at Davis.
Mari Pangestu
Former Managing
Director (MD),
The World Bank
(Indonesia)
Nagesh Kumar is the Director and Chief Executive of the Institute for Studies
in Industrial Development (ISID), a New Delhi-based public-funded policy
think-tank. He is also a Non-Resident Senior Fellow of the Boston University
Global Development Policy Centre, Boston, Mass. USA. Prior to joining ISID
in May 2021, Dr. Kumar served as Director at UN-ESCAP, Bangkok for 12
years. During 2002-09, he served as the Director-General of the Research
and Information System for Developing Countries (RIS), a policy think-tank
of the Indian Government.
Dr. Kumar has also served as an Economist at UNU/MERIT, Maastricht, the
Netherlands during 1993-98. Prof Kumar has served on the Boards of the
Export-Import Bank of India, ICTSD Geneva, and SACEPS Kathmandu, and
as a consultant for the World Bank, ADB, ILO, and UNCTAD, among other
international organisations. A PhD from the Delhi School of Economics,
he received the Exim Bank’s �rst International Trade Research Award and
the GDN’s Research Medal. He has authored 18 books and over 120 peer-
reviewed papers.
Nagesh Kumar
Director and Chief
Executive of the Institute
for Studies in Industrial
Development (ISID)
(India) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
147
Nandan Nilekani is the Co-Founder and Chairman of Infosys Limited. He was
the Founding Chairman of the Unique Identi�cation Authority of India (UIDAI)
in the rank of a cabinet minister from 2009- 2014. Mr. Nilekani has also co-
founded and is the Chairman of EkStep Foundation, a not-for-pro�t effort to
create a learner centric, technology-based platform to improve basic literacy
and numeracy for millions of children. In Jan 2023, he was appointed as the
co-chair of the G20 Task Force on Digital Public Infrastructure for Economic
Transformation, Financial Inclusion and Development.
Born in Bengaluru, Mr. Nilekani received his Bachelor’s degree from IIT
Bombay. In 2005 he received the prestigious Joseph Schumpeter prize for
innovative services in economy, economic sciences and politics. In 2006,
he was awarded the Padma Bhushan. He was also named Businessman of
the year by Forbes Asia. Time magazine listed him as one of the 100 most
in�uential people in the world in 2006 & 2009. Foreign Policy magazine
listed him as one of the Top 100 Global thinkers in 2010. In 2014, He won
The Economist Social & Economic Innovation Award for his leadership of
India’s Unique Identi�cation initiative (Aadhaar). He has been inducted
as International Honorary Member of the American Academy of Arts and
Sciences in 2019.
Mr. Nilekani is the author of “Imagining India”, co-author of “Rebooting India:
Realising a Billion Aspirations” and “The Art of Bitfulness: Keeping calm in the
digital world.”
Nandan Nilekani
Chairman and Co-
founder, Infosys Ltd.,
Bangalore and Founding
Chairman UIDAI
(Aadhaar)
(India)
N.K. Singh is a prominent economist, academician, and policymaker with a
notable career in India. He currently holds the positions of President of the
Institute of Economic Growth and Chairman of the 15
th
Finance Commission.
Prior to this, he chaired the Fiscal Responsibility and Budget Management
Review Committee (FRBM). Mr. Singh served as a member of the Rajya
Sabha, the Upper House of the Parliament, from 2008 to 2014, contributing
to various in�uential Parliamentary Standing Committees.
Before entering politics and �scal policy leadership, Mr. Singh had a
distinguished tenure in the Indian Administrative Services. He held key
roles such as Expenditure Secretary, Revenue Secretary, and Secretary to
the Prime Minister of India. He played a signi�cant part in India’s economic
reforms of 1991, leading negotiations with international organisations like
the World Bank and the IMF. As an accomplished author, Mr. Singh has
written several insightful books.
N. K. Singh
Chairman Finance
Commission, and
President, Institute
of Economic Growth
(India) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
148
Otaviano Canuto is currently a Senior Fellow at Policy Center for the New
South and a Non-Resident Senior Fellow at Brookings Institute. Before
that, Dr. Canuto worked at multilateral institutions for 15 years. As the Vice
President for Poverty Reduction and Economic Management of the World
Bank Group, he and his team were responsible for policy advice in areas
such as trade, public sector management and governance, public debt
management, gender equality, and poverty reduction.
As the Vice President for Countries at the Inter-American Development
Bank, he was responsible for client management and relationships with
member governments. He also occupied positions as an Executive Director
of the boards of the IMF and of the World Bank, where he overviewed
operations and policies implemented by both institutions. Dr. Canuto has
been Deputy Minister for international affairs at Brazil’s Ministry of Finance,
as well as a professor of economics at the University of São Paulo (USP)
and the University of Campinas (UNICAMP).
Otaviano Canuto
Senior Fellow, Policy
Center for the New South
(Brazil)
Paul Samson has more than 30 years of experience across a range of
global policy issues, working with international partners from around the
world. He is currently focused on the transformation of the global economy
through digitisation, scenarios for an evolving world order and institutional
global governance challenges. During the 24 years with the Government
of Canada, Dr. Samson’s positions included Director General of Strategic
Policy at the former Canadian International Development Agency and
Assistant Deputy Minister-level roles with Global Affairs Canada and with
International Trade and Finance, Finance Canada.
At the Privy Council Of�ce, he held several positions during the tenure of
three different Prime Ministers. He also previously served on the Board of
Directors for the Centre for International Governance Innovation. Before
completing his doctorate (1996) and MA (1991) in International Relations at
the Geneva Graduate Institute, Dr. Samson earned a BA at the University of
British Columbia. He completed postdoctoral studies in global environment
assessment at Harvard University.
Paul Samson
President, Center for
International Governance
Innovation (CIGI),
(Canada) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
149
Peter Drysdale is widely recognised as the leading intellectual architect of
Asia-Paci�c Economic Cooperation (APEC). He is the author of a number of
books and papers on international trade and economic policy in East Asia
and the Paci�c, including his prize-winning book, International Economic
Pluralism: Economic Policy in East Asia and the Paci�c.
Prof. Drysdale is the recipient of the Asia Paci�c Prize, the Weary Dunlop
Award, the Japanese Order of the Rising Sun with Gold Rays and Neck
Ribbon, the Australian Centenary Medal and a member of the Order of
Australia.
Peter Drysdale
Emeritus Professor of
Economics and Head of
the East Asian Bureau
of Economic Research,
Australian National
University
(Australia)
Poonam Gupta is the Director General of National Council of Applied
Economic Research (NCAER) and a member of the Economic Advisory
Council to the Prime Minister (EAC-PM). Before joining NCAER, she was
the Lead Economist, Global Macro and Market Research at the International
Finance Corporation; and the Lead Economist for India at the World Bank.
Before this, Dr. Gupta has been a Reserve Bank of India Chair, professor
at the National Institute of Public Finance and Policy, professor at the
Indian Council for Research on International Economics Relations (ICRIER),
Associate Professor in the Department of Economics at the Delhi School of
Economics, and an Economist at the IMF.
Her research has been published in leading scholarly journals and featured
in The Economist, The Financial Times, and The Wall Street Journal. She
holds a PhD in International Economics from the University of Maryland,
USA and a Masters in Economics from the Delhi School of Economics,
University of Delhi.
Poonam Gupta
Director General,
NCAER & Member of
the Economic Advisory
Council to the Prime
Minister (EAC-PM)
(India) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
150
Ram Madhav is an Indian politician, social leader, author and thinker. In over
a decade of India Foundation’s existence, Dr Madhav has been the curator of
major annual global and national multilateral initiatives like the Indian Ocean
Conference, the Dharma-Dhamma Conference, ASEAN-India Youth Summit
and Counter Terrorism Conference involving heads of nations and leaders
of governments besides academics, scholars and public-spirited individuals.
Most recently, He has been instrumental in ideating the Religion-20 Forum
(R20) as part of India’s presidency of the G20.
Previously, Dr. Madhav has served as the National General Secretary of the
Bharatiya Janata Party (BJP) during 2014-20 responsible for handling the
political affairs of Jammu & Kashmir, Assam and other North-Eastern states
of India. A renowned author and thinker, he has over 300 publications to his
credit. He has authored several books in English and Telugu.
Ram Madhav
President,
India Foundation (IF)
(India)
Ramesh Chand is currently Member, NITI Aayog, in the rank and status of
a Union Minister of State. He has a PhD in agricultural economics from the
Indian Agricultural Research Institute (IARI), New Delhi. He is a Fellow of
the National Academy of Agricultural Sciences and the Indian Society of
Agricultural Economics. He has been involved in policy formulation for the
agriculture sector for the past two and a half decades. Prior to joining NITI
Aayog, he was Director, National Institute of Agricultural Economics and
Policy Research, New Delhi.
Prof. Chand has worked in senior academic positions across India, Australia,
and Japan. He has also been a consultant with serveral international
organisations. He has chaired important committees on food and agricultural
policies set up by various Ministries of the Government of India. Prof. Chand
has served as India’s nodal of�cer for agriculture for SAARC for 7 years and
represented the country in meetings of G20, UNESCAP.
He has been presented with the Jawaharlal Nehru Award (1984), Ra� Ahmad
Kidwai Award (2006) of the Indian Council of Agricultural Research, and
the Atal Bihari Vajpayee Award (2018) by the Indian Economic Association.
Ramesh Chand
Member, NITI Aayog
(India) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
151
Robert Lawrence is a Senior Fellow at the Peterson Institute for International
Economics, and a Research Associate at the National Bureau of Economic
Research. He currently serves as Faculty Chair of The Practice of Trade
Policy executive program at Harvard Kennedy School. He served as a
member of the President’s Council of Economic Advisers from 1998 to
2000. Lawrence has also been a Senior Fellow at the Brookings Institution.
He has taught at Yale University, where he received his PhD in economics.
His research focuses on trade policy.
Prof. Lawrence has served on the advisory boards of the Congressional
Budget Of�ce, the Overseas Development Council, and the Presidential
Commission on United States-Paci�c Trade and Investment Policy.
Robert Lawrence
Albert L. Williams
Professor of International
Trade and Investment
Harvard University
(USA)
Robert Stavins is Director of the Harvard Environmental Economics Program
and Harvard Project on Climate Agreements. He is a University Fellow,
Resources for the Future; Research Associate, National Bureau of Economic
Research; elected Fellow, Association of Environmental and Resource
Economics; Member, Board of Directors, Resources for the Future; and
Editor, Journal of Wine Economics. Robert was Chairman, Environmental
Economics Advisory Board, U.S. Environmental Protection Agency. He was
a Lead Author, Second and Third Assessment Reports, Intergovernmental
Panel on Climate Change, and Coordinating Lead Author, Fifth Assessment
Report.
His research has examined diverse areas of environmental economics and
policy, and appeared in more than a hundred articles in academic journals
and popular periodicals, plus a dozen books. Prof. Stavins holds a B.A. in
philosophy from Northwestern University, an M.S. in agricultural economics
from Cornell, and a Ph.D. in economics from Harvard.
Robert Stavins
A.J. Meyer Professor,
Energy and Economic
Development, Harvard
University
(USA) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
152
Sachin Chaturvedi works on issues related to development economics,
involving development �nance, SDGs and South-South Cooperation, apart
from trade, investment and innovation linkages with special focus on WTO.
Prof. Chaturvedi has persistently endeavoured to build up institutions and
launching of networks, both at national and international levels. He is credited
with the launch of Network of Southern Think Tanks (NeST) and Forum for
Indian Development Cooperation (FIDC). He has also created “Delhi Process”, a
major forum for exchange of ideas on South-South and triangular Cooperation.
Currently, he is also Vice Chairman, Atal Bihari Vajpayee Institute of Good
Governance and Policy Analysis; and ex-of�cio Vice Chairman of Madhya
Pradesh State Policy and Planning Commission. Prof. Chaturvedi is an
Independent Director on the Board of Reserve Bank of India.
Sachin Chaturvedi
Director General
Research and Information
System for Developing
Countries (RIS)
(India)
Santiago Levy is a non-resident senior fellow with the Global Economy and
Development Program at Brookings. He was previously president of the
Latin American and Caribbean Economic Association (LACEA). From 2008
to 2018 he was the Vice President for Sectors and Knowledge at the Inter-
American Development Bank (IDB). From 1994 to 2000, Dr. Levy served as
the deputy minister at the Ministry of Finance and Public Credit of Mexico.
He has also held positions across government and academia, including:
General Director, Mexican Social Security Institute; President, Federal
Competition Commission; Director for deregulation, Ministry of Industry
and Trade; Associate Professor of Economics (tenured), Boston University;
Economics Professor, Instituto Tecnológico Autónomo de México.
Dr. Levy has received several prestigious awards in Economics and has
published six books, 24 articles in academic journals, and 20 book chapters
on economic growth and productivity, social policy, informality, education
budgetary and tax policy, trade policy reform, rural and regional development,
competition policy, labour markets, and policies for poverty alleviation.
He holds a doctorate in economics and a master’s degree in political
economy from Boston University, in addition to an honorary post-doctorate
from Cambridge University.
Santiago Levy
Non-resident Senior
Fellow, Brookings
Institution
(Mexico) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
153
BVR Subrahmanyam joined as Chief Executive Of�cer of NITI Aayog on
25.02.2023.
An Indian Administrative Service Of�cer of 1987 batch (Chhattisgarh
cadre), Mr. Subrahmanyam has held important assignments over the last
three decades in Madhya Pradesh, Chhattisgarh, and Jammu & Kashmir,
along with a stint at The World Bank. He has been Secretary in the Ministry
of Commerce & Industry, Chief Secretary, Jammu & Kashmir, Principal
Secretary, Government of Chhattisgarh, and has held positions in the Prime
Minister’s Of�ce.
BVR
Subrahmanyam
CEO, NITI Aayog
(India)
Suman Bery is currently Vice Chairperson, NITI Aayog, in the rank and
status of a Cabinet Minister. An experienced policy economist and research
administrator, Mr. Bery took over as NITI Aayog Vice Chairperson from 1 May
2022. At the time of his appointment, Mr. Bery was a Global Fellow in the
Asia Programme of the Woodrow Wilson International Centre for Scholars
in Washington D.C. and a non-resident fellow at Bruegel, an economic policy
research institution in Brussels. He was also a member of the Board of the
Shakti Sustainable Energy Foundation, New Delhi.
From early 2012 till mid-2016, Mr. Bery was Royal Dutch Shell’s global Chief
Economist based in The Hague. Before his appointment at Shell, Mr. Bery
served as Director-General (Chief Executive) of the National Council of
Applied Economic Research (NCAER) in New Delhi. In his decade leading
NCAER, Mr. Bery was at various times member of the Prime Minister’s
Economic Advisory Council; of India’s Statistical Commission; and of the
Reserve Bank of India’s Technical Advisory Committee on Monetary Policy.
Prior to NCAER, Mr. Bery was with the World Bank in Washington D.C.
He has a master’s degree in public affairs from Princeton University’s School of
Public and International Affairs, and an undergraduate degree in philosophy,
politics and economics from Magdalen College, University of Oxford.
Suman Bery
Vice Chairperson,
NITI Aayog
(India) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
154
Surjit Bhalla is the former Executive Director for India, Sri Lanka, Bangladesh,
and Bhutan at the IMF. He was earlier a member of the Prime Minister’s
Economic Advisory Council and Chairman of Oxus Research & Investments
in New Delhi. Dr. Bhalla has worked as a research economist at the Rand
Corporation, the Brookings Institution, in the Research and Treasury
departments of the World Bank, and as a consultant to Warburg Pincus. He
has worked on Wall Street at Deutsche Bank and at Goldman Sachs.
He is the author of several academic papers and books. He is a regular
contributor to Indian newspapers, magazines, and television on �nancial
markets, economics, politics and cricket. Dr. Bhalla has an MPA and PhD in
Economics from Princeton University, and a Bachelor’s degree in Electrical
Engineering from Purdue University
Surjit Bhalla
Former Executive
Director for India, Sri
Lanka, Bangladesh and
Bhutan, IMF
(India)
Tao Zhang has been Chief Representative of the BIS Of�ce of Asia and the
Paci�c since September 2022. As a member of the BIS senior management,
he takes lead in its activities in Asia and the Paci�c. Dr. Zhang has extensive
experiences both in international arena and at the national level in China. He
served as Deputy Managing Director of the IMF in Washington, DC during
2016-2021. In that capacity, he oversaw the Fund’s engagement with more
than 100 member countries and had a wide portfolio, ranging from �nancial
stability policies, �ntech and digital currencies, climate �nancing and
sustainable growth, to engagement with other international organisations.
Earlier in his career, he had worked as an economist at the World Bank
and the Asian Development Bank. Dr. Zhang also held senior positions
in China, including Deputy Governor of the People’s Bank of China, and
Chairman of the Supervisory Board at the People’s Insurance Company
(Group) of China Limited. He has a Ph.D. in International Economics from
the University of California, Santa Cruz, USA, and a bachelor’s degree from
Tsinghua University, China.
Tao Zhang
Chief Representative
for Asia and the Paci�c,
Bank of International
Settlements (BIS)
(China) A GREEN AND SUSTAINABLE GROWTH AGENDA FOR THE GLOBAL ECONOMY
155
Vijay Kumar Saraswat is Member, NITI Aayog, renowned for his extensive
experience in defense research encompassing both fundamental and applied
sciences. Having served as the Secretary of the Defense Research and
Development Organisation (DRDO), he has made remarkable contributions
to the indigenous development of missiles like Prithvi, Dhanush, Prahaar,
and Agni-5, as well as the two-tiered Ballistic Missile Defence system.
Dr. Saraswat played a pivotal role in establishing infrastructure to support the
Nuclear Doctrine, developing cyber security technologies, and enhancing
the nation’s defense capabilities against ballistic missile threats.
Furthermore, he has been actively involved in the development of alternative
energy systems, such as clean coal technologies, concentrated solar power
systems, and bioenergy- and hydrogen-based economies.
At NITI Aayog, Dr. Saraswat has initiated the Methanol Economy initiative,
aiming to utilise methanol for transportation, energy generation, and chemical
production. Additionally, he has chaired committees on technical textiles and
body armor, contributing to the futuristic growth of these sectors in India.
Dr. Saraswat’s outstanding achievements have been recognised through
numerous awards, including the Padma Shri and Padma Bhushan, as well as
honorary doctorates from over 25 universities.
Vijay Kumar
Saraswat
Member, NITI Aayog
(India)
Vinod Kumar Paul is Member, NITI Aayog, where he leads the Health,
Nutrition and Education verticals. He has been a key catalyst for a number
of �agship schemes of the Government including Ayushman Bharat PMJAY,
the world’s largest health assurance programme covering over 600 million
people.
Dr. Paul has been a part of the core team of the Union Government for
Covid- 19 pandemic response as the chair of the National Task Force as well
as of the National Expert Group on Vaccine Administration for COVID-19
(NEGVAC).
He was conferred with the prestigious Ihsan Dogramaci Family Health
Foundation Prize by WHO at the 2018 World Health Assembly for his
globally recognised service in the �eld of family health.
Vinod Kumar Paul
Member, NITI Aayog
(India) Notes Notes Designed by: