Ahead of the forthcoming G20 Summit due to be held on July 7-8, 2017, in Hamburg Rethinking Russia talked with Svetlana Lukash, Russia’s G20 Sherpa, about the current trends in globalization, digital economy and responsible leadership.
Svetlana, thank you for the opportunity to ask some questions. Should we have a closer look at the schedule drawn up for Germany’s G20 presidency from December 2016 to November 2017, we shall find almost 100 events held or events due. What is your overall assessment of the German G20 presidency?
SL: Thank you. Indeed, the year has been busy and eventful. It can partly be accounted for by the electoral campaign in Germany which left little time to prepare for the summit. Another reason is stronger focus on more substantial discussions in a number of areas. Moreover, German Chancellor Angela Merkel, who is eager to address traditional G20 issues, has added new items to the G20 agenda. First, the Group has traditionally paid much attention to finance and economy. The German presidency has prioritized an agreement on a sustainable global financial system. Moreover, the consensus has been reached on the principles to ensure the resilience of the G20 economies. It has contributed a lot to the overall coordination of the countries’ macroeconomic policies, which is central to the forum’s work.
The motto of the German G20 presidency has been “shaping an interconnected world”. What initiatives have been launched to promote multilateral cooperation?
SL: On the whole, globalization and trade have come to the forefront as they are high on the list of Merkel’s urgent priorities. We all agreed at the outset that this year’s forum would aim to clarify the benefits of globalization, evolving global trends, open markets, and free trade to people worldwide. It is common knowledge that recent developments, including the stance of the new US administration, have raised graver doubts about the future of the globalizing world. We have been witnessing a creeping protectionism. People in a number of states are in two minds whether to endorse free markets further or turn inward. However, the G20 and the global economic trends have generally proved that globalization is, first of all, an opportunity to raise living standards and to ensure inclusive as well as strong growth. The Group of Twenty is now preoccupied with adopting a unified approach to promote a rules-based multilateral trading system, with the WTO in its center providing the regulatory framework. This is good news that the US administration has adopted a more positive approach to the issue. Moreover, as far as we can see it, our partners also seek to ensure a successful WTO Ministerial Conference next year. We aspire to make the most of the Hamburg summit to capitalize on the favourable political developments, which will allow advancing in the areas where the consensus seems attainable, if not across the whole spectrum. The traditional agenda should be supplemented with two new major items, which have not yet been integrated into the list of matters to discuss. I mean investment facilitation and, in general, harmonized approaches to regulating investment regimes. The second issue is naturally digital trade and digital economy, which do not fall under the purview of WTO rules and norms. We consider these areas the most promising ones as globalization and trade issues are Russia’s top priorities for the Hamburg summit.
Which other issues that Russia considers its major priorities and which initiatives introduced under Russia’s G20 presidency in 2013 are discussed ahead of the summit?
SL: Emphasis is placed on financial regulation, where, I believe, G20’s work is particularly fruitful. The activities of the Financial Stability Board and cooperation of our financial regulators can be called the most outstanding achievement of the Group ever. It has allowed us to strengthen the financial system both at home and worldwide. I would also like to give prominence to tax issues, in particular, the Base Erosion and Profit Shifting (BEPS) Action plan. This achievement goes back to Russia’s G20 presidency in 2013 when the plan was adopted. At the moment it is jointly implemented by the G20 together with the help of the OECD. Another topical area, which gradually becomes an ever more prominent issue for the G20 and which Russia sees as its priority, is the development of digital economy. China last year added the issue of innovation and the impact of the new industrial revolution to the Group’s agenda for the first time in its history. The German presidency extended the issue further to address the impact of digital economy on economic growth and welfare, as well as the assessment, measurement and evaluation in digital economy and possible relevant agreements. This issue is undoubtedly a top priority for Russia nowadays since the digital economy will enable us to boost competitiveness and growth of the national economy. That is why we lay such heavy emphasis on this area and prioritize this work.
Following the US recent decision to withdraw from the Paris Climate Agreement, B20, C20, L20, T20, W20, Y20, and F20 adopted the first ever joint statement to comment on it. What will become of the agreements on sustainable development and efforts to combat climate change?
SL: Apart from economy and finance, digitalization, trade and globalization, the G20 is also concerned with shared responsibility for global climate and the implementation of the Paris Agreement. The G20, including Russia, is not going to alter its stance on the issue after the US decision. We consider the Agreement the main tool to reduce greenhouse gas emissions, adapt states to changing climate and, in general, to jointly contribute to sustainable development and green growth. We reaffirm that our commitments will be implemented at the national level and we plan to ratify the Paris Agreement in 2019. Climate change and sustainable energy development are undoubtedly central to our agreements within the UN Sustainable Development Goals framework agreed two years ago. For the G20 it is also a priority. We are trying to assist the UN in all possible respects. Last year the G20 Action Plan on the 2030 Agenda for Sustainable Development was adopted. This year the steps taken and some decisions have been reviewed to find the areas where we can contribute most through collective efforts. The list includes, above all, food security and sustainable agriculture, investment in infrastructure in the developing world, financial literacy and financial inclusion. Over the past years, the G20, particularly under Russia’s presidency, has achieved substantial progress on many fronts. Undoubtedly, it will keep on working to this end.
What modern humanitarian challenges has Germany suggested considering over the year?
SL: In terms of Germany’s G20 presidency, I would like to highlight several issues and initiatives put forward by Chancellor Angela Merkel. Firstly, the European community deems migration critically important and relevant. With both regular and irregular migrants flooding the continent, there is a need to draw a line between the two factors. As regards labor migration flows, they considerably benefit all hosting economies. In this respect, the G20 has this year placed great stress on migrants’ integration into the labour markets, protection of rights at work, and positive aspects of such labor mobility. As for refugees, they seek shelter in foreign countries whilst not necessarily having plans to find a job or become part of the economic landscape. Therefore, the G20 recent discussions have mainly revolved around the ways of ameliorating the plight of refugees and facilitating a burden sharing for accepting migrants. Moreover, the forum examined the means of safeguarding their rights and promoting the inclusion of migrants capable of contributing to our economies. At the same time, our ongoing, but greater emphasis on women’s empowerment has become another distinguishing feature of the year. I mean employment opportunities, social protection, gender pay gap, and social arrangements to allow, for instance, mothers with small children to effectively combine family life and work, which is now on the agenda of many international fora. As you know, two years ago the G20 launched the W20 to address the relevant problems more specifically. In 2017, many proposals by that “dialogue groups” have made their way to the G20’s official programs on the women’s issues and other matters.
How could you assess the outcomes of the recent outreach summits, particularly a new Science 20 format? Will it be possible to incorporate some of the recommendations into the outcome documents or the agenda of the Sherpa meeting?
SL: From my perspective, the notion of “outreach formats”, which we actively used during our presidency, is not quite correct. Actually, it would be better to refer to them as engagement groups, as they positively influence the G20 and increase its effectiveness. At the same time, the forum does not impose its views on these associations. Indeed, this year has seen our constructive partnership with engagement groups. Germany’s presidency has embraced Russia’s model of interacting with Business 20 (B20), Youth 20 (Y20), Civil 20 (C20), Labor 20 (L20), Women 20 (W20), and Think 20 (T20), with Science 20 recently launched. This means that their leaders and experts are invited to Sherpa meetings and join the G20’s working groups. In their turn, engagement groups comprise working sections tasked with exploring specific recommendations to reflect and build in the G20’s decisions and outcome documents. This year has witnessed the Group’s fruitful cooperation with B20, C20, and W20, with a great number of their suggestions incorporated into the summit’s draft outcome documents. Particular importance was as well attached to engagement with young people from the G20 member-states. Although a communiqué, unfortunately, was submitted somewhat later than we would have liked, Germany’s G20 presidency asked Sherpas to examine it. The paper, as it usually is, was replete with many interesting points. They may also find their way into the summit’s outcome documents.
As far as the globalization and digitalization bloc is concerned, one of the Y20 ideas – namely the necessity to establish the online rules of the game and some framework agreements on multilateral Internet governance – was communicated to Merkel. The German Chancellor, among others, said that everything should be subjected to certain regulations. Will the issue be included in the summit’s agenda as a separate item or a digitalization-related point?
SL: That is certainly a very good question. It is necessary to clarify digital economy issues. Despite our inability to define the phenomenon and assess its impact, scale and implications, the need for common principles of conduct is already clear. When it comes to our understanding of Internet regulation, I would like to stress two factors. On the one hand, this certainly entails security measures, personal information and data protection, or cyber intrusion prevention. On the other hand, this generally involves some rules and norms, for instance, in electronic trading or e-commerce. Actually, there are no domestic or international mechanisms that would allow scope for protecting customers’ rights and promoting competition in the sphere. These issues urgently require concerted efforts and settlement, as they are far less tackled than even the Internet security issues. Moreover, customers’ rights are closely entwined with digital literacy, which the Group has only started to deal with. We hope that Argentina’s G20 presidency will continue channeling its efforts into the realm next year. In fact, digital literacy is partly linked with financial literacy, an issue which the G20 member-states, especially Russia as the most active player, have always paid assiduous attention to. We hope that next year we will succeed in finding such solutions and balances which will enable countries to integrate their populations more effectively and teach them different skills to better adjust to today’s digital world.
The G20 leadership has been subject to some change. Does Russia’s delegation have a clear schedule of bilateral meetings?
SL: All the planned bilateral talks are currently under consideration. Undoubtedly, Russia’s President is expected to have a busy itinerary. Let’s wait till the Hamburg summit and we will see the nature and content of meetings.
Thank you for the interview. We wish you prolific work at the Sherpa meeting and the Hamburg summit.
SL: Thank you.
Photo used: Kremlin.ru