Most of the global challenges have not been created by the Global South, but they affect us more, as has been obvious in the impact of Covid-19 pandemic, climate change, terrorism and the Ukraine conflict, said Prime Minister Narendra Modi during his opening remarks at the Voice of Global South Summit that opened on Thursday.
“The world has turned the page on another difficult year,” he said, raising concern over “war, conflict, terrorism and geopolitical conflict, rising food, fertilisers and fuel prices” as well as “climate change”. It is in a state of crisis, he observed. The message was not lost. In exhorting the developing countries to unite and defend their rights, he also sent a warning to the developed nations that they would have to be accountable to the former. “We should also have equivalent voice. As the eight-decade old model of global governance slowly changes, we should try to shape the emerging order,” he said to the participating national leaders.
With three-fourths of the world population living in the Global South, the region has the largest stake in the future, he remarked. “People of the Global South should no longer be excluded from the future of development. Together we must attempt to redesign global, political and financial governance. This can remove inequalities, enlarge opportunities, support growth and spread progress and prosperity,” he stressed.
Modi’s stern stance on matters impacting the developing world is not without reason. The launch of Russia-Ukraine war sent fuel prices soaring and exacerbated inflationary pressure on countries that were either still reeling from pandemic-induced economic stress or had just started emerging out of it. Food security became a talking point globally with food prices shooting up under the direct impact of the war.
Russia, cornered by sanctions from the West which banned purchase of the former’s crude oil, offered it at subsidised rates to other nations and India grabbed the opportunity. When the West criticised it for not supporting Ukraine, India responded aggressively. External Affairs Minister S Jaishankar defended India’s decision to purchase Russian oil citing the country’s interest. “We do buy some energy, which is necessary for our energy security. But I suspect, looking at the figures, probably our total purchases for the month would be less than what Europe does in an afternoon,” he had famously said, calling out the West for its hypocrisy.
Industry estimates suggest that India saved more than Rs 35,000 crore by importing cheap Russian crude since February. In FY2021-22, India’s crude oil import basket had only 2 per cent Russian oil. But in first half of FY23, 16 per cent of India’s total oil import totalling 20 million tonnes, was from Russia. This was approximately 3.2 million tonnes. As per Reuters calculations, India purchased close to 40 per cent of all seaborne Russian Urals oil in November. Russia was India’s top oil supplier in November for the second consecutive month.
Buying Russian oil was a crucial geo-political win for India in the face of increased global pressure. India managed to save up on its import bill at a time when dollar was strengthening against the rupee and it had to pay more dollars for its imports. In the last year, Indian rupee fell close to Rs 81.50 as compared to Rs 73.21 a year ago, declining close to 10 per cent. The main reason for the strengthening of the dollar against other currencies was US Fed hiking rates to tame inflation to protect its economy. In December, US Fed increased the key lending rate to the highest level in 15 years.
A strengthening dollar directly impacts emerging markets, making imports more expensive. The US has been steadfast in keeping the interest of its own economy over that of nations which are adversely impacted by a strong dollar.
Climate change has been the most consistent global crisis in recent times. India has committed to reduce the emissions intensity of its Gross Domestic Product (GDP) by 45 per cent by 2030. However, Modi has also called upon rich countries to do more to achieve climate goals, considering that their share in creating the crisis is larger.
At the G20 summit on climate in 2020, he called for “climate justice” and said that India could not ignore the neglect of climate finance by the developed nations. Putting pressure on developing nations for climate action was not justice if there was no concrete progress on climate finance, he had emphasised.
Developed economies have a much higher carbon footprint than developing countries but have been pushing for the same goals to mitigate the impact of climate change. Poorer nations have a larger dependence on fossil fuels but they are now steadily reiterating the need for just transition.
The UN Conference on Trade and Development (UNCTAD) had in an October 2021 report noted that least developed countries (LCDs) “which bear the least historical responsibility for climate change, are on the front lines of the climate crisis, as epitomised by the fact that over the last 50 years, 69% of worldwide deaths caused by climate-related disasters occurred in LDCs”.
The same report said that adaptation to climate change was a pressing issue for LDCs, as they continued to face “severe challenges in accessing climate finance (notably for adaptation and climate-resilience measures, which still constitute a very small share of total climate finance)”.
Modi’s address put the spotlight on India as a strong representative of the Global South. He called upon the participating countries to call for a global agenda of “respond, recognise, respect and reform” where the rest of the world would have to respond to the priorities of the Global South, recognise that the principle of common but differentiated responsibilities applied to all global challenges and respect the sovereignty of all nations and look for peaceful resolution of differences and disputes. They would also have to reform international institutions, including the United Nations, to make them more relevant.
“In the last century, we supported each other in our fight against foreign rule. We can do it again in this century to create a new world order that will ensure the welfare of our citizens,” he told the leaders, making an apparent reference to colonisation by Western countries.
Modi has made it clear that priorities of the Global South are also the priorities of India and it is committed to amplifying the voice of these countries as it takes up the G20 presidency this year. Seen in the larger picture of India’s growing importance in the world economy, this commitment is more of a signal of a developing world getting ready to push back against the developed world.
