The strategy of multilateralism maintains and strengthens rules-based international order promoting inclusivity of multiple actors, economic development, global health, human rights, international security, and climate change mitigation. These global issues can only be dealt with successfully through coordinated multilateral actions. It was clear after the horrors of the World War II that multilateralism was the only way to global peace and security and shared prosperity and destiny, enshrined in the United Nations system, Bretton Woods institutions, G20 or the Shangri-La Dialogues.

Over the course of time, several multilateral institutions have promised to address global issues and challenges and kept developing in relation to the scope of participants, evolving challenges and major powers. The G7 forum reflected the desire of the advanced economies to come together to tackle the global economic conditions of oil crisis in the early 1970s. The establishment of G20 forum then captured the significance of emerging economies in the international political economy in the 1980s and 1990s which were not involved in any international financial forums. G20 constitutes all advanced economies of G7 and the European Union alongside emerging economies such as China, Brazil, India, Mexico, and South Africa. In 2021, summits of G7 and G20 committed to equipping countries with Covid-19 vaccines across the world in order to overcome the global health crisis during the pandemic. Now G20 finds a much greater resonance presently in finding global solutions to global issues.

The rise of Asia is evident by the fact that its economy exceeds the rest of the world combined. It was a different scenario during the Cold War era when the Global South demanded for a restructuring of the Bretton Woods System. The Group of 77 and UNCTAD discussed the New International Economic Order (NIEO), which was a set of proposals put forward during the 1970s to improve the terms of trade in favour of the Third World. Thus, multilateralism, as a strategy, has been the means to economic growth, for instance, in 2001, China’s accession to the World Trade Organization (WTO) brought itself robust export-led economic growth.

In terms of abating global economic downturn, G20 has shown great enthusiasm since its formation. It is reported that 60% of low-income countries are already in debt distress or at high risk due to the Covid-19 pandemic and one-fourth of emerging economies are at high risk. As of May 31, 2023, 25 countries are at high risk, 11 in debt distress, 26 at moderate risk, and seven at low risk of debt distress, according to the Debt Sustainability Analysis of the International Monetary Fund (IMF). Earlier, G20 approved the Debt Service Suspension Initiative (DSSI) in April 2020 to ease the debt situation of 76 poor countries. In December 2021, DSSI was discontinued removing the temporary delay of debt payments making these countries – which led to the failure of DSSI. Besides, the contribution from the private sector creditors were lacking toward this which made the DSSI ineffective. Thus, these measures were not enough for low- and middle-income countries which were previously suffering a blow to their sovereign debts amidst the rising dollar fluctuation due to the Ukraine-Russia war.

In 2021, in order to improve the debt conditions G20 established a Common Framework for Debt Treatments to restructure debt for these countries. The G20 Capital Adequacy Review has proposed to increase the lending capacity of the Multilateral Development Banks (MBD) since there are inadequate funds with the international financial institutions. However, China alone constitutes the biggest bilateral lender to several countries which lacks transparency in the lending process. It is an outlier to the current efforts in debt restructuring. China’s unwillingness to write off the debts it owes to these countries creates a deadlock to the current efforts by the IMF, World Bank, and G20. India’s finance minister Sitharaman stated during a meeting of the MBD roundtable in Washington in April 2023 that debt transparency, information-sharing, and comparability of debt relief are critical to manage the debt crisis. G20 can come up with an effective strategy to fill this funding gap. Thus, a huge challenge lies in front of the G20 to prevent economic collapse in countries with arrears or cutbacks in priority expenditures.

Representing two-thirds of the global population, G20 represents the interests of the Global South. G20 has to play a significant role in reforming the international institutional order using its economic strength to finance the social and economic transformation of poor economies and societies. The 2007/2008 financial crisis continues to make the banking sector vulnerable. Adding to the woes, the pandemic created unprecedented global economic challenges which require strengthened and reinvigorated multilateral cooperation. But we had seen in the past how multilateral cooperation could fail at the WTO which found itself unable to complete the 2001 Doha Round. The rise of nationalism, for instance, Trump’s ‘America First’ in the United States (US). led to the declaration of the trade war against China and accused China of currency manipulation that ultimately affected global trade. Moreover, the geopolitical interests in the Ukraine-Russia war have been stretched into the G20 cooperation between the West and Russia.

A loophole in the G20 architecture is that it is a growth-driven multilateral forum. G20’s role in climate change efforts focuses on select areas needed by the members of advanced and emerging economies. By leaving out the “Vulnerable Twenty”, it reveres per se an elite grouping of advanced and emerging economies. The United Nations Future Forum, which focuses on mobilising international support measures and action towards LDCs in sub-Saharan Africa and other regions, requires the active support and participation of G20 in its endeavor to build economic resilience and sustainability in these countries as well as increase their share in global trade. The G20 forum without actively participating in such a platform for poorer countries can be shallow in their approach to bringing global solutions. Further, the G20 conditions for climate finance are not fixed but arbitrary making it vulnerable to donor’s political determinations. It, thus, produces a concern in its global economic outlook particularly when inflation of essential commodities at the global scale combines with the debt conditions.

Nonetheless, G20 is the result of the changing nature of international politics which attempts to transform the agenda and structure of international institutions. It carries forward as an emerging resilient and inclusive international system to global challenges. G20 can broaden its outlook in making an inclusive system of vulnerable and poorer countries.

Then, another dimension of multilateral cooperation is the construction of a common security architecture. The Association of Southeast Nations (Asean) multilateralism has demonstrated how to negotiate into building successful collective peace in the Indo-Pacific region, thereby, attracting several regional security groupings with Asean-centrality as in Asean Regional Forum, East Asia Summit, Asean Defence Ministers Meeting Plus, Shangri-La Dialogue, and Shanghai Cooperation Organisation. The Shangri-La Dialogue presents opportunities for major and small powers to express their competing visions for the future of Asian security. The Singaporean, American, Japanese, Chinese, and Indian visions of regional security architecture are discussed at the Dialogue hosted by the non-governmental International Institute for Strategic Studies (IISS) in Singapore. The critical aspect of the Dialogue is that security visions led by the US and China pit against each other. Their visions hinge on the territorial disputes in the South and East China Seas. The US and Japan promote a free and open Indo-Pacific, while China is protective of its stands in the two Seas which hold the key to its regional security architecture. It is worthwhile to watch if these competing visions can reorient themselves and balance the power rivalries for Asian security.

Singapore, on the other hand, projects the security perspective devoid of the ‘zero-sum’ game. The formation of AUKUS security framework has Asean States worried about the increasing rivalry between the US and China in the Indo-Pacific region. It deviates from the Asean-centrality as the paramount regional security feature.

In 2019, former German chancellor Angela Merkel forcefully argued at the World Economic Forum in Davos for a greater commitment to multilateralism, the absence of which will end in ‘misery’. She appealed for the reformation of multilateral institutions and the removal of ‘disturbances’ and ‘insecurities’ that exist in these institutions resulting in the declined global economic growth. It is, thus, quintessential for these multilateral forums to proactively complete their tasks before separate sets of challenges to the global economy and security begin to emerge.

This article is authored by Mehdi Hussain, doctoral candidate, Centre for South Asian Studies, Jawaharlal Nehru University, New Delhi.