Official Spokesperson (Shri Syed Akbaruddin): Good afternoon friends and thank you very much for being here. We have here with us Mr. Suresh Prabhu, Minister of Railways, who is also the Sherpa of the Prime Minister for the G20 Summit. Along with him are two other colleagues who are the Sous Sherpas. This is Ms. Usha Titus who is the Sous Sherpa dealing with finance, and on my left is Mr. Charanjit who is theSous Sherpa dealing with other issues.
I will request Mr. Prabhu to make his opening remarks. He will try andsum for you Indian contribution to the G20 as well as the outcomes of the G20. Following that the floor is open for you to ask any questions that you may want to ask. And if you want anything else on the bilaterals etc., I will then respond. Let me begin by inviting Mr. Suresh Prabhu to make his opening remarks.
Prime Minister’s Sherpa for G20 Summit (Shri Suresh Prabhu):Thank you all for coming here all the way from India. It means that now we will have to organise another event in future. There is G20, there is B20, I think we will have to have M20. Because the media is coming in such large numbers, I think this is a good idea to involve them more in an organised manner.
Friends, it was the first G20 summit for our Hon. Prime Minister. And as it turned out, he was the most sought after leader at the G20 Summit. He had several bilaterals which my colleague Mr. Akbar will let you know. Also I could see, it may not have been noticed by all, hundreds of people wanting to have photos with him from all over the world, Ministers and others. Therefore, this has been a very significant entry for our Prime Minister into the global forum of G20.
As you know, India has been particularly saying that G20 is a grouping which also addresses concerns going beyond the members of the G20 themselves. Fortunately it has been now put at the centre of the agenda that developmental issues are occupying a very key place in the outcomes as well as in the deliberations. Therefore, we could see that employment, which has been India’s prime concern, is now one of the central issues for discussion in G20.
This is very significant because you have noticed that in the last several decades we could have unprecedented growth in global output but absolutely no relationship of that growth with employment. So, this has been a very significant demand, this is a significant contribution India has made for her own interest and also for others, and also for those who are not present in the G20.
Then of course the growth which is very critical because if you do not have economic strength, you will not be able to get as much as you want to put into the social sector. So, growth is one of the important things. As I was first pointing out, growth though shaping up but not as good as it should have been. Therefore, India is one of the principal countries which will contribute significantly to the incremental two per cent growth rate which will happen mainly from India besides China of course.
Then India was the co-chair of the Framework Working Group. That again is a significant contribution India made towards this. We have USD two trillion of extra global economic growth which will happen because of this two per cent growth rate that we are talking about. I think India would also benefit but India will also contribute. India will contribute because India’s growth rate will definitely be upwards of six per cent, and definitely India will benefit because when the global markets open up we will also get a significant part of that as our share of the global trade. So, that again will be a significant contribution that we will have.
We already talked global infrastructure which is a very significant outcome of this particular summit. Infrastructure has become a very central theme of discussion. There are several initiatives on infrastructure. Multilateral agencies like IMF and World Bank will also contribute towards that. There is already a global infrastructure hub which is going to be created. There is already talk of creating a best practices network for infrastructure in which every country can really benefit. As President Obama also pointed out, it is not only developing countries or emerging economies like India but also developed countries like the US. So, this will be a very significant contribution, and the World Bank Group’s Global Infrastructure Facility will also be there.
Of course as you know, we have been continuously following up on the reforms of these multilateral agencies. Now it has been said that probably as soon as possible we should try to recapitalise the IMF and we should try to reform the distribution in a way that represents the reality that exists because of new economies are now contributing significantly to this process of work.
As regards employment, I already mentioned to you that this has been a significant part. In fact we want 25 per cent women employment to be also increased. India has already made some very interesting contribution which was noted by them in areas like self-help groups, in areas like animal husbandry and others where they are also creating jobs in a different informal sector. So, that again is a very interesting contribution.
We have been talking about resilience of global economy. As was discussed, maybe global economy seems to be out of the woods but not entirely. It could relapse into a challenge unless we do structural changes in terms of governance, in terms of changing the structure of economies globally. And that actually applies mainly to the developed world because they are the ones who are supposed to take those steps. Some of the immobilities in the market places are also causing concerns.
We pointed out and we insisted that services should be as much a part of global trade as the goods are. That again helps a country like India which has the largest pool of service providers, maybe professionals or others. Therefore, this could be another contribution which has been also taken on board.
Prime Minister made a strong pitch for repatriation ofblack money. He said that it is veryimportant.India is doing its level best to get it but because of certain rigidities, certain laws, certain situations that exist because of past treaties made many years ago. But despite that India has been able to get a very significant part of that. We have added one sentence which mentions including transparency. This is actually talking about the base erosion and profit sharing action plan to modernise international tax rules. This is something which is absolutely necessary because you have seen that tax havens in a very sophisticated form
avoidand creates the possibility of evasion of tax.
Now we have said that in 2015 there will be a work programme finalising including transparency of taxpayer specific rulings found to constitute harmful tax practices. I think I would say that this is a very interesting addition to the draft declaration which has now become part of the final communiqué. And this will actually add to it.
I will read the entire sentence of the communique. It says:
“We are committed to finalising this work in 2015, (that is the base erosion and profit shifting)including transparency of taxpayer’s specific rulings found to constitute harmful tax practices.We welcome progress being made in taxation of patent boxes. This again has been India’s demand because the intellectual property rights which protect certain trade-related IPRs which are not subject to tax. So, this is again a welcome development on that.
We have also been able to work on the anti corruption action plan which is again going to be taken forward in the next year’s Presidency of Turkey.
The G20 has also addressed the issues related to the climate change in a significant way. I think it has been a very important development. We were very keen that climate change should be under the United Nations Framework Convention on Climate Change. As you know, there have been efforts to derail that process. While climate change is necessary, at the same time some countries were not trying to necessarily follow the Framework Convention which was made under the United Nations aegis. So, we insisted on that.
Another important part has been the adaptation. As you know, a country like India is facing enormous challenges in dealing with climate change which is a reality as a result of past emission. Therefore, if the past emission is a reality, the adaptation is a necessity. Therefore, we were insisting on that and we could get that on board.
Another very interesting point. As you know, historically the Bali Action Plan included a huge agenda on development. There has been a very significant portion which has been mentioned here, which actually said that we welcome the breakthrough on the full and prompt implementation of the trade facilitation agreement and includes provision on food security which is a welcome step. Not only this was a bilateral but this is now welcomed by all the G20 countries that the food security is welcome.
And most importantly, we commit to implement all elements of Bali Package and swiftly define the WTO work programme on the remaining issues of the Doha Development Agenda to get negotiations back on track. Just to give you a little historic perspective, the Bali Action Plan and the Ministerial Declaration at that particular time had quite a few components, largely the developmental agenda. Actually Doha Round was touted as the Development Round. But it looks like for a while we were focusing only on trade facilitation. So, India has taken a very firm but very principled stand, and I am glad that it is now vindicated by all the countries including the G20 which says that food security will be one of the important parts.
Energy is a very important element. Our Prime Minister has been very emphatically saying and he made some significant contribution towards that process. He also mentioned that we should create a global centre for dealing with renewable energy to find solutions and everything. It was very widely welcomed including by those who are not part of the G20 likeJeffreySachsand others who have been saying that this is an excellent idea that we have done.
Of course as you know, the G20 had made a very elaborate statement on Ebola. It is very important.
I must say that our Prime Minister has also made contribution in terms of saying what reform really means. It was a very interesting and, I would say, a very significant statement to say that reforms should be people centric, reforms should be benefiting people and not benefiting corporates or the governments alone or rather not corporates and governments but specifically for the people; and also they should not be leader driven but should be institutionalised. This again was a very widely welcomed statement. I think this again would go a long way in shaping the future course of thinking in G20 in terms of what reforms really mean.
Therefore, this has been a generally excellent G20 summit which has just ended. I must take this opportunity to congratulate the Australians for dong a great job in terms of organisation, in terms of security which sometimes must have bothered you. But as you can know, 30 global leaders were here in one city at a given point of time. That is a very challenging task to deal with that. In fact the security was impeccable but I must say not very intrusive. It was just a very substantial discussion but not in something which I just elaborated. It is a very interesting summit. The hospitality was absolutely excellent. It is professional but with personal touch. It has been a very good summit.
We wish Turkey a very warm welcome because they are the ones who will be hosting the G20 for the next one year. The first meeting will be held in December. As I told you, I will request my friend in Turkey to make sure that the media would get a very prominent place in the next G20 summit but also for the events leading to G20 summit because you are a very important part of our message that you carry. Therefore, you are a very important component of the entire process of making sure that all of us participate in developmental ideas like this.
Thank you very much. If you have any questions, I will be more than happy to answer. But also anytime in India we will also continue to do this because we are also going to take certain steps in India including inviting some of the Sherpas to visit India so that you could also talk to them more. So, we will be happy to collaborate with you. Thank you.
Question:We are glad that you are taking care of interests of M20, the Media 20.
This is regarding the base erosion issue. You said there is an interesting addition to the Declaration relating to transparency. Mr. Prabhu, are you trying to suggest that this was at India’s behest?
PM’s Sherpa for G20 Summit:
That is one of the important components of that. As I told you, there are twin pillars of this entire process. One is the base erosion and profit shifting, which is now popularly called as BEPF. This has been a long story which has been made all that. The other part is the automatic sharing of information, which is an extremely important initiative which will mean that all the countries will have to maintain the information in a way so that it can be automatically shared. There is no need to actually have some sort of a treaty or something. This will happen as a result of that.
Our Prime Minister also mentioned that it should be done in a way that we allow everybody, all the countries, there should be a universalisation of this automatic sharing of information. So, transparency in this form will be very clear because when you have the automatic sharing of information then it is not purely any hiding of information. So, that is basically it. In addition to that, there are tax laws, etc. If you want to say something, Usha, you can always add.
Sous Sherpa (Ms. Usha Titus): This is one of the action points, in fact the action point 5 in the 14-point action plan under this. There are rulings that are given by countries that are specific for corporates which may even give total tax exemption for them. Obviously if such things happen, companies will move their headquarters there.
So, the whole base erosion and profit sharing action plan or work started because it was felt that there should be some way of standardisation of how taxation can take place so that there is almost a level-playing field. Recently you would have known the various articles that have come about Luxembourg having given a series of rulings where the tax effectively for corporate was zero. It is in that context that work was done and it has been decided that the work on taxpayer specific rulings should be made transparent. Whatever rulings big countries are coming out with, there should be greater transparency. And it should not be just individual firm specific. Everybody should know what exemptions countries are giving.
So, this has been a commitment that has been adopted also by G20 or in a sense that work has been welcomed to send a strong message that all the systemically important countries of the world are backing such a transparency regime.
PM’s Sherpa for G20 Summit:
May I also request Akbar to tell you about the bilaterals because they are as significant and will give you some information.
Official Spokesperson: Before that I just wanted to go right to your question. The language that the hon’ble Minister mentioned was specifically introduced only today. It was introduced after the Prime Minister’s intervention this morning, and it was in response to the strong call that the Prime Minister made. This call was also subsequently supported by some others who mentioned this.
So, if your question is whether this language was introduced today at behest of India, the answer to that is yes, this was done now. And that is why we have it was actually not in the original draft but in the final draft which will be released. Right now what we have is the draft highlighting that portion which has been introduced today. I hope that clarifies your point.
PM’s Sherpa for G20 Summit: It is our Prime Minister’s own contribution.
He will tell you a little bit about bilaterals that took place on the sidelines.
Official Spokesperson: Since we met yesterday the Prime Minister had two other bilateral meetings – with the Chancellor Merkel of Germany and the Saudi Crown Prince Salman bin Abdulaziz. These meetings were again first of their kind in terms of Prime Minister’s interaction with them.
Chancellor Merkel invited the Prime Minister to visit Germany at an early date. As you are aware, there is a biennial meeting between the two of them which is called the Intergovernmental Commission. For that she has agreed to come to India in the latter half of the year. However, Prime Minister is inclined to go earlier than that to several countries including Germany in the first half of the year. So, you are likely to have two visits – one outgoing visit from India and one incoming visit to India in terms of Germany.
They also discussed various issues including the Prime Minister’s own vision of reform, how he sees this going ahead in terms of cooperation with Germany, and approach to BRICS as well as to various neighbours and organisations.
I am certain that you want to know, and I can confirm to you that Chancellor Merkel did raise the issue of German language teaching in India. But she raised it in a manner of requesting that the Prime Minister have a look at it and see what would be the best way to take this forward. Prime Minister assured her that he himself is a votary of young Indian children learning other languages. How it is best done within the confines of the Indian system, we will work it out. That was the sum and substance of the discussion on a matter which had come up recently into the public domain.
Other than that, Prime Minister also had a short meeting with the Crown PrinceSalman of Saudi Arabia. Crown Prince Salman congratulated Prime Minister saying that he welcomedhis election as Prime Minister of a very friendly country. He also narrated several anecdotes of his own childhood and growing up which indicated familiarity between the Saudi Royal Family and India. He wished Prime Minister well, and Prime Minister said that we are increasingly inclined to cooperate with Saudi Arabia on a variety of issues.
Crown Prince Salman said that Saudi Arabia is ready to cooperate with India on all aspects. We will take the relationship forward. There are delegations from Saudi Arabia coming to India on specific areas. They will work on how to proceed further on this. These were the two bilaterals apart from what I have told you previously.
If you have anything else either on the G20 or on anything else, we will answer.
Question:Has the PM spoken to people back home about the German language issue? Has he spoken specifically to the Minister?
Official Spokesperson: The Prime Minister is aware of the situation there. He obviously has been briefed before the meeting. So, he is aware of the circumstances in which these were taken. These were taken in accordance with a judicial pronouncement where the issue of third language being from a foreign country was raised. Of course there are other mechanisms whereby, even which have been clarified in India, foreign languages can be learned by children in schools but not as third language but as any other language.
Prime Minister is aware of this, and so is Chancellor Merkel. I think the only request is to work out – there is no specificity in terms of what language it should be – thatGermany was keen to India can work out a system whereby children in Indian schools can learn German. As I said, Prime Minister himself said that it is important for young Indian children to learn as many languages as possible because it would help them in their growth and their integration and job opportunities outside as well as growing as individuals.
PM’s Sherpa for G20 Summit:
I already told you this but probably did not mention it specifically. There has been a very significant progress made in this meeting on remittances. Our Indian workers who work in the Middle East mainly but also in other places send the largest amount of money back home – USD 70 billion. No other country sends that much. That was attracting bank charges as high as ten per cent in many countries. We have now agreed to bring it down below five per cent. We were still insisting that it should be with the timeline of 2016, but at least we are focusing on that. This is taken as a priority.
Sous Sherpa (Ms. Usha Titus):
It is a commitment.
PM’s Sherpa for G20 Summit:
All these countries mainly are the countries which are responsible for it. Once they do it, I think the rest of the world will follow. And this will significantly help our workers.
Question:Below five per cent?
PM’s Sherpa for G20 Summit:
Yes, below five per cent. Just imagine, ten per cent of USD 70 billion is USD 7 billion. If we are going to get FDI of USD 7 billion, we will be very happy!
Question:What was the timeframe given? Will they do it by 2016?
PM’s Sherpa for G20 Summit:
The timeline is something which is done.
The second part is a very important part on financial inclusion. There is already talk of financial inclusion. They were all very happy about Indian Prime Minister’s initiative of the Jan-Dhan Yojana which is very well appreciated. Enhancing financial inclusion has been taken as a priority. This is one of the two very significant elements which I did mention.
Question:What is the biggest takeaway for India?
PM’s Sherpa for G20 Summit:
All of these if you really look at it. If growth happens India benefits; if employment increases, India benefits; if you open up the services sector related issues, India benefits; remittances, very good. As regards energy, we are going to be the single largest consumer of energy by 2032. To bring in transparency and accountability on energy markets, we are going to have a dialogue on gas markets globally to find out how these markets really function because there are some state players who operate in the oil and gas market which distort the real operation of the market forces. Therefore, this will be in India’s interest if we can bring it. Energy efficiency is another very significant development. As I mentioned earlier, our Prime Minister’s new leadership idea in terms of creating a new renewable energy related global centre would benefit India immensely.
Actually speaking, now we are at a stage – we are all mainly Indians – where any global development will benefit India more because we are acquiring a critical mass. We are the largest growing economy. All these different countries which are already developed are in a way saturated. It is very evident from the fact that Europe is now going down, USA is not growing as much, and therefore the emerging markets have grown so much. And that is how in fact the G20 was created because they realised that more economic muscle lies outside G7 or G8 countries. That shows that on any significant development of any kind, India would obviously benefit. But we are not just waiting in the wings for the benefit to accrue. We are taking proactive steps giving ideas. All this is largely benefiting. We are not in a way taking any encumbrances on ourselves.
Question:What was the reaction of G20 nations on the black money issue which India raised?
PM’s Sherpa for G20 Summit:
Reaction in the sense, we are demanding it very strongly because we feel that it is legitimately belonging to the country where it should have been taxed. That is why I am saying this is a very significant sentence which was added. As Mr. Akbar said, as a response to Prime Minister’s strong intervention on the subject this had to be added.
Official Spokesperson: Let me just try and add to it. You will understand the importance that today’s intervention had in the sense that the original draft did not contain the language which was fully satisfactory to us. Subsequently, after Prime Minister spoke, several other countries also echoed this sentiment. Off hand from my recollection there were certainly some of the BRICS countries like Brazil, South Africa and several others spoke in favour of that. Following that the Secretariat then worked out on the language which was shown to us and finally approved as a new insertion purely in response to the events of today and Prime Minister’s own intervention there.
Question:Mr. Prabhu, you said that there was strong intervention by the Prime Minister on black money and you gave details about that. But this is perhaps the first time that at a global stage Prime Minister linked it with terror. He said that it is very important in tackling terror globally. Could you elaborate briefly on what the Prime Minister said, and also was there support from other countries as well?
PM’s Sherpa for G20 Summit:
That was not here, he spoke in ASEAN.
Official Spokesperson: I think what you are saying is this transparency agreement not only in terms of tax benefits but also as an effort to ensure that elements who are involved in drug trafficking, in money laundering and terrorism, etc. Basically transparency will help a country in various aspects. Yes, tax is one aspect. As I indicated even yesterday, these are new elements which are now added on to the agenda of transparency that apart from tax benefits in terms of availability of our tax authorities they will also be available to our other authorities. And this is a significant move in terms of our national security. So, while there is an economic element to our national security, there is also another threat perception which will be tackled by these transparency measures. I hope that clarifies the position.
Question:Every country is supposed to give a plan to G20 on what it wants and what additional policy measures they will take to contribute to this additional two per cent growth in world output. What has India said on that?
PM’s Sherpa for G20 Summit:
When the target of two per cent was agreed we are actually working for more than that. Our contribution is significantly higher. It is not a part of a plan which we are going to submit, but our initiatives domestically like Make in India, making financial inclusion, creating infrastructure facilities, all of these will contribute significantly to that. This is our domestic agenda which will in any case benefit our Indian citizens, and in the process because we are contributing significantly to our own output this will be calculated as part of our global output in any case we are part of G20. All this is in any case is a part of domestic agenda.
Sous Sherpa (Ms. Usha Titus): I will just add. In the first budget this year the largest component was on infrastructure. There have been so many new initiatives all of which have gone into our growth strategy. And the Brisbane Action Plan, which is the additional document, mentions the significant infrastructure initiative of India. You are aware of the budgetary proposals all of which were carried into the growth strategy of India, as the Sherpa was saying.
Official Spokesperson: If you have nothing further to ask, I just wanted to thank you very much. We end the G20 part of this visit
with, as you can see, smiles on our faces because of the success which is of an unprecedented nature.
If you go back to our initial briefing and see from there where we are today, we have achieved substantially or overwhelmingly all our goals. These goals were in terms of outcomes of the communiqué, as we have just mentioned to you, in terms of transparency, in terms of subsequent developments relating to the India-US understanding on the WTO, as well as on remittances related issues. As far as growth, we are in the forefront of growth. So, if you add up all these elements, it has been an extremely successful visit.
In addition to that I think there is a personality issue to this. You can see that in terms of the number of leaders, in terms of the number of delegates, in terms of the requests for meetings, our Prime Minister scored very high. So, we are all grateful to you for covering that and we go back with a successful G20 participation.
PM’s Sherpa for G20 Summit: Let me add to what Akbar said. But for you, many people even back home would not have known what is G20. So, thank you very much for contributing to this process of letting people know. I am very happy. Otherwise, people would have said this is only G19 not G20. Thank you very much.
Sous Sherpa: Just to add, the Brisbane Action Plan mentions to emerging markets as growing strongly – China and India. Only two by name.
Official Spokesperson: Thank you very much.
(Concluded)
