Global Cooperation and Challenges at 2025 Summits

Recent global summits in 2025 have brought into light the urgent need for strengthened multilateral cooperation amid a divided world. The G20 meeting in Johannesburg and COP30 in Belém showcased developing countries’ assertiveness. Both events telld the tension between climate responsibility, economic growth, and global governance. Key themes included climate justice, digital economy taxation, and regulation of emerging technologies.

Renewed Multilateralism at G20 Johannesburg

The G20 summit, hosted by South Africa, ended with a declaration of renewed commitment to multilateralism. Despite the US boycott, South African President Cyril Ramaphosa emphasised shared human goals over national differences. The summit stressed cooperation on global issues like nuclear proliferation, pandemics, and economic stability. Leaders agreed on the need to balance national interests with collective action.

Climate Justice and Developing Nations’ Stance at COP30

COP30 in Brazil saw the absence of the US, which had criticised the climate agenda as a green energy scam. Developing countries pushed back against the rich world’s attempts to shift climate responsibility onto them. India declared it was already making climate adaptations and prioritised growth alongside environmental action. The summit reinforced that wealthy nations must lead in reducing greenhouse gas emissions.

India’s Role and Digital Economy Taxation

India’s Prime Minister Narendra Modi called for a global compact to regulate artificial intelligence and prevent its misuse. This reflects the growing importance of global solidarity beyond traditional issues. On taxation, G20 leaders endorsed the OECD’s two-pillar framework to address challenges from digitalisation. India, with its vast digital market, supports this framework as it seeks fair taxing rights on foreign digital services. The commitment to tax transparency on immovable property also originated from India’s proposals.

Challenges in Implementing Global Tax Agreements

The G20 reaffirmed the need to implement the OECD’s 2021 tax agreement despite past setbacks, including the US withdrawal under the Trump administration. Pillar-1, addressing taxation of digital companies without physical presence, is crucial as global commerce evolves. India had revoked levies on non-resident digital firms expecting Pillar-1’s implementation, but revenue losses have followed delays. The latest G20 push offers hope for resolving this tax imbroglio.

Emerging Technologies and Global Governance

Global leaders recognised that regulating AI and other emerging technologies requires international cooperation. Modi’s speech brought into light the dual role of AI in economic transformation and potential misuse. The summits telld that without a global framework, technological advances could deepen inequalities and disrupt economic orders.

Developing Countries’ Assertiveness

Both summits reflected a shift with developing nations demanding fairer treatment and leadership roles. They rejected narratives that downplay their contributions or impose disproportionate burdens. This assertiveness signals a move towards a more inclusive global order where economic growth and climate action coexist.

Questions for UPSC:

1. Critically analyse the role of multilateralism in addressing global challenges in the 21st century. With suitable examples, explain the limitations faced by such cooperation.
2. What are the challenges of taxing the digital economy in a globalised world? Comment on the significance of the OECD’s two-pillar framework in this context.
3. Explain the concept of climate justice. How do developing countries’ perspectives influence international climate negotiations?
4. With reference to emerging technologies like artificial intelligence, underline the importance of global governance. What are the risks of unregulated technological advancement?

Answer Hints:

1. Critically analyse the role of multilateralism in addressing global challenges in the 21st century. With suitable examples, explain the limitations faced by such cooperation.

1. Multilateralism encourages collective action on issues like pandemics, climate change, nuclear proliferation, and economic stability.
2. Examples – G20 Johannesburg declaration emphasizing renewed commitment despite US boycott; COP30 climate negotiations.
3. Enables pooling of resources and shared responsibilities, balancing national interests with global goals.
4. Limitations include geopolitical rivalries, unilateral actions (e.g., US tariff assaults, withdrawal from agreements), and lack of enforcement mechanisms.
5. Diverse priorities of developed vs developing nations cause friction and delay consensus.
6. Emerging issues like digital economy taxation and AI regulation require new frameworks, often lagging behind technology and politics.

2. What are the challenges of taxing the digital economy in a globalised world? Comment on the significance of the OECD’s two-pillar framework in this context.

1. Digital companies operate across borders with minimal physical presence, complicating traditional tax rules.
2. Physical presence rule is outdated; taxing rights need to reflect market/user location rather than just physical offices.
3. OECD’s two-pillar framework aims to allocate taxing rights fairly (Pillar 1) and establish a global minimum tax (Pillar 2) to prevent profit shifting.
4. India’s support reflects its large digital market and desire to tax foreign digital service providers legitimately.
5. Implementation delays cause revenue losses, as seen in India’s revoked equalisation levies pending Pillar 1 rollout.
6. Global consensus is difficult due to conflicting national interests and past unilateral withdrawals (e.g., US under Trump).

3. Explain the concept of climate justice. How do developing countries’ perspectives influence international climate negotiations?

1. Climate justice emphasizes fair distribution of climate change burdens and responsibilities, considering historical emissions and capacities.
2. Developing countries argue that rich nations should lead in reducing greenhouse gases due to their historical emissions.
3. They seek support for adaptation and sustainable growth rather than sacrificing development for climate goals.
4. India’s stance – prioritizing growth while contributing to climate adaptation efforts.
5. Developing nations’ assertiveness challenges attempts to shift emission reduction responsibilities onto them.
6. This influences negotiations by demanding equity, finance, and technology transfer from developed countries.

4. With reference to emerging technologies like artificial intelligence, underline the importance of global governance. What are the risks of unregulated technological advancement?

1. AI and emerging technologies transcend borders, requiring coordinated global regulation to prevent misuse.
2. Global governance ensures ethical standards, prevents misuse, and harnesses technology for inclusive economic growth.
3. Unregulated AI risks include deepening inequalities, job displacement, privacy violations, and geopolitical power imbalances.
4. Modi’s call for a global compact marks the need for cooperation to address AI’s dual-use nature.
5. Without frameworks, technological advances could disrupt commerce, production, and competitiveness unevenly.
6. International collaboration is essential to balance innovation benefits with societal safeguards and security concerns.