Cornwall Consensus

The persistent economic downfall and climatic disturbance increased the need for a solution like the Cornwall Consensus. A report released by the G7 Economic Resilience Panel demanded a sustainable relationship between public and private sectors, for a resilient and equitable economy.

The world leaders had to select between the Washington Consensus and witnessing a failed economic system, or scrap it down for a fresh international social contract.

Individuals preparing for UPSC Prelims can read this article to understand the Cornwall Consensus introduced in the UK-hosted 47th G7 Summit in Cornwall.

IAS aspirants must know that the Group of Seven Nations (G7) is a group of the seven most advanced economies as per the International Monetary Fund (IMF). The seven countries are Canada, the USA, UK, France, Germany, Japan and Italy.

Key Points of Cornwall Consensus

The Washington Consensus was coined by British economist John Williamson in 1989 that supported pro-globalist ideas of American leaders and free-market.

This policy codified the precept of market supremacy and minimised state participation in areas like education and healthcare. Financial institutions had to accommodate this policy in their lending practices.

The Washington Consensus went downhill with the financial crisis in 2008. The economic shortcomings following the pandemic accelerated. However, the failure in controlling the global economy has led to the introduction of an alternative, the Cornwall Consensus.

The Cornwall Consensus addresses acute and chronic issues to improve global economic conditions.

Students preparing for UPSC exam should know the highlights of the Cornwall Consensus.

  • The Cornwall Consensus is believed to push global coordination to minimise corporate taxation.
  • It plans to revitalise a state’s economic profile and support building of international solidarity. The Consensus aims to bring reformation in global governance for common good.
  • This accord mandates recipients to follow rapid decarbonisation to receive investments and grants from multilateral organisations. This decision restricts rapid market liberalisation as required by IMF (International Monetary Fund) lenders to manage structural regulation programmes.
  • It replaces redeployment with pre-distribution to help states coordinate with public-private partnerships. The primary aim is to maintain a sustainable, resilient and equitable economy.
  • The Cornwall Consensus targets proactive shaping of global markets for a green economy. It will fix market failures with systematic planning.

Apart from these points, UPSC Exam aspirants should also understand the need to implement the Cornwell Consensus.

Based on the UPSC Syllabus, given below are the common questions asked about the G7 countries and summit. Candidates can get answers for the same are the given links:

Why is Cornwell Consensus Necessary?

  • There is a need to avoid measuring growth in GVA, GDP and financial returns to achieve common goals.
  • Countries need to invest substantially to prepare for outcomes of COVID pandemic, and improve mission-based health financing.
  • There is a need for reformation of IP governance to recognise the ideologies of the World Health Organization for collective value creation. This will support purchase commitments and public investments.
  • There is a need to increase state investment for post-pandemic economic recovery. According to India Times, the country’s economy expanded lucratively before Omicron variant arrived.
  • Public investment needs new institutional and contractual mechanisms to maintain sustainable shared value.
  • There is a need to form an interdisciplinary institution for a decarbonised economy like CERN to deal with climatic change.

However, it is essential to know that India has to deal with China to boost its economy. According to Mint, China became India’s top trade partner by contributing upto $86.4 billion.

These are some valuable inputs on the Cornwall Consensus to help students prepare for UPSC and IAS exam with ease.

Frequently Asked Questions

What is the primary benefit of the Cornwall Consensus?

It will help in reviving the state’s economic role and help in building international solidarity. The Consensus aims to bring reformation in global governance for overall development.

What is the meaning of decarbonisation?

Decarbonisation means carbon reduction for a sustainable economic system. It targets the reduction of carbon dioxide emissions.

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