The Group of Twenty – G20

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The Group of Twenty – G20

Introduction

  • The Group of Twenty, or G20, is the premier forum for international cooperation on the most important aspects of the international economic and financial agenda. It brings together the world’s major advanced and emerging economies.
  • The G20 comprises Argentina, Australia, Brazil, Canada, China, EU, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, UK and USA. The G20 Countries together represent around 90% of global GDP, 80% of global trade, and two thirds of the world’s population.
  • The objectives of the G20 are:
  • Policy coordination between its members in order to achieve global economic stability, sustainable growth;
  • To promote financial regulations that reduce risks and prevent future financial crises; and
  • To create a new international financial architecture.

Origin and Evolution

  • The G20 was created in response to both to the financial crises that arose in a number of emerging economies in the 1990s and to a growing recognition that some of these countries were not adequately represented in global economic discussion and governance.
  • In December 1999, the Finance Ministers and Central Bank Governors of advanced and emerging countries of systemic importance met for the first time in Berlin, Germany, for an informal dialogue on key issues for global economic stability. Since then, Finance Ministers and Central Bank Governors have met annually.
  • India hosted a meeting of G20 finance ministers and central bank governors in 2002. G20 was raised to the Summit level in 2008 to address the global financial and economic crisis of 2008.

Organizational Structure of G20

  • The G20 operates without a permanent secretariat or staff. The group’s chair rotates annually among the members and is selected from a different regional grouping of countries. The incumbent chair establishes a temporary secretariat for the duration of its term, which coordinates the group’s work and organizes its meetings.
  • The current chair of the G20 is Argentina, which took over the chair on 1 December 2017. The 2017 chair was Germany, which hosted the 2017 Summit in Hamburg.
  • The 2019 chair will be Japan, which will host the 2019 G20 Osaka summit. The 2020 summit will be held in Saudi Arabia.

Proposed permanent secretariat

  • In 2010, President of France Nicolas Sarkozy proposed the establishment of a permanent G20 secretariat, similar to the United Nations. Seoul and Paris were suggested as possible locations for its headquarters. Brazil and China supported the establishment of a secretariat, while Italy and Japan expressed opposition to the proposal.
  • South Korea proposed a “cyber secretariat” as an alternative. It has been argued that the G20 has been using the OECD as a secretariat.
  • The preparatory process for the G20 Summit is conducted through the established Sherpa and Finance tracks that prepare and follow up on the issues and commitments adopted at the Summits.
  • The Sherpas’ Track focuses on non-economic and financial issues, such as development, anti-corruption and food security, while addressinginternal aspects such as procedural rules of the G20 process. The Sherpas carry out important planning, negotiation and implementation tasks continuously.
  • The Finance Track focuses on economic and financial issues. The Sherpa and Finance tracks both rely on the technical and substantive work of a series of expert working groups. Additionally, the thematic agenda is developed through the organization of several Ministerial Meetings, such as the Joint Meeting of Finance and Development Ministers, and the Labour, Agriculture and Tourism Ministerial meetings.

Summits

  • The Summit of G20 Finance Ministers and Central Bank Governors, who prepare the leaders’ summit and implement their decisions, was created as a response both to the financial crisis of 2007–2008 and to a growing recognition that key emerging countries were not adequately included in the core of global economic discussion and governance. Additionally, the G20 Summits of heads of state or government were held.
  • After the 2008 debut summit in Washington, DC, G20 leaders met twice a year: in London and Pittsburgh in 2009, and in Toronto and Seoul in 2010.
  • Since 2011, when France chaired and hosted the G20, the summits have been held only once a year. The 2016 summit was held in Hangzhou, China, and 2017 summit was held in Hamburg, Germany.
  • A number of other ministerial-level G20 meetings have been held since 2010. Agriculture ministerial meetings were conducted in 2011 and 2012; meetings of foreign ministers were held in 2012 and 2013; trade ministers met in 2012 and 2014, and employment ministerial meetings have taken place annually since 2010.
  • In March 2014, the former Australian foreign minister Julie Bishop, when Australia was hosting the 2014 G20 summit in Brisbane, proposed to ban Russia from the summit over its role in the 2014 Crimean crisis.
  • The BRICS foreign ministers subsequently reminded Bishop that “the custodianship of the G20 belongs to all Member States equally and no one Member State can unilaterally determine its nature and character.”
  • In 2018, Argentina hosted the 2018 Summit. The 2019 Summit will be in Japan 2020 in Saudi Arabia and 2022 in India.

India and G-20

  • India’s participation in the G20 process stems from the realization that as a major developing economy India has a vital stake in the stability of the international economic and financial system.
  • India has been actively involved in the G20 preparatory process both at the Sherpas Track and the Financial Track since its inception.
  • The Prime Minister participated in all G20 summits.
    • India’s agenda at the G20 Summits is driven by the need to bringin greater inclusivity in the financial system, to avoiding protectionist tendencies and above all for ensuring that growth prospects of developing countries do not suffer.
    • India has strived to ensure that the focus of the global community remains on the need to ensure adequate flow of finances to emerging economies to meet their developmental needs.
    • India has welcomed the inclusion of development as an agenda item of G20 process at the Seoul Summit and supported the Seoul Development Consensus and the associated Multi-Year Action plans.
    • Prime Minster called for the recycling of surplus savings into investments in developing countries to not only address immediate demand imbalances but also developmental imbalances.
  • India has worked to maintain the dynamism and credibility of G20 deliberations for establishing a framework for strong, sustainable and balanced growth, strengthening international financial regulatory systems, reforming Bretton Woods’s institutions, facilitating trade finance, pushing forward the Doha agenda.
  • India, as a co-chair of Framework Working Group on Strong, Sustainable and Balanced Growth, tried to refocus the energies of the group towards growth, jobs, fiscal consolidation, rebalancing demand from the public sector to the private, and to risks arising from internal imbalances within the Eurozone.
  • India remains committed to the G20 process for achieving a stable, inclusive and representative global economic and financial system.
  • In the end, the G20 process is about balancing competing interests and setting global rules of economic engagement.
  • Born in the crucible of the 2008 global economic crisis, the G20’s agenda has moved beyond crisis management to enhanced global macroeconomic coordination to create a new equilibrium and resilience in global economy. In the scrambled alphabet of global geopolitics, the G20 finally seems to be getting the script right.
  • Across the summits, India, Asia’s third largest economy, has emerged as a fine balancer, delicately blending its national interests with the imperatives of global economic integration.
  • With upbeat projections about India’s economic growth in the years come, expect India to contribute substantially to global economic growth and be a more proactive player in shaping the G20 process.
  • Against the backdrop of an uneven global economic growth, marked by stark asymmetries across geographies it makes sense for the world to be on the side of the India story and global economic resurgence.

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