G20 | 15 Jan 2019

Last Updated: July 2022

What is G20?

The G20 is an informal group of 19 countries and the European Union, with
representatives of the International Monetary Fund and the World Bank.
The G20 membership comprises a mix of the world’s largest advanced and emerging
economies, Together, the G20 members represent more than 80% of world GDP, 75% of
international trade and 60% of the world population.

How did G20 come into Existence?

1997-1999 ASIAN Financial Crisis: This was a ministerial-level forum which emerged
after G7 invited both developed and developing economies. The finance ministers and
central bank governors began meeting in 1999.
Amid 2008 Financial Crisis the world saw the need for a new consensus building at the
highest political level. It was decided that the G20 leaders would begin meeting once
annually.
To help prepare these summits, the G20 finance ministers and central bank governors
continue to meet on their own twice a year. They meet at the same time as the
International Monetary Fund and The World Bank.

How G20 Works?

The work of G20 is divided into two tracks:

The finance track comprises all meetings with G20 finance ministers and central
bank governors and their deputies. Meeting several times throughout the year they
focus on monetary and fiscal issues, financial regulations, etc.
The Sherpa track focuses on broader issues such as political engagement, anti-
corruption, development, energy, etc.
Each G20 country is represented by its Sherpa; who plans, guides, implements,
etc. on behalf of the leader of their respective country. (Indian Sherpa, at the
G20 in Argentina, 2018 was Shri Shaktikanta Das)
Who are the Members of G20?

The members of the G20 are Argentina, Australia, Brazil, Canada, China, France,
Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia,
South Africa, Turkey, the United Kingdom, the United States, and the European Union.
Spain as a permanent, non-member invitee, also attends leader summits.

What is the Structure and Functioning of G20?

The G20 Presidency rotates annually according to a system that ensures a regional
balance over time.
For the selection of presidency, the 19 countries are divided into 5 groups, each having no
more than 4 countries. The presidency rotates between each group. Every year the G20
selects a country from another group to be president.
India is in Group 2 which also has Russia, South Africa, and Turkey.
The G20 does not have a permanent secretariat or Headquarters. Instead, the G20
president is responsible for bringing together the G20 agenda in consultation with other
members and in response to developments in the global economy.
TROIKA: Every year when a new country takes on the presidency, it works hand in hand
with the previous presidency and the next presidency and this is collectively known as
TROIKA. This ensures continuity and consistency of the group’s agenda.

What about the Cooperation with and within G20?

In Toronto in 2010, leaders declared it to be the premier forum for global economic co-
operation.
The work of G20 members is supported by several international organisations that
provide policy advice. These organisations include:
The Financial Stability Board (FSB). The FSB, which was established by G20 leaders
following the onset of the global financial crisis,
The International Labour Organization (ILO).
The International Monetary Fund (IMF).
The Organisation for Economic Co-operation and Development (OECD)
United Nations (UN)
World Bank
The World Trade Organization (WTO)
The G20 also regularly engages with non-government sectors. Engagement groups from
business (B20), civil society (C20), labour (L20), think tanks (T20) and youth (Y20) are
holding major events during the year, the outcomes of which will contribute to the
deliberations of G20 leaders.

What Type of Issues are Addressed by G20?

The G20 focuses on a broad agenda of issues of global importance, although, issues
pertaining to the global economy dominate the agenda, additional items have become
more important in recent years, like:
Financial markets
Tax and fiscal policy
Trade
Agriculture
Employment
 Energy
Fight against corruption
Advancement of women in job market
2030 agenda for Sustainable development
Climate Change
Global Health
Anti-terrorism
Inclusive entrepreneurship

What are India's Priorities in G20 Summits?

Checking tax evasion to fight corruption

Choking terror funds
Cutting the cost of remittances
Market access for key drugs
Reforms in the World Trade Organisation to improve its functioning
“Full implementation” of the Paris Agreement

What are the Strengths/Achievements of G20?

Flexible: With only 20 members, the G20 is agile enough to make prompt decisions and
to adapt to new challenges.
Inclusive: The inclusion every year of invited countries, international organizations and
civil society organization through engagement groups allow for a broader and more
comprehensive perspective when assessing global challenges and building consensus to
address them.
Coordinated action: The G-20 has also played a crucial role in strengthening the
international financial regulatory system, including better coordination across countries.
Facilitated an increase in lending from multilateral development banks of US$235
billion at a time when private sector sources of finance were diminished.
Major achievements of the G20 include quick deployment of emergency funding during
the 2008 global financial crisis.
It also works for reforms in international financial institutions by improving oversight
of national financial institutions. Such as G20 driven reforms to the international tax
system, through the G20/OECD Base Erosion and Profit Shifting (BEPS) project and
implementation of tax transparency standards.
G20 played a critical role in the ratification of the Trade Facilitation Agreement, with
the WTO estimating it could contribute up to somewhere between 5.4 and 8.7% to global
GDP by 2030 if the agreement were fully implemented.
Better Communication: G20 bring World’s top developed and developing countries
together to bring consensus and reasoning into decision making through discussion.

In the 2021 (November) G20 summit, the leaders made a commitment to reach carbon
neutrality by or around mid-century.

They have adopted the Rome Declaration.

Earlier, the G20 Climate Risk Atlas was released which provides climate scenarios,
information, data and future changes in climate across the G20 countries

What are the Challenges Faced by G20?

 No Enforcement mechanism: The G20’s toolkit ranges from simple exchanges of
information and best practices to agreeing common, measurable targets, to coordinated
action. None of this is achieved without consensus, nor is it enforceable, except for the
incentive of peer review and public accountability.
Not legally binding: the decisions are based on discussions and consensus which
culminates in the form of declarations. These declarations are not legally binding. It’s just
an advisory or consultative group of 20 members.
Polarisation of Interests:
Russian and Ukrainian Presidents are invited to the G20 Summit to be held in
November, 2022.
The U.S. has already demanded to not invite Russian President, or U.S. and
European countries would boycott his address.
China’s strategic rise, NATO’s expansion and Russia’s territorial aggression in
Georgia and Crimea and now Russia Ukraine Conflict in 2022 changed global
priorities.
Globalisation is no longer a cool word, and multilateral organisations have a
credibility crisis as countries around the world pick being ‘G-zero’ (a term coined
by political commentator Ian Bremmer to denote ‘Every Nation for Itself’) over
the G-7, G-20, BRICS, P-5 (UNSC Permanent Members) and others.

What could be the Way Forward?

The G20 cannot be a panacea for the world’s problems. But over the past 10 years, the G20
has been an important forum for international cooperation.
Effective global governance, like the G20, is essential as rising powers seek opportunities
to influence and contribute to the global order.
The G20 must strengthen the partnership with international organisations such as the
IMF, the OECD, the WHO, the World Bank and the WTO, and delegate them the task of
monitoring progress.
Global Cooperation should be given priority over individual interest for the benefit of all
the member countries.
Use of Dialogue and Diplomacy should be carried out to resolve issues like Ukraine -
Russia conflict and differences between Russia and the west.
India should focus upon utilizing the G20 2023 summit as a platform to raise
discussions on issues such as aggressive trade barriers/ sanctions, inter country conflicts
and advocate for global peace and cooperation.