- Group of Twenty is the premier forum of international economic cooperation. It plays an important role in shaping and strengthening global architecture on all major international economic issues.
- Members of G20: 19 Countries and EU. Countries include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, Turkiye, UK and USA. G20 members represent around 85% of global GDP and 75% of global trade and 2/3rd of global population.
- G20 does not have a permanent secretariat or staff
- G20 presidency rotates among the members and is selected from a different regional grouping of countries. G20 member countries are divided into 5 groups comprising a maximum of four countries each. Most groups are formed on a regional basis. However, Group 1 includes Australia, Canada, Saudi Arabia and USA) and Group 2 includes India, Russia, South Africa and Turkiye do not follow the regional pattern. Group 3 includes Argentina, Brazil and Mexico; Group 4 includes France, Germany, Italy and UK and Group 5 includes China, Indonesia, Japan & South Korea. EU is a not a member of any of these regional groups.
- Each year another country from a different group assumes G20 Presidency. The countries in a group are each equally entitled to take Presidency when it is their group’s turn.
- G20 Summit is held annually, under the leadership of rotating presidency. G20 initially focused largely on economic and macroeconomic issues, but it has since expanded its agenda to include trade, sustainable development, health, agriculture, energy, environment, climate change and anti-corruption.
- G20 Presidency is responsible for bringing together the G20 agenda in consultation with other members. The Presidency is supported by the Troika – previous, current and incoming Presidency of G20. During India’s Presidency, the troika will consist of Indonesia, India and Brazil respectively.
- The theme of India’s G20 presidency is Vasudhaiv Kutumbakam or ‘One Earth, One Family, One Future’. The Sanskrit phrase in drawn from Maha Upanishad.
- India holds the presidency of G20 from 1st December 2022 to 30th November 2022.
- Inception of G20: G20 was founded in 1999 after the Asian Financial Crisis as a forum for Finance Ministers and Central Bank Governors to discuss global economic and financial issues.
- Elevation to Leader’s Level: In 2008, G20 was upgraded to Heads of State/Government level in the wake of Global Financial crisis of 2007. In 2009, G20 was designated as the premier forum for international economic cooperation. First G20 Summit took place in 2008 in Washington.
STRUCTURE OF G20
- G20 consists of two parallel tracks: Finance Track & Sherpa Track.
- SHERPA TRACK: Headed by Sherpa who is representative of the Leader. Focuses on socio- economic issues such as agriculture, anti-corruption, climate, digital economy, education, employment, energy, environment, health, tourism, trade & investment.
- FINANCE TRACK: Headed by Finance Ministers and Central Bank Governors, who generally meet four times a year, with two meetings being held on the side- lines of World Bank/IMF meetings. Focuses on Fiscal & Monetary Policy, International Financial Architecture, Infrastructure, financial regulation, international taxation etc.
- The Sherpas oversee negotiations over the course of the year, discussing agenda items for the Summit and coordinating the substantive work of the G20.
- ENGAGEMENT GROUPS: As part of G20 members’ commitment to consult relevant stakeholders communities, dialogue is facilitated through engagement groups, comprising non-government participants from each G20 member. These groups often draft recommendations to G20 Leaders that contribute to the policy making process. Some engagement groups are: Business20, Civil20, Labour20, Parliament20, Science20, SAI20, Startup20, Think20, Urban20, Women20, Youth20.
OTHER G20 INITIATIVES
- Research & Innovation Initiative Gathering (RIIG): Aims to enhance, intensify and strengthen research & innovation collaboration among G20 member countries. RIIG is further the work of Academic Forum held during the Italian Presidency in 2021, by bringing together science, technology and innovation experts of G20 member countries.
- G20 EMPOWER: G20 Alliance for Empowerment & Progression of Women’s Economic Representation (G20 EMPOWER) was launched during G20 Osaka Summit in 2019. It aims to accelerate women’s leadership and empowerment in private sector by leveraging its unique alliance among business leaders and governments across G20 countries.
- Space Economy Leaders Meeting: Under India’s G20 Presidency, ISRO is organising fourth edition of Space Economy Leaders Meeting (SELM) to continue deliberations on significance of space in shaping the global economy.
‘D10’ COALITION OF DEMOCRACIES
- The combination of G7 and 3 other invitees- India, Australia and South Korea has drawn attention to an expanded ‘D10’ coalition of democracies
- First proposed by Boris Johnson, the original purpose of D10 was aimed to address China’s growing technological clout in 5G as well as supply chain vulnerabilities that were exposed during pandemic
- But gradually, with the Joe Biden’s efforts, the group is being seen as an alternate democratic arrangement against the authoritarian states such as China
ADVANTAGES OF PROPOSED D10 COALITION
- The proposed 5G alliance (as proposed by UK) may bring technology and Investment to India
- Membership in coalition of 10 large democracies not only increase the soft power of India but also gives a platform for India to pursue reforms in UNSC. (This coalition will give an opportunity to convince the major powers to make the way clear for India’s candidature as a permanent member of UNSC)
- It acts as a bulwark against Chinese expansionism in Indian ocean and its Wolf warrior diplomacy in the India’s neighbourhood
- Eventually if this coalition turns into a trade bloc, that will improve trade and investment opportunities for India (In the backdrop of lingering EU-India trade deal and pull out of RCEP)
CHALLENGES WITH G20
- This could become a forum for Great Power Rivalry because of Presence of US, China and Russia in the aftermath of Ukraine crisis.
- At 2014 summit, hosted by Australia, leaders adopted a plan to boost their economies by a collective 2.1%, which they did not achieve.
- United States blocked a planned reference in the communiqué to the need to “resist all forms of protectionism.” a communiqué to which all its members agreed
- In Argentina summit the G20 members adopted a communiqué to which all its members agreed. However, this communique did not include issues like trade, climate change, and migration.
- G20 has raised Voice for urgent restoration of the dispute settlement system to “contribute to predictability and security in the multilateral trading system”.
- Despite being a member of G20, US under Donald trump had blocked the appointment to WTO appellate body. The new President Biden has yet not taken any action on this issue.
- G20 countries agreed to raise IMF reserves with a new SDR allocation of US $650 billion, critics have argued that given the scale of financing challenge in emerging economies, it is not enough.
- G20 members have failed to break the impasse on climate goals—many countries disapproved of the idea of committing to keeping global warming below 1.5oC and phasing out coal. US, EU, Japan, and Canada want the G20 to cap temperature rise at less than 1.5 degrees and phase out coal by 2025
- Economic Interconnectedness transcends across any rigid divisions of Democracies and dictatorships
- despite being a U.S. ally and a democracy, South Korea is wary of joining a formal D10 or Quad-plus alliance because its economy is interwoven with that of China
- EU is wary of any such coalition (D10) since it recently signed EU-China new investment treaty
- Even Indian can’t afford to alienate friendly undemocratic powers like Vietnam, Iran or Russia, which are important for India’s ambitions of becoming a ‘leading power’ in the world
- US and European powers are themselves not disassociated with undemocratic allies. U.S.’s allies in West Asia remain notoriously authoritarian, and European countries still cultivate client dictatorships in Africa.