GROUP OF 20
Basics and Backgrounds
- The G20(or Group of Twenty) is an international forum for the governments and central bank governors from 19 countries and the European Union (EU).
- Founded in 1999 with the aim to discuss policy pertaining to the promotion of international financial stability, the G20 has expanded its agenda since 2008 and heads of government or heads of state, as well as finance ministers, foreign ministersand think tanks, have periodically conferred at summits ever since.
- It seeks to address issues that go beyond the responsibilities of any one organization.
- Collectively, the G20 economies account for around 90% of the gross world product (GWP), 80% of world trade(or, if excluding EU intra-trade, 75%), two-thirds of the world population, and approximately half of the world land area.
- Membership of the G20 consists of 19 individual countries plus the European Union. The EU is represented by the European Commissionand by the European Central Bank.
- Spain as a permanent, non-member invitee, also attends leader summits.
- 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
- To create a new international financial architecture.
- 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 (in this case Argentina 2018), it works hand in hand with the previous presidency (Germany, 2017) and the next presidency (Japan, 2019) and this is collectively known as This ensures continuity and consistency of the group’s agenda.
The work of G20 is divided into two tracks
- The finance trackcomprises 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)
- 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.
Agenda of G-20
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
- Fight against corruption
- Advancement of women in job market
- 2030 agenda for Sustainable development
- Climate Change
- Global Health
- Inclusive entrepreneurship
14th G-20 summit
The 14th G-20 summit was held in Osaka, Japan.
Important takeaways for India at G-20
- Taxing global digital companies- India has made a strong case for adoption of “significant economic presence” concept for taxing global digital companies. India had introduced this concept in the Income Tax Act for taxation of non-residents in India or global digital companies.
- Boycotting Osaka Track- India, South Africa, and Indonesia have boycotted the “Osaka Track” on the “digital economy”, as it overtly undermines “multilateral” principles of consensus-based decisions in global trade negotiations, and denies “policy space” for digital-industrialisation in developing countries. It is an initiative launched by Japan’s Prime Minister Shinzo Abe that seeks the removal of
- Prohibitions on data localisation and urges nations to negotiate rules on data flows, cloud computing among others. Countries such as US and Europe have supported it.
- India has also supported the fight against fugitive economic offenders, need for WTO reforms and keeping a close watch on global current account
G-20’s Role in fighting Covid-19
- Today, when the global pandemic COVID-19 is making its way into the annals of the world, G20 needs a more humane touch.
- Realising the dream of a virus-free world will take extra effort from every G20 nation.
- A “reformed multilateralism” is required for making the systems more effective to meet present-day challenges as well as making them more inclusive.
- A humanitarian call by Indian PM for the empathy to nurture within states is an endeavour in the right direction.
- In the Seoul Summit in 2010, the theme ‘Shared Growth Beyond Crisis’ was central. This vividly explains the core agenda of the grouping but undermines the humanitarian issues which need urgent attention.
- The role of G20 will become more active if the leaders will put the parlance into practice by bringing COVID-19 impact and humanitarian agenda into centrality.
- Therefore, as a larger chunk of G20 integrates a larger population, the role of G20 has become more and more fierce and integral. A comprehensive and collective endeavour is a need for an hour for the institution to live.
Relevance of G-20
- Influence on the policies of the countries around the world- It allows the leaders of the world’s major economies to work together to lift growth in mutually-supportive ways and align their domestic policies to the decisions taken by the grouping across Ministerial level meetings and Summits.
- It provides good platform for emerging economies like India, China, Brazil, or Turkey for addressing structural domestic problems of slowing stagnating industrial productivity, job creation, and deflating export prices that requires greater economic cooperation with countries in Europe, the US and Canada.
- Helps in reshaping the governance of global finance- as done by developing strict rules on the “too big to fail” problem, increasing the lending capacity of the International Monetary Fund (IMF) and collecting richer information on the shadow banking system.
- Helps in strategic balancing among countries- such platforms provide opportunities for countries to conduct various bilateral and plurilateral meetings such as JAI (Japan-America-India), RIC (Russia-India- China) which tries to address conflicting interests of various groupings on one platform.