G20 - Importance, Members, G20 Summit India's Presidency

The G20 Summit is an intergovernmental forum for international economic cooperation that shapes and strengthens global economic architecture and related governance. Although the initial focus of the Group of 20 was primarily on global macroeconomic issues and financial stability, which were the reasons for its genesis, its agenda has been broadened to cover concerns like trade, climate change, sustainable development, health, agriculture, energy, environment, anti-corruption, and so on.

The current G20 Presidency offers a unique opportunity for India to spearhead a collective approach to address various complex economic challenges of the world as well as putting the aspirations of the developing world to the forefront of the platform.

Historical Background of G20 Summit

The Group owes its origin to the Financial Crisis in 1997-98 of the Asian Tigers (Countries of East and Southeast Asia), which caused its establishment in 1999. It worked first as a forum for the Central Bank Governors and Finance Ministers of the major industrialised and developing economies to discuss global economic and financial stability.

Elevation to Leader’s Level: After the 2008 global financial crisis, it was upgraded to the level of Heads of State or Government when it became clear that crisis coordination would be possible only at the highest political level.

• In 2009, it was declared as the “premier forum for international economic cooperation”.
• The G20 Leaders have met on a regular basis since then, and the G20 has emerged as the leading platform for global economic cooperation.

G20 Countries List

G20 comprises 19 countries, namely Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkiye, the United Kingdom, the United States and the European Union.

• These members account for around 85% of the world GDP, 75% of the total international trade, and two-thirds of the global population.
• In addition to these member countries, the G20 each year invites guest countries and international organisations such as the United Nations, World Bank, IMF, OECD, ASEAN, etc., to participate in its meetings.

Structure and Functioning of G20

The G20 operates on the basis of annual meetings of Finance Ministers and Central Bank Governors, with a leaders' summit held once a year. The G20 consists of two parallel tracks called the Finance Track and the Sherpa Track. These two tracks play an active role in shaping ideas and priorities for the host presidency while also guiding the intergovernmental negotiations carried out throughout the presidency. They prepare and follow up on the issues and commitments adopted at the Summits.

Structure of G20 Summit
Sherpa Track	- The Sherpas of member countries are the personal emissaries of the Leaders. - They concentrate on socio-economic issues such as agriculture, anti-corruption, climate, digital economy, education, employment, energy, environment, health, tourism, trade and investment. - They oversee all the negotiations over the year, discuss the agenda for the Summit and coordinate the substantive work of G20.
Finance Track	- It is headed by the Finance Ministers and Central Bank Governors, who generally meet four times a year, with two meetings being held on the sidelines of World Bank /International Monetary Fund meetings. - Focus areas: Fiscal and Monetary policy issues such as global economy, infrastructure, financial regulation, financial inclusion, international financial architecture, and international taxation.

• Troika: The G20 does not have a charter or a secretariat. The Presidency is supported by the Troika, which includes the previous, current, and incoming presidencies. The G20 Presidency hosts the Summit and directs the agenda for a calendar year.
• A non-binding forum: Its decisions are not legally binding, and member countries are not required to implement them.
• Working with international organisations: The G20 members also work closely with international organisations such as the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO).

Significance of G20 Summit 2023

• Wider areas of cooperation: The agenda of the G20 has been expanding from a broad macroeconomic policy to include more areas of cooperation.
  • The G20 summit in Hangzhou (China), 2016, saw the convergence of the US and China on the Paris Agreement. 
  • The G20 summit in Argentina, 2018 focused on fair and sustainable development.
  • G20 summit in Germany, 2021 focused on the issues regarding money laundering, international tax havens, and corruption. 
  • G20 summit in Bali (Indonesia), 2022 focused on financial stability, humanitarian crisis, poverty, and aid to least developed nations, among other things. 
  • Food security: The leaders promised to work together to address food security issues and praised the Black Sea grains initiative.
  • Promoting gender equality: Recognize the importance of gender equality and commit to promoting it by increasing women's participation in the workforce, reducing the gender pay gap, and improving access to education and healthcare. 

• Global balance of power: The G20 promotes a more equitable distribution of power among developed and developing countries than the earlier formed blocs such as G-7 and P-5 (UNSC), which helps to maintain a balance of power at the global level. 

• Bringing adversaries on a common platform: The importance of the G20 lies in its ability to bring together countries with different ideologies, political systems, and economic interests onto a common platform to discuss and address global economic issues.
• Addressing climate change: The G20 has recognised the threat of climate change and has taken some initiatives to address it.
  • The commitments adopted by the G20 members in the domain of climate change revolve around the following issues: energy efficiency and renewables; adoption of advanced and clean technologies; resilient infrastructure; tackling environmental challenges like biodiversity loss; adoption of the Circular Carbon Economy etc.
• Networking and collaboration: The G20 provides an opportunity for leaders from different countries to meet and exchange ideas, strengthening relationships and promoting collaboration on economic issues.
• Global economic cooperation: The G20 has played a critical role in responding to economic crises such as the 2008 global financial crisis, the Eurozone debt crisis, and the COVID-19 pandemic.

Issues and Limitations of G20

While the G20 has played an important role in shaping global economic policies, there are several challenges and limitations to its effectiveness:

• Difficulty in reaching consensus: Countries with a wide range of economic and political systems can make it difficult for them to reach a consensus on important issues.
  • For example, during the 2008 global financial crisis, the G20 struggled to come up with a coordinated response.
  • There has been friction within the group sometimes regarding the issue of climate change.
  • Further, geopolitical tensions such as the Russia-Ukraine crisis also become the bone of contention in reaching the consensus, as observed in the Bali G20 summit as well as during the current India's G20 presidency.
• No Permanent Secretariat: The G20 does not have a permanent secretariat, due to which monitoring becomes cumbersome and inefficient as discussions expand.
• Non-binding decisions: Member countries are not legally bound to implement the decisions made at G20 meetings.
  • For example, the G20 countries had agreed to a set of guidelines for preventing the financing of terrorism, but there is no mechanism to enforce compliance with these guidelines.
• Limited membership: The G20 only includes 19 countries and the European Union, which means that other important economies are not included. Expanding the membership could help to ensure that the group is more representative of the global economy.

India’s G2O Presidency 2023

India is hosting the G20 Leaders' Summit 2023 for the first time in history, with 43 Heads of Delegation attending the final New Delhi Summit in September 2023, the most ever in the G20. Amitabh Kant is the G20 Sherpa of India. India is on a mission to create a shared global future with a rules-based order, peace, and just growth for all through its Amrit Kaal initiative.

• Theme of India’s G20 presidency: “Vasudhaiva Kutumbakam” or “One Earth - One Family - One Future”.
• Troika: During the presidency, the Troika would consist of Indonesia, India and Brazil. 
• Invitees: Other than the members and multilateral institutions, nine countries have been invited - Bangladesh, Netherlands, Oman, Singapore, Nigeria, Spain and the United Arab Emirates, Egypt, and Mauritius.
• African representation: To make G20 more inclusive, India has proposed to include the African Union as a full-time member.
• Challenge for India presidency: In its various G20 meetings, India as a host, has been unable to draft a final joint statement acceptable to all members due to Russia-Ukraine tensions.

India's G20 Priorities

• Green Development, Climate Finance and Lifestyle for Environment (LiFE): India's emphasis on combating climate change, with a focus on climate technology and finance, as well as ensuring equitable energy transitions for developing nations.
• Accelerated, Inclusive & Resilient Growth:Focus on initiatives that could result in structural change, such as: assisting small and medium-sized businesses in international trade, advancing labour rights and welfare, addressing the global skills gap, and constructing inclusive agricultural value chains and food systems.
• Accelerating progress on SDGs: Recommitment to achieving the goals outlined in the 2030 Agenda for Sustainable Development, with an emphasis on addressing the COVID-19 pandemic's effects.
• Technological Transformation and Digital Public Infrastructure: Encouragement of a human-centric view of technology and increased knowledge exchange in areas like financial inclusion, digital public infrastructure, and tech-enabled development in industries like agriculture and education.
• Multilateral Institutions for the 21st century: Efforts to reform multilateralism and build a more accountable, inclusive, and representative global order capable of addressing the challenges of the twenty-first century.
• Women-led Development: In order to promote socio-economic development and the achievement of the SDGs, emphasis should be placed on inclusive growth and development, with a focus on women's empowerment and representation.

Significance of India’s G20 Presidency

• India’s growing economic influence: As the fastest-growing large economy, India’s role in the G20 is critical, and its presidency will help it further strengthen its economic ties with other G20 members.
• India’s leadership on climate change: India has been a strong advocate for climate action. As the world grapples with the challenge of climate change, India’s presidency can help set the tone for global cooperation on this issue.
• India’s focus on inclusive growth: By prioritising inclusive growth, India’s presidency will focus on issues such as infrastructure development, job creation, and women’s empowerment.
• India’s strategic importance: The presidency of the G20 will provide a platform for India to engage with other major powers, including the United States, China, and Russia, on issues of global importance.
• Becoming the voice of Global South: By holding the meeting of the Global South countries along with G20 meetings, India has become the voice of the erstwhile sidelined Global South.
• India’s role in quality healthcare: India has played a leading role in ensuring that developing and low-income countries have access to vaccines, financing, and other resources they need to recover from the pandemic. Thus, India can ensure universal, quality, and affordable health services.