G-20 major economies
Also known as
- Group of Twenty
- G-20 or G20
What is it?
- It is an international forum for the governments and central bank governors from 20 major economies.
- It is not governed by any written rules or laws.
- Though the G-20’s primary focus is global economic governance, the themes of its summits vary from year to year.
- Despite lacking any formal ability to enforce rules, the G-20’s prominent membership gives it a strong input on global policy.
- The forum was created at the initiative of the seven major industrial countries (Canada, France, Germany, Italy, Japan, U.K. and USA) to promote consultations and coordination with the emerging and developing economies.
- Promotion of International Financial Stability through discussions.
- It seeks to address issues that go beyond the responsibilities of any one organization.
- The members include 19 individual countries—Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom and the United States—along with the European Union (EU).
- The EU is represented by the European Commission and by the European Central Bank.
Picture Credits: Wikipedia
Membership in Different Multilateral Institutions
Picture Credits: Wikipedia
- The G-20 was founded in
- The inaugural meeting was held in Berlin in 1999.
- The G-20 is the latest in a series of post-World War II initiatives aimed at international coordination of economic policy.
- Previous initiatives include “Bretton Woods’s twins”, the International Monetary Fund and the World Bank, and what is now the World Trade Organization.
How representative is G-20?
Collectively, the G-20 economies account for
- around 85% of the gross world product (GWP),
- 80% of world trade and
- Two-thirds of the world population.
- Originally, G20 was created in September 1999 as a forum of the Finance Ministers and the Central Bank Governors of the 19 major Economies and the EU in the aftermath of East Asian Crisis of 1997.
- Post Financial Crisis 2007-08, the importance of G-20 grew significantly.
- The G-20 heads of government or heads of state met for the first time in 2008 in Washington, D.C.
- Since then there were many meets at heads of state and government levels.
- The group since 2008 started hosting separate meetings of finance ministers and central bank governors.
- The group formally announced that it would replace the G8 as the main economic council of wealthy nations.
- The G-20 summits came into existence mainly to accommodate emerging economies like India, South Africa etc. which were not adequately represented earlier.
- The heads of the G-20 nations met semi-annually at G-20 summits between 2008 and 2011.
- Since the November 2011 Cannes summit, all G-20 summits have been held annually. [Presently they are annual]
Presidency: G-20 leaders’ chair rotation
- To decide which member nation gets to chair the G-20 leaders’ meeting for a given year, all 19 sovereign nations are assigned to one of five different groupings.
- Each group holds a maximum of four nations.
- This system has been in place since 2010, when South Korea, which is in Group 5, held the G-20 chair.
- Australia, the host of the 2014 G-20 summit, is in Group 1. Turkey, in Group 2, hosted the summit this year.
- The current chair of the G-20 is Turkey; the chair was handed over from
- Australia after the 2014 G-20 summit.
- Turkey will host the 2015 summit in Antalya, while
- China will host the 2016 summit in Hangzhou.
- India to hold G20 Chair in 2018.
- In 2014, Australian as host of 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 released a communiqué reminding Australia that “the custodianship of the G20 belongs to all Member States equally and no one Member State can unilaterally determine its nature and character”.
- So all the decisions are collectively taken, there is no voting process and no decision is made at the discretion of a single party.
- The G-20 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 chair is part of a revolving three-member management group of past, present and future chairs, referred to as the “Troika”.
- The incumbent chair establishes a temporary secretariat for the duration of its term.
- The role of the Troika is to ensure continuity in the G-20’s work and management across host years.
- Each year, the G20’s guests include Spain; the Chair of ASEAN; two African countries (the chair of the African Union and a representative of the New Partnership for Africa’s Development) and a country (sometimes more than one) invited by the presidency, usually from its own region.
- In addition to these 20 members, the chief executive officers of several other international forums and institutions participate in meetings of the G-20.
- These include high level representatives of the International Monetary Fund, the World Bank, etc.
- No representation for some major economies like Spain, Poland, etc.
- Efficient Global Economic Governance is the objective of G-20. But most of the decisions taken are no way related to the economic wellbeing of underdeveloped nations.
- Under-representation of the African continent. There is only one representation from Africa.
- Although Norway is a major developed economy and the seventh-largest contributor to UN international development programs, it is not a member of the EU, and thus is not represented in the G-20 even indirectly.
- Efforts to reform world’s financial institutions met with limited success due to lack of consensus between developing and developed nations.
- The G-20’s transparency and accountability have been questioned by critics. Most important G-20 meetings are closed-door.
- The cost and extent of summit-related security is often a contentious issue in the hosting country.
- G-20 summits have attracted protesters from a variety of backgrounds, including information activists, environmentalists and opponents of crony capitalism.
Is G20 an institution like World Bank/IMF/UN?
- The G20 operates as a forum and is not a multilateral institution like World Bank/IMF/UN. It does not, therefore, have any permanent secretariat or management and administrative structure.
How many Summits have so far been held?
- Nine G20 Leaders Summit have been held so far. First, in Washington D.C. on November 15, 2008.
- Sixth, in Cannes (France) on November 3-4, 2011
- 9th summit in Brisbane, Australia on November 15-16, 2014.
- The 10th G20 Leaders Summit in Antalya, Turkey on November 15-16, 2015.
Summit Declaration or Communique prepared
- The Leaders’ “Declaration” or “Communique” is the final outcome of G20 Summit.
- It highlights the progress made in the G20 work in the past year, the G20 deliverables in the following year and the strategies and action plans to achieve these deliverables.
- There are broadly two channels through which work is done: (i) The Finance Track and (ii) The Sherpa’s Track.
- Both the tracks rely on technical analysis, advice and recommendations of a series of expert Working Groups and Committees on specific thematic issues.
Are the decisions of G20 legally binding on countries and institutions?
- G20 decisions are not legally binding on countries and institutions.
- However, all the members voluntarily commit to comply with the decisions.
- Also, compliances to the commitments made by countries are monitored through Mutual Assessment Process.
What is “Troika” in G20 context?
- “Troika” is a Russian word meaning – a set of three.
- In the G20 context, the immediate past year’s Presidency, the current year’s Presidency, and the next year’s Presidency constitute “Troika” that acts as a Steering Committee to ensure continuity in G20 work.
- The G20 current presidency in 2015 is held by Turkey. In 2014, Australia held the G20 Presidency. In the next year in 2016 China will host the G20 Presidency. These three countries constitute “Troika” at present.
Which department in the Government of India looks after the G20 issues in India?
- G20 India Secretariat in the Department of Economic Affairs provides secretarial and technical support to the Apex Council on G20 Issues, under the Chairmanship of the Finance Minister.
10th G20 Summit, Turkey, 2015
- Prime Minister of Turkey has outlined that the three I’s of the Turkish Presidency will be: Inclusiveness, Implementation, and Investment for Growth.
- But the Paris Attacks and ISIS took the center stage by overshadowing economic issues in this year’s meeting.
- Russian and American Presidents held informal meeting in order to arrive at a conclusion on Syria.
- This year’s G-20 meet is significant as it brought the two arch rivals to the same table over common global issue of terrorism and Syrian Crisis.
- President Obama and President Putin agreed on the need for a Syrian-led and Syrian-owned political transition (finally the two idiots made a right decision – but only after killing thousands, creating refugee crisis, creating a demon called ISIS etc.), which would be proceeded by UN-mediated negotiations between the Syrian opposition and regime as well a ceasefire.
PM Modi on Terrorism
- PM Modi pitched strongly for a combined global initiative to end the menace of Terrorism.
- Modi demanded that the G20 push for stronger, coordinated global action for putting an end to finance, supplies and communication channels of terrorists.
- He stressed for an early adoption of the Comprehensive Convention on International Terrorism.
- He also sought a special international legal regime to take on terrorist activities and cooperation for the prevention of the use of cyber networks by terrorist groups.
- Delink terror and religion, Modi told G20 Leaders.
PM Modi on Back Money
- Seeking global cooperation to fight the black-money menace, the Prime Minister asked G20 nations to freeze and repatriate unaccounted money hoarded abroad.
PM Modi on Reforms
- He also sought immediate implementation of the IMF quota reforms to give emerging markets such as India a greater say.
- He called for steps to strengthen the rule-based global trading system while ensuring that new trading blocs (TPP & RCEP) do not divide the global trade regime.