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As India gears up to host the 2023 G20 Summit in Delhi next month, here's a closer look at the global bloc that comes together annually to ensure seamless economic and financial coordination.
What is G20?
The Group of Twenty, or G20, comprises 20 of the world's largest economies. It was conceived in December 1999, when finance ministers and central bank governors from emerging economies met in Berlin, Germany, to discuss key issues pertaining to global economic stability through an informal dialogue. This was after the Asian financial crisis that caused a series of devaluation of currencies, among other events in many Asian markets, beginning in 1977.
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According to the ministry of external affairs (MEA), in a document released in August 2012, the Group of Twenty was "created in response to both the financial crises that rose in a number of economies" during the 1990s and because many of the members countries at the time felt that their growth was not "adequately represented in global economic discussions and governance."
Since 1999, finance ministers and central bank governors have continued to meet annually, and India even hosted one of these meetings in 2002.
The meetings were raised to "summit level" in 2008 following the global economic crisis.
Why is it important?
The aim of the group was to bring together advanced and emerging economies for policy coordination to ensure global economic stability and enable sustainable growth. It also works towards promoting financial regulations that can help reduce risks and even prevent future crises. Moreover, the group aims to create "new international financial architecture," according to the MEA.
G20 nations account for about 85 per cent of the global economic output. They also cumulatively make up 75 per cent of global exports and around 60 per cent of the global population, as of December 2022.
Presidency, hosting nations, and troika
G20 summits are held on an annual basis with rotating presidents. This means every year, the members decide on the order of presidency "on the basis of consultations and mutual convenience," according to a PTI release from November 2020, by way of explanation on why India's turn to host the summit was changed from 2022 to 2023.
G20 does not have any permanent secretariat or staff. The presidency is supported by the current, previous and future chairs of the summit. They are referred to as the "troika". The troika for 2023 will, therefore, include India, along with Indonesia and Brazil.
Finance track and Sherpa track
To prepare for a G20 Summit, first, a Sherpa and Finance track must be established in order to follow up on the issues discussed in previous meetings and the commitments made by the countries.
Sherpa track follows the non-financial issues pertaining to development, anti-corruption, and food security, while also addressing international aspects of the G20 and its policy framework.
Sherpa track is coordinated by the Sherpas of member countries, who are personal emissaries of the Leaders.
The finance track focuses on economic and financial issues, ensuring commitments of this nature are met. This track is by finance ministers and central bank governors of the member countries.
The outcome document of the Sherpa-level meetings eventually forms the basis of the "Leaders' Declaration" that is debated on and signed (after reaching a consensus) at the end of the summit.
G20 countries
The G20 comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK, the US and leaders from the European Union. Spain is a permanent guest.
This year, India’s special invitee guest countries will include Bangladesh, Egypt, Mauritius, Netherlands, Nigeria, Oman, Singapore, and the UAE.
Other organisations that are expected to attend the G20 summit 2023 include representatives from the United Nations, IMF and the World Health Organization.
G20 Summits
The first summit was hosted in November 2008 by the United States President in Washington, shortly after the fall of Lehman Brothers in September. Some of the key ideas discussed in the meeting were the restoration of global growth, strengthening the international financial system, and reforming international financial institutions.
In the following two years, the summit was held twice a year in London and Pittsburgh in 2009 and in Toronto and Seoul in 2010.
From 2011 onwards, the summit was hosted once a year. In 2020, due to Covid-19 the summit was hosted virtually instead of Riyadh, Saudi Arabia, as was planned. The following meeting took place in Rome, Italy and in 2022, the G20 summit was hosted in Bali, Indonesia.
The next G20 summit in 2024 will be under the presidency of Brazil.
G20 agenda
Economic and financial coordination remains at the centre of the summits. However, presiding nations may decide on topics and themes that move away from the more traditional macroeconomic policy discussions.
In the 2017 G20 Summit, Germany focused on issues of corruption, money laundering, and international tax havens. In the following year, Argentina discussed fair and sustainable growth. During the coronavirus pandemic, countries at the G20 agreed to suspend debt payments owed to them by poor nations.
In 2021, nations agreed to curb methane emissions under the Italian presidency, which focused on "People, Planet, Prosperity."
In 2022, Indonesia focused on post-pandemic macroeconomic policies. However, the discussions became dominated by debates over Russia's war in Ukraine.
G20 Summit 2023 - India's presidency
India will be hosting the 18th G20 Summit, which spans from December 1, 2022, to November 30, 2023. This will be the country's first time hosting the summit, and it is slated to be held in Bharat Mandapam, Pragati Maidan Convention Centre in New Delhi. The dates for the G20 Summit in Delhi are September 9 and 10.
43 Heads of Delegations are expected to participate in the forum. This would be the largest number of heads of delegations participating in the summit.
India has been an active participant in G20 preparatory processes in both Sherpa and Financial tracks since the group's inception.
India G20 agenda
India's theme for the 2023 G20 Summit is “Vasudhaiva Kutumbakam”, which means "one earth, one family, one future". This closely ties in with the EU's programme for environment and climate action known as LiFE (Lifestyle for Environment).
The MEA shared India's priorities for the summit in December 2022. This includes:
- Green Development, Climate Finance & LiFE
- Accelerated, Inclusive & Resilient Growth
- Accelerating progress on Sustainable Development Goals (SDGs)
- Technological Transformation & Digital Public Infrastructure
- Multilateral Institutions for the 21st Century
- Women-led development
India hopes to use this opportunity to highlight "inclusive growth and development, with women empowerment and representation."
Rising geopolitical blocs - Brics & G7
Similar to the concept of G20, India is also part of Brics, a geopolitical bloc association of five major emerging economies that have come together to foster international collaboration across various key sectors. The aim of this particular group, an inception was to "collectively dominate the global economy by 2050". The name is an acronym of the member countries: Brazil, Russia, India, China, and South Africa.
Another smaller informal bloc is the G7, comprising seven member nations which include the US, Canada, France, Germany, Italy, Japan, and the UK. Similar to G20, this group coordinates on global policy. However, over the years many experts and media reports have questioned the group's relevancy, especially since it does not include major global and emerging economies.
Ahead of the Brics meeting, China pushed for the block to become geopolitical rivals of G7, according to a report by the Financial Times.
At the August 2023 meet, the group decided to add six additional members to provide new dynamics and further develop its partnership model.
