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All you need to know about G-20
Highlights
The civil services preliminary examination tests Current events of national and international importance. The paper 3 of the civil services mains examination is Governance, Constitution, Polity, Social Justice and International relations.
The civil services preliminary examination tests Current events of national and international importance. The paper 3 of the civil services mains examination is Governance, Constitution, Polity, Social Justice and International relations.
The syllabi of this paper include Important International institutions, agencies and fora, their structure, mandate; Bilateral, regional and global groupings and agreements involving India and/or affecting India's interests. G20 is an important international organisation as it emerged as premier forum for addressing global economic and financial issues.
It’s a forum of both advanced industrialised or developed nations and emerging economies. This week’s edition of civil services exclusive answers several frequently asked questions on G20 and its summits. This helps civil services aspirants to get a basic perspective on G20. This information is authentic as it’s sourced from government of India’s official literature – Editor
What is the G20?
G20 is a forum of the Heads of Governments of the 19 major economies and the EU for global cooperation on international economic and financial issues.
Who are the members of G20?
Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Korea, South Africa and Turkey, UK, USA and the EU, are the members of G20.
How did this international forum begin?
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. 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 in view of the realisation that some of these key countries are not sufficiently involved in the discussions and decisions concerning global economic issues though their influences were growing in the International financial system.
The current G20 Leaders' forum has emerged from the original G20 with the upgradation of stature of participation from Finance Ministers and Central Bank Governors level to the level of Heads of States when on November 15, 2008, the G20 Leaders met in Washington D.C. on an invitation of US President to act as a crisis manager group in the wake of global financial crisis of 2008.
What are the objectives of G20?
The following objectives have evolved over the last few years of G20's working:
Ensuring international policy cooperation in a coherent manner that is consistent with the contextual business cycles.
Strengthening the financial system, improving the international financial architecture and regulation in an interconnected world to avert and prevent global financial crisis.
Promoting economic growth and sustainable development by addressing the current economic problems, by suggesting measures and initiating actions.
G20 also aims to foster and adopt internationally recognized standards through the example set by its members in areas such as the transparency of fiscal policy, global tax network and combating money laundering and the financing of terrorism.
How does G20 ensure that interests of non-member countries are taken care of in their global decisions?
The Presidency of G20 invites non-member countries and institutions to attend the Leaders' summit. The number of invited non-member countries in any year normally does not exceed five. Invitation is extended to give a fair and balanced geographical representation to non-members. Countries presiding over regional forums, such as the African Union, ASEAN, etc., are invited.
In the Seoul summit held in November 2010, it was decided that among the five non-member invitees at least two must be from African countries. Spain is a permanent invitee. Non-member invitees attend Leaders' meetings and take part in the meeting of Finance Ministers' and Sherpas.
They are also involved in drafting of Summit decisions, and are invited to take part in the Working Group meetings. Under the Russian Presidency, Ethiopia ( chair of AU), Senegal (chair of NEPAD), Brunei Darussalam ( chair of ASEAN), Singapore (chair of the Global Governance Group (3G), Kazakhstan and Spain are attending as invitees.
Which country holds the G20 leadership now?
In the current year G20 Presidency is held by Turkey.
How is the G20 leadership decided?
One of the G20 countries is selected to hold the Chair on rotational basis, better known as “G20 Presidency”.
For selecting a Presidency, a system has come into existence since 2010 when South Korea held the chair. Accordingly, 19 countries have been categorized into the following 5 regional groupings:
Group 1: Australia, Canada, Saudi Arabia, USA
Group 2: India, Russia, South Africa, Turkey
Group 3: Argentina, Brazil, Mexico
Group 4: France, Germany, Italy, U.K.
Group 5: China, Indonesia,Japan, South Korea
Each group holds a maximum of four nations. The chair rotates among the groups and one country from a group is selected in a specific year. Thus, in 2010 South Korea in Group 5 was the chair; in 2011, France in Group 4 was the chair; In 2012, Mexico in Group 3 was the chair; In 2013, Russia in Group 2 was in the Chair; and in 2014, Australia in Group 1 is the Chair.
Which countries held G20 leadership in the past years?
G20 Presidency was held by Australia in 2014, Russia in 2013 and by Mexico in 2012.
Which country will hold G20 leadership next year?
Turkey will pass on the G20 Presidency to China in the next year 2016.
Is G20 an institution like World Bank/IMF/UN?
No. 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.
Does G20 substitute for other multilateral institutions?
No. G20 is not a substitute for other multilateral institutions. However, the G20 maintain close association with multilateral institutions. On the request of G20, these institutions provide expert support and advice as per their respective competence. They provide reports and position papers relating to the Agenda Items. These institutions are also frequently invited to participate in the premier forum and G20 Working Groups meetings.
What is G20 Leaders’ Summit?
The G20 Leaders' Summit is the main G20 event in which all the Heads of States of G20 member countries meet to discuss global economic and financial issues and give direction to the future course of action based on the review of current status. The outcome of the Summit is issued by way of a document called "Communique" or "Declarations".
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; Second, in London on April 2, 2009; Third, in Pittsburg on September 24-25, 2009, Fourth, in Toronto on June 26-27, 2010; Fifth, in Seoul on November 11-12, 2010; Sixth, in Cannes (France) on November 3-4, 2011: Seventh, in Los Cabos (Mexico) on June 18-19, 2012 and eighth in St. Petersburg (Russia) on September 5-6, 2013, and the 9th summit in Brisbane, Australia on November 15-16, 2014. The 10th G20 Leaders Summit will be held in Antalya, Turkey on November 15-16, 2015.
Who represents various countries in Leaders’ Summit?
Heads of States of 19 G20 member countries represent in Leaders' Summit. EU is represented by the President of the European Council. Prime Minister represents India.
How is the 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. These working groups/task forces/committees are generally co-chaired by one advanced and one emerging economy member country of the G20.
The government officials of the Ministries/ Departments that deal with the given thematic subjects in the respective G20 member countries are nominated by their governments to represent as members in the Working Groups.
Representatives of the non-member countries and International Organizations are also invited in these working groups and task forces. Specific G20 Ministerial Meetings such as G20 Agriculture Ministers, Labour Ministers and Trade Ministers are organized on specific themes of importance as identified by the G20 Leaders or the G20 Presidency.
Outcomes of such ministerial meetings feed into the Sherpas Track. Based on inputs from the Finance Track, and Sherpas Track, a draft Communique is drawn and negotiated by Sherpas who have been tasked by their Leaders to negotiate the Summits documents on their behalf.
In the Leaders’ Summit, final reports and documents containing recommendations of the various working groups under the Finance track, Sherpa’s track and Ministerials are submitted to the Leaders, and Leaders adopt the Communique drafted and finalized by Sherpas based on all these inputs.
Are the decisions of G20 legally binding on countries/institutions?
No. 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.
Which documents constitute Official materials?
All the communiqués, Declarations, Statements and reports agreed by the G20 Leaders and Ministers constitute Official materials.
What is the role of international/multilateral organisations in G20?
International organizations provide expert support to the G20. They take on various assignments from G20 Leaders and provide expert advice on matters within their competence. These organizations are actively involved in drafting reports, position papers and proposals on the primary agenda items. They are also invited to attend and participate in various G20 meetings.
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.
How does G20 work to influence global decisions?
G20 accounts for approximately 90 per cent of the World GDP, nearly 80 per cent of World trade and almost two thirds of World Population. Decisions in G20 are taken based on a consensus among members and non-members and international institutions. Consensus on issues is reached through consultations and discussions in Finance Track and Sherpas Track and their subsidiary Ministerials and Working Groups. The participating members voluntarily commit to comply with the G20 decisions.
The current G20 has grown in stature from the original G20 that was established 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.
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 in view of the realisation that some of these key countries are not sufficiently involved in the discussions and decisions concerning global economic issues though their influences were growing in the international financial system.
The Finance Ministers and the Central Bank Governor's Forum was elevated to Head of State's forum in the wake of the global financial crisis in 2008 when the G20 Leaders met in Washington D.C. on November 15, 2008 on the invitation of the US President. The main objective was to cope with the global financial and economic crisis.
Since then, through consultations and cooperation, G20 has played a major role as a crisis manager and successfully contributed in averting further serious consequences of the global financial crisis. Some major decisions in these regards are worth mentioning.
In November 2008, the G20 Leaders agreed to regulate the hedge-funds and the rating companies, and sought to strengthen standards for accounting and derivatives. In April 2009, the Leaders pledged $1 trillion to the IMF and the World Bank to help emerging market countries to offset the effects of recession.
In September 2009, the Leaders established a Financial Stability Board to implement financial reforms. Also they took decisions to regulate tax heavens, and more than deserving executive pay increase in the banks and financial institutions. In June 2010, the Leaders agreed to cut their budget deficits to half by 2013 and to eliminate deficits altogether three years later. In November 2010, the G20 Leaders agreed to bring Development agenda under the G20 discussions.
G20 is now perceived as a global decision making forum for contextual critical global issues that are important for achieving sustainable growth and maintaining stability.Thus, G20's major achievements include strengthening the role of emerging economies, such as BRICS, reforming international financial institutions, improving discipline and tightening oversight over national financial institutions and regulators, improving the quality of financial regulations in economies whose regulatory problems led to the crisis, and creating financial and organizational safety nets to prevent severe economic slumps in the future.
What are the issues being discussed in G20 today?
Turkey has taken over G20 Presidency from Australia on December 1, 2014. Prime Minister of Turkey has outlined that the three I’s of the Turkish Presidency will be:Inclusiveness, Implementation, and Investment for Growth. For Inclusiveness at the domestic level, Turkish Presidency will emphasize issues pertaining to the small and medium sized enterprises (SMEs) as a cross-cutting subject.
At the international level, challenges facing the LIDCs will be raised more vocally. 2015 will be the year of implementation, and that Turkey will put a firm emphasis on investments as a powerful driver of growth and will address the investment gaps of the member countries via concrete and ambitious investment strategies.
Collective action for inclusive and robust growth is stated to be pursued through (i) enhancing resilience; (ii) strengthening recovery and lifting potential; and (iii) buttressing sustainability. The thematic areas outlined under each of these are the following:
Enhancing Resilience
Financial Regulation
International Financial Architecture
International Tax
Anti-corruption
Strengthening recovery and lifting potential
Macro policy coordination
Investment
Employment
Trade
Buttressing sustainability
Development
Energy
Climate Change Finance
What is Sherpas track?
The Sherpas' Track focuses on political, development-oriented non-financial issues such as: agriculture; anti-corruption; develop ment; employment; and energy. The Sherpas delegate policy and technical analysis to working groups drawn from officials from each member country and international organisations, and also facilitate dialogue with a range of stakeholder groups including business groups and academic institutions.
Who is a Sherpa? What is Sherpa’s role?
Sherpa is the personal representative of the Leader/Head of State of a G20 member country. The term is derived from the Sherpa people, a Nepalese ethnic group, who serve as guides and porters in the Himalayas. The Sherpas' track focuses on political, non-financial issues, such as: employment, agriculture, energy, the fight against corruption and development, among others.
The Sherpas carry out important planning, negotiation and implementation tasks throughout the entire process. They coordinate the agenda, seek consensus at the highest political levels and help negotiate the Leaders' positions.
Toward the end of the process, along with the Deputy Finance Ministers, the Sherpas prepare the final declaration statement and other supporting documents for the Leaders. The Sherpas' track delegates technical and policy analysis to a series of working groups, made up of officials from each member country and international organizations.
The Sherpas are also responsible for holding frequent meetings with other relevant stakeholders, such as the business community, academic institutions and young people in order to facilitate an inclusive and representative dialogue.
Source: G20 India Secretariat, Government of India, Ministry of Finance, Department of Economic Affairs
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