Wednesday, February 8, 2023

What is the G20?

Date:

Established in late 1999, following the Asian financial crisis, it first focused on macroeconomic policy but then evolved into a forum to deal with vaccine access, food security, and climate change.

The Group of G20 (G20) comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, and the United States along with the European Union. G20 members currently account for more than 80% of the world GDP, 75% of global trade, and 60% of the global population. 

Organizational Structure 

The G20 does not have a charter or a secretariat. The Presidency, aided by the countries holding the Presidency before and after it (Troika), is responsible for setting the agenda of each year’s Summit. The G20 process is led by the Sherpas of member countries, who are personal emissaries of the Leaders. The Sherpas, oversee negotiations over the course of the year, discussing agenda items for the Summit and coordinating the substantive work of the G20. 

The G20’s work is divided into two tracks: the Finance Track and the Sherpa Track. Within the two tracks, there are thematically oriented working groups in which representatives from the relevant ministries of the members as well as from invited/guest countries and various international organizations participate. The working groups meet regularly throughout the term of each Presidency. The agenda is also influenced by current economic developments as well as by the tasks and goals agreed upon in previous years. The G20 holds a multi-year mandate to ensure institutional continuity. 

Participation by Non-Members 

There has been a tradition of inviting a few non-G20 member countries as guests as well as international organizations. These countries vary from year to year, except Spain which is a permanent invitee. Regular participants in the G20 process are the International Monetary Fund (IMF), the World Bank, the United Nations (UN), the Organization for Economic Co-operation and Development (OECD), the World Trade Organization (WTO), the International Labour Organization (ILO) and the Financial Stability Board (FSB), as well as the countries holding the presidencies of the regional organizations such as ASEAN, the African Union, and the development program NEPAD. The incumbent Presidency may invite other countries and IOsfor G20 meetings and Summits. Previous G20 

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What are the issues the G20 should address?

They are issues that are beyond the capacity of any one country to resolve on its own – such as climate change. There we need G20 meetings with the responsible ministers. With the massive shifts in climate resulting in floods, fires, and droughts all over, and faced with the countervailing pressure of energy supply constraints and the immediate need to rely on fossil fuels while maintaining our collective commitment to a clean energy transition, if the people making the decisions globally are not the ones dealing with these issues at home, then the only thing we will get internationally will be communiqués and not real action. 

We need the same process for health because the next pandemic – which none of us can predict but all of us must expect – will be resolved only by drawing on what we have learned in dealing with Covid-19. The next pandemic will contain surprises, but if the people who respond to them draw on the successes and recognize the mistakes of the last decade, we will overcome them.

One lesson we have all learned is that there can be no successful economy without a healthy population and a healthy environment. Success doesn’t come for free. It costs money, but it’s much less than the cost of delay. This is a global lesson from Africa’s Covid-19 vaccination difficulties, which never should have happened, and must not be allowed to happen again. 

Why is the involvement of finance ministers particularly important?

The one element common to every global issue is cost. How do we pay for it? Finance ministers are always involved in costing so they have a unique and far-reaching understanding of what is, surprisingly, not always well understood. They need to be there as decisions are being taken. This is true for domestic issues of course, but even more so internationally, because perpetual hesitation over cost must not be allowed to prevent a global response to a global attack on society such as a pandemic or indeed climate change and the energy transition. 

Why is the G20 suited to this kind of collaboration?

The origins of the G20 are a clear example of effective collaboration. It was created because the G7 finance ministers needed to draw on a wider range of countries’ experience to deal with certain international issues. When we were responding to the Asian financial crisis that began in 1997, we were told quickly that the challenge was beyond our borders and beyond our capacity. This led the G7 finance ministers to create the finance ministers’ G20, and I can tell you the quality of global debate and approach improved substantially with that response. That process could have taken far longer, but the finance ministers were able to act on their own and they acted quickly. 

That collaboration is what we need at the leaders’ level, to be sure – but also with ministers who deal with climate change and ministers who deal with pandemics, and in all cases with the pertinent global institutions. There is huge expertise in individual countries that need to be made available to the world, but the way to do it is to start with the G20 finance ministers as facilitators.

What about Ukraine?

Unfortunately, it may not be the G20 that stops the war in Ukraine, but it must play a strong role when the time comes to rebuild the Ukrainian economy. Here the G20 cannot ignore its responsibility. It has to be a major player in Ukraine’s economic rehabilitation. 

Continue Reading: Globalgovernanceproject

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