G-20: Decade In Multilateralism

Special Lecture By V.Srinivas IAS

Introduction

The rise of the G-20 is a significant development on the global economic horizon. The G-20 is the leading forum of world’s major economies that seek to develop global policies to address today’s most pressing challenges. The G-20 has 19 member countries and the European Union, which represent 90 percent of global GDP and 80 percent of global trade and 2/3rds of the global population. The G-20 was born out of a meeting of G-7 Finance Ministers and Central Bank Governors who saw the need for a more inclusive body with broader representation in addressing the world’s financial challenges.

The G-20 has been at the forefront of battling financial crisis – the Global Financial Crisis 2008-09 and the Eurozone Crisis in 2010 – that have taken a devastating toll on global growth and welfare. In the annals history of financial crisis, the London G-20 summit of April 2009 will be acknowledged as the clear turning point when world leaders showed extraordinary determination and unity. There were sharp differences but they were debated and discussed and compromises were made so as to reach the final goal – of ending the crisis. This resulted in an agreed package of measures having both domestic and international components but all of them to be implemented in coordination and in synchronization where necessary. The entire range of crisis response measures – accommodative monetary stance, fiscal stimulus, debt and deposit guarantees, capital injection, asset purchases, currency swaps, keeping markets open were all derived from the G-20 package. G-20 Leaders summits are attended by the Heads of State and Government.

This paper presents the progress achieved in the G-20 Summit meetings, documenting the specific milestones achieved and the consensus on globalization efforts.

G-20: Navigating the Global Recovery

The G-20 designated as the premier forum for international economic cooperation, has over the past decade, formulated an agenda for strong, sustainable and balanced growth; strengthened international financial regulatory system; reformed the mandate, mission and governance of the International Monetary Fund; deliberated on Energy Security and Climate Change; strengthened the support for the most vulnerable countries and placed quality jobs at the heart of the recovery. The G-20 established the Financial Stability Board (FSB) to include major emerging market economies to coordinate and monitor efforts in strengthening financial regulation. The G-20 was at the forefront of the efforts for shifting 5 percent quota shares in the International Monetary Fund to dynamic emerging markets and developing countries from over represented countries.

Over the past decade the G-20’s agenda has expanded to include additional issues affecting the financial markets, trade and development. The G-20 offers India a place at the High Table to influence and participate in the global decision making processes. Climate change is one area where the pressures of being part of an elite group worked and India accepted the challenge of cutting emissions.

The G-20 Heads of Government and State summit meetings have been held at Washington DC (2008), London and Pittsburgh (2009), Toronto and Seoul (2010) Cannes (2011), Mexico City (2012), Rome (2013), Brisbane (2014), Antalya (2015), Hangzhou (2016) and Hamburg (2017). The real power of the G-20 is multilateralism. A diverse group of stakeholders and international institutions came together to make globalization work better for all.

G-20 Shared Benefits of Globalization

In 2016, the G-20 committed itself to the Action Plan on the 2030 Agenda for Sustainable Development including the Sustainable Development Goals (SDGs) and the Addis Ababa Action Agenda on Financing for Development (AAAA). The 2030 Action Plan envisaged bold transformative steps through both collective and individual concrete actions at international and domestic levels. The G-20 further sought to improve sustainable livelihoods with its endeavors in energy and climate despite the United States Plan to withdraw from the Paris Agreement. The G-20 assumed the responsibility for launching the Africa Partnership in recognition of its goal for fostering sustainable and inclusive economic development.

The G-20 meetings have enlarged in scope and number over the past decade. The G20 Meetings comprise of the following meetings:

1.      Meeting of Finance Ministers and Central Bank Governors (twice a year)

2.      Meeting of G20 Deputies

3.      G20 Ministerial Meeting on Development

4.      Summit Meeting

The G20 has further diversified to include Climate Change, Energy, Skill Development, Science and Technology, Agriculture and Labor Ministers meetings. The G-20 meetings in Argentina in 2018, will have 60 Working Group Meetings, 11 Finance Meetings, 41 Sherpa Meetings, 7 Engagement Group Meetings and 1 Leaders Summit. The G-20 today represents the world’s foremost facet of multilateralism.

The Washington DC Summit: November 2008

In 2008, Global Output was contracting at a pace not seen since 1930s. Trade was plummeting, jobs disappearing rapidly. The world was on the edge of a depression. The Summit on Financial Markets and the World Economy was held on November 15, 2008 in Washington DC amid serious challenges to the world economy and financial markets. The Leaders of the Group of Twenty expressed determination to enhance cooperation and work together to restore global growth and achieve needed reforms in the world’s financial systems. The root causes of the 2008 crisis were inadequate appreciation of the risks building up in financial markets by policy makers, regulators and supervisors in advanced countries. They also felt that inconsistent and insufficiently coordinated macroeconomic policies, inadequate structural reforms led to unsustainable global macroeconomic outcomes. These developments led to severe market disruptions.

The Common Principles for Reform of Financial Markets were the most significant decision of the Summit. The Leaders of the G-20 formulated an Action Plan to Implement the Principles of Reform by the Finance Ministers and Experts. The common principles for reform were (a) Strengthening Transparency and Accountability; (b) Enhancing Sound Regulation; (c) Promoting Integrity in Financial Markets; (d) Reinforcing International Cooperation and (e) Reforming International Financial Institutions

While Regulation was the first and foremost responsibility of the National Regulators, the G-20 decided on intensified international cooperation amongst regulators and strengthening of international standards affecting international financial stability. Effectively the Leaders of the G-20 pledged to bolster investor protection, prevent illegal market manipulation, to strengthen financial market transparency. They further sought to reform the Bretton Woods Institutions to adequately reflect changing economic strengths to increase their legitimacy and expand the Financial Stability Forum by including emerging market countries.

The Action Plan to Implement the Principles of Reform contained Immediate Actions by March 31, 2009 and Medium Term Actions. The Immediate Actions envisaged that the IMF with its focus on surveillance and the expanded FSF with its focus on standard setting should strengthen their collaboration. The adequacy of resources of IMF and World Bank was to be reviewed and the Institutions were asked to restore emerging and developing countries access to credit and resume private capital flows essential for sustainable growth.

The maximum emphasis was on enhancing sound regulation. All G-20 members were to review and report on the structure and principles of their regulatory systems to ensure compatibility with global financial systems. As part of prudential oversight, the G-20 agreed that financial institutions shall maintain adequate capital amounts to sustain confidence. The Regulators were asked to strengthen banks risk management practices in line with international best practices.

The Leaders of the G-20 confronted with a massive Global Financial Crisis, reiterated their commitment to an Open Global Economy. They felt that increasing financial sector regulation was necessary but nothing should be done to contract capital flows and reforms should be grounded in a commitment to free market principles. Continued partnership, cooperation and multilateralism was the clarion call given the Leaders of the G-20 in Washington DC in November 2008.

The London Summit April 2009

At the London Summit of April 2009, the Leaders of the Group of Twenty faced the greatest challenge to the world economy in modern times. Global economic activity was falling and turning around the global growth depended critically on concerted policy actions and concerted policy support. The crisis had deepened since November 2008, and the global crisis required a global solution. It was in this backdrop that the Leaders of the Group of Twenty adopted 3 major declarations – the Global Plan for Recovery and Reform, the Declaration on Strengthening the Financial System and the Declaration on Delivering resources through International Financial Institutions.

The Global Plan pledged to (a) restore confidence, growth and jobs; (b) repair the financial system to restore lending; (c) strengthen financial regulation to rebuild trust; (d) fund and reform international financial institutions to overcome the crisis; (e) to promote global trade and invest to underpin prosperity and (f) build an inclusive green and sustainable recovery.

To restore growth and jobs, the Central Banks of the G-20 took exceptional action. In line with the G-20 framework for restoring lending and repairing the financial sector, Central Banks cut interest rates, Governments put together the largest fiscal and monetary policy stimulus and agreed to put in place credible exit strategies from expansionary policies.

For strengthening financial supervision and regulation, the Financial Stability Board (FSB) with a strengthened mandate was established including all G-20 countries, Spain, and the European Union. The FSB was to coordinate with the IMF to provide early warning systems. To strengthen the global financial institutions, the G-20 committed to implementing the package of IMF quota and voice reforms agreed in April 2008 and called on the IMF to complete the review of quotas by January 2011. The G-20 at London, reiterated the commitment made in Washington DC to refrain from raising new barriers to investment or trade or new export restrictions or implementing the WTO – a pledge extended to end of 2010. The G-20 recognized the human dimension of the crisis, and agreed to create employment opportunities, income generating measures for those who lost jobs. The G-20 agreed to make the best possible use of investment funded by fiscal stimulus programs towards building a sustainable recovery.

The Global Plan for Recovery and Reform was accompanied by the Declaration on Delivering Resources through International Financial Institutions and Declaration on Strengthening the Financial System. The resources to the IMF were trebled to US $ 750 billion, a new SDR allocation of US $ 250 billion and additional resources from IMF gold sales for a US $ 1.1 trillion program lending. The IMF introduced a new Flexible Credit Line (FCL) as part of its reformed and more flexible lending. The scope of regulation brought careful oversight to large and complex financial institutions given their systemic importance. FSB was mandated to coordinate with IMF and BIS to develop macro-prudential tools for regulation. The G-20 also agreed to improve accounting standards and for effective oversight of credit rating agencies. Tax havens were also to be subjected to international prudential and supervisory standards.

The Pittsburgh Summit: September 2009

“It Worked”  – was what the Leaders of the Group of Twenty said on September 25, 2009.The G-20 economies had implemented wide reaching policy measures that helped stabilize the confidence, limit the threat of financial stability, provided impetus to economic growth. Considerable fiscal stimulus remained in pipeline through 2010 for the G-20 as a whole, and there was a positive impact on growth and employment.

The global economy was beginning to grow again, but the recovery was sluggish and policy support required to be sustained for the expansion to be firmly established. Financial conditions continued to improve but markets remained dependent on public support. The Banking systems were undercapitalized and saddled with impaired assets. The biggest risk was a premature exit from accommodative macroeconomic policies.

The G-20 faced the key challenge to map a course between unwinding public interventions in a time-bound manner and maintaining market confidence for sustainability of public finances. They also needed to evolve clear communication of exit strategies. Central Banks needed to unwind their extraordinary liquidity and credit support and start tightening their monetary stance.

The path from Pittsburgh in September 2009 was to Canada in June 2010 and then to Korea in November 2010.

Toronto Summit – June 2010

The G-20 noted that global recovery was moving at different paces in different countries, and individual countries needed to tailor their responses to their own circumstances. The Toronto Summit Communique said that “Those countries with serious fiscal challenges need to accelerate the pace of consolidation. This should be combined with efforts to rebalance global demand to help ensure global economic growth continues on a sustainable path”.

The Leaders Summit developed the G-20 Framework for Strong Sustainable and Balanced Growth. The G-20 sought to build on its achievement of addressing the global economic crisis by ensuring a full return to growth with quality jobs, to reform and strengthen financial systems and to create a strong and balanced global growth. The IMF released it assessment of scenarios for improving growth through the Mutual Assessment Process designed to enhance the synergy of country economic programs to achieve stronger growth worldwide. The G-20 Mutual Assessment Process was the mechanism through which the growth challenge was to be addressed.

The G-20 Mutual Assessment Process showed that appropriate collective action could increase the global GDP by 2.5 percent over medium term, creating tens of millions of jobs and lifting tens of millions out of poverty.The G-20 Mutual Assessment Program envisaged action in 3 areas – first, fiscal consolidation in advanced economies with credible fiscal plans starting in 2011; second, economies with surpluses to boost internal demand by spending on infrastructure, social safety nets and allowing exchange rate flexibility; third, structural reforms in advanced economies –encompassing changes in labor markets that will lift growth and financial reforms on a sustainable basis.

The G-20 Leaders Summit also made progress towards a comprehensive set of new standards to enhance strength and stability of the Financial Sector. A healthier and safer Financial Sector could play a significant role in government interventions to repair the financial system. The Financial Sector reform rested on four pillars – a strong regulatory framework, effective supervision, resolution of financial institutions in distress and transparent international assessment and peer review. Banks were required to hold significantly more and higher quality capital, the Financial Stability Board in consultation with IMF was to make recommendations on improved supervision, and there would be greater commitment to the IMF/ World Bank Financial Sector Assessment Program.

The Leaders of the G-20 supported the IMF quota reforms and to deliver in parallel the other governance reforms in line with the Pittsburgh summit commitments to enhance the IMF legitimacy and credibility.

The Seoul Summit 2010

In November 2010, the Leaders of the G-20 met in Seoul, Korea in a meeting aimed at strengthening the international policy framework to help sustain the global economic recovery.

The Communique said “Cohesion and cooperation defined the G-20 during the crisis. This allowed decisive policy action to help avert a second Great Depression. Now the challenge is to secure the recovery and to create the growth and jobs the world needs. We all recognize that much remains to be done, but the Seoul Action Plan is a step in the right direction.”

The G20 leaders agreed that the Mutual Assessment Program should be continued and country specific commitments should be spelt out in key policy areas. A set of indicative guidelines to help identify large imbalances that require preventive corrective actions to be taken were to be formulated by the IMF and Financial Stability Board. Based on these guidelines the progress towards external sustainability and global consistency of national economic policies. The Fund’s modernized surveillance mandate and instruments – including new country specific spillover reports on the wider impact of systemic economic policies would support this effort. With the objective of strengthening global financial stability the G20 called upon the IMF to deepen its work on capital flow volatility.

The G20 adopted the Seoul Development Consensus for Shared Growth that sets out the G20’s commitment to work in partnership and complement efforts to achieve Millennium Development Goals. The Multi-Year Action Plan on Development to make a tangible and significant difference in people’s lives, including in particular the development of infrastructure in developing countries.

Cannes Summit 2011

On the eve of the Cannes Summit 2011, the IMF submitted a report titled “The G20 Mutual Assessment Process: From Pittsburgh to Cannes – IMF Umbrella Report” to take stock of the progress made in delivering upon the policy commitments made in the Seoul Action Plan, an updated assessment of G20 macroeconomic frameworks and a sustainability report of the nature of large imbalances (key imbalances being public debt & fiscal deficits; private savings and private debt; external position – trade balance). The IMF said that the G20 economies had been making progress toward the policy commitments made at the Toronto and Seoul Summits. At the same time, however the global environment had become much more challenging, as growth in advanced economies had slowed sharply and financial stress had increased. The IMF recommended swift and decisive action to secure the agreed objectives. Major advanced economies needed to articulate medium term fiscal objectives and further financial sector reforms to resolve underlying problems and weaknesses that led to the crisis. Key emerging surplus economies needed to address impediments to rebalancing and allow greater exchange rate appreciation. All of them needed to focus on reforms including in the financial sector aimed at alleviating key impediments to higher growth.

The Cannes Summit 2011, the G20 faced another major challenge in handling the European crisis. The global strategy for growth and jobs was built around endorsing the decisions of the European Leaders to restore debt sustainability to Greece, strengthen European Banks, build firewalls to avoid contagion and lay the foundation for robust economic recovery in Europe. They once again focused on efforts towards a more stable and resilient International Monetary System. The big decision was the SDR basket composition should reflect the role of currencies in the global trading and financial system and the SDR basket was to be reviewed in 2015. The G20 further agreed that the resources of the IMF should be mobilized to implementing the euro area’s comprehensive restructuring plan including country reforms.

The Washington Summit of 2008 had agreed that all financial markets, products and participants would be regulated or subject to oversight. The Financial Stability Board started publishing the list of Global Systemically Important Financial Institutions (G-SIFIs). The G-SIFIs would be subjected to strengthened supervision, a new international standard for resolution regimes as well as from 2016 additional capital requirements. Similarly the systemically important non-bank financial institutions were to be identified. The Financial Stability Board was mandated to coordinate and monitor the G20’s financial regulation agenda.

The other issues that were taken up by the Leaders of the G20 included addressing commodity price volatility and promoting agriculture, improving energy markets and pursuing the fight against climate change, avoiding protectionism and strengthening the multilateral trading system, addressing the challenges of development, intensifying the fight against corruption and reforming the global governance fort he 21st century. The G20 pursued dialogue and cooperation amongst the major international organizations especially the UN, WTO, the ILO, the WB and the IMF.

Los Cabos Summit 2012

The Los Cabos Summit of 2012 of the G20, was held amidst political impasse in dealing with large imbalances in the United States and Japan. The economic activity in the major emerging market economies had decelerated on the back of spillovers from advanced economies. The outlook for growth remained weak with huge downside risks. The euro area crisisrequired timely and resolute policy implementation. Financial conditions remained fragile.

The Leaders of the G20 agreed that they would do everything necessary to strengthen the overall health and growth of the world economy. Their focus was to rebuild the confidence in global financial markets. They felt that the reduction in global imbalances had not been sufficient, and the policy commitments for fiscal tightening in the United States, Japan and Europe remained critical to reduce risks and secure a durable and strong recovery. In this backdrop, the G20 adopted the Los Cobos Growth and Jobs Action Plan.

The European crisis necessitated stronger supervision and direct bank recapitalization. Public finances were to be brought back to a sustainable path. The G20 agreed to move rapidly to a more market determined exchange rate system and exchange rate flexibility and avoid persistent exchange rate misalignments. The enormous focus on exchange rate misalignment was to bring greater flexibility in the renminbi. The G20 also pledged additional resources to the IMF for crisis resolution – an amount of US $ 461 billion pledges were received and US $ 286 billion borrowing agreements were finalized. The G20 also pledged to move faster on the financial sector regulation agenda. They also agreed for faster implementation of the Basel II, 2.5 and III measures and endorsed the charter for the Regulatory Oversight Committee.

In the backdrop of the Global Economic Crisis and the European Crisis, the G20’s focus was on enhanced surveillance of the world economy through the IMF and stronger financial sector regulation through the Financial Stability Board. The Surveillance Framework was strengthened through the Integrated Surveillance Decision and Mutual Assessment Framework. The Financial Stability Board started publication of an updated list of systemically important banks, and the framework for dealing with systemically important domestic banks. The G-SIFI supervision was intensified and greater transparency of financial institutions encouraged.

Further the G20 promoted Sustainable Development Policies and incorporated green growth into their agenda. They resolved to phase out medium term inefficient fossil fuel subsidies that encouraged wasteful consumption. A G20 Climate Finance Study Group was constituted to effectively mobilize resources for climate finance.

Saint Petersburg Summit 2013

The agenda for the Saint Petersburg Summit of the Leaders of G20 covered a diverse range of issues. The financial issues discussed were Financial Regulation, International Financial Architecture, Financial Inclusion, Financial Education, Consumer Protection, Tackling Tax Avoidance, Promoting Tax Transparency and Automatic Exchange of Information. The developmental issues deliberated included Growth through Quality Jobs, Promoting Development for All, Sustainable Energy Policy & Resilience in Commodity Market and Intensifying the Fight Against Corruption.

The G20’s coordinated action had done much to stabilize the world economy and the financial system. Yet there was much to be done to get the world economy work better. Global growth remained subdued, with persisting market volatility and stability risks. While the advanced economies were gathering some momentum, the emerging markets were showing a slowdown. The Saint Petersburg Action Plan stressed the importance of cooperation as countries addressed the challenges of promoting global growth, jobs and financial stability. The action plan recognized the need for fiscal consolidation to reflect economic conditions, the need to push forward on financial oversight and regulation, and the importance of comprehensive structural reforms to support growth.

The Saint Petersburg Action Plan recognized the need for supportive monetary policyand the need to ensure an orderly exit from the unconventional monetary policies, effectively managing spillovers. The G20 made progress on tax evasion and tax avoidance and recognized that international taxation was an important area of multilateral discussions. The G20 also continued support for IMF’s 2010 quota reform and the urgent need to ratify the agreement.

Brisbane Summit November 2014

The Brisbane Summit meeting of the Leaders of G20 accorded highest priority to deliver better living standards and quality jobs for people across the world. Global recovery was slow and not delivering the jobs needed. There was a shortfall in demand and risks persisted in financial markets. The G20 set itself an ambitious goal to lift the G20’s GDP by atleast an additional 2.1 percent which will add US $ 2 trillion to the global economy and create millions of jobs.

To promote infrastructure investment, the G20 agreed to create a Global Infrastructure Hub with a 4-year mandate. The G20’s actions to deliver quality jobs were to increase investment, trade and competition. For generating quality jobs, the G20 set up an Employment Working Group to submit its report by 2015.

The G20 had delivered on strengthening the resilience of the global economy and stability of the financial system. The Financial Stability Board proposed that systemically important banks hold additional loss absorbing capacity to protect taxpayers if the banks fail which was accepted by the G20. The G20 made further progress in the areas of international taxation. They further reiterated that the IMF Quota and Governance reforms and the 15th General Review of Quotas agreed in 2010 remains the G20’s highest priority and urged the United States to ratify them.

The G20 agreed on several developmental issues with special emphasis on climate change. They agreed to support mobilizing finance for the Green Climate Fund. They also sought to have a coordinated approach for Ebola.

Anatalya Summit November 2015

The G20’s comprehensive agenda for Anatalya Summit included decisive implementation of past commitments, boosting investments as a powerful driver of growth and promoting inclusiveness so that benefits of growth are shared. The G20 remained committed to lift their collective GDP by an additional 2 percent by implementation of growth strategies that include measures to support demand and structural reforms. The Anatalya Action Plan reflected the growth priorities of the G20 along with implementation schedules for key commitments. To provide strong impetus to boost investment, country specific investment strategies were estimated to increase the G20 investment to GDP ratio by 1 percent.

The G20 remained committed to strengthening resilience of financial institutions and enhancing the stability of the financial system. The G20 finalized common international standard on total loss absorbing capacity for systemically important banks. They agreed to strengthen the oversight and regulation of the shadow banking system to ensure resilience of market-based finance. To reach a globally fair and modern international tax system, a package of measures developed under the G20/ OECD Base Erosion and Profit Sharing Project were adopted, in particular the exchange of information on cross-border tax rulings. A G20 Anti-Corruption Plan and the G20 High Level Principles on Integrity and Transparency in Private Sector were also adopted to bring transparency in private sector. To bring transparency in public sector, the G20 Principles for Promoting Integrity in Public Procurement were adopted.

The G20’s developmental agenda included adoption of the G20 and Low Income Developing Countries Framework to strengthen the dialogue on development. The 2030 Agenda including Sustainable Developmental Goals (SDGs) remained the basic framework for the G20’s developmental agenda. The G20 continued its work on Global Partnership for Financial Inclusion and on the G20 Principles for Energy Collaboration. On Climate Change the G20 reaffirmed its commitment to the below 2 degrees C goal and to contribute to the UNFCCC ahead of the Paris Conference on Climate Change.

Anatalya witnessed the diversification the G20 Agenda to cover Energy Sector issues and greater commitment to multilateral collaboration for Climate Change initiatives.

Hangzhou Summit September 2016

The Hangzhou consensus of the Leaders of the G20 was based on a vision to strengthen the G20’s growth agenda; forging synergy in fiscal, monetary and structural policies; promoting global trade through greater openness and inclusive growth. The global economic recovery was progressing and new sources of growth were emerging. There were profound shifts in the configuration of the global economic landscape.

The growth strategy was to strive to reduce excessive imbalances and promote greater inclusiveness. That said, the G20 felt that excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. A new path for growth was to be charted with the G20 2016 Innovation Action Plan which sought to pursue pro-innovation policies, investments in science, technology and innovation (STI), support skills training for STI, and mobility of human resources. They also delivered the G20 New Industrial Revolution Action Plan to strengthen SME’s and address workforce skill challenges. Further the G20 Digital Economy Development Cooperation Initiative was formulated to unleash the potential of digital economy. An Enhanced Structural Reforms Agenda was adopted consistent with country specific choices.

The G20 welcomed the entry into effect of the 2010 IMF Quota and Governance reform and sought early completion of the 15th Quota review to reflect the shares of dynamic economies in line with their relative positions in the world economy. Paris Club the principal international forum for restructuring official bilateral debt was expanded to include Korea, Brazil and China. The G20 remained committed to a resilient financial system through the Financial Stability Board.

The Hangzhou Communique laid emphasis on robust international trade and investment as also inclusive and interconnected development. The Hangzhou Comprehensive Accountability Report on G20 Development Commitments reflected the progress made over the period 2014-16. The G20 Labor Ministers, G20 Agriculture Ministers meetings were also included in the Developmental Agenda.

Further the G20 took note of Brexit, and the uncertainty it brought to the global economy. The G20 felt its members were well positioned to address the potential economic and financial consequences of Brexit. The G20 reiterated its support for Climate Change and supported the Green Climate Fund.

The Hangzhou summit reaffirmed the G20’s founding spirit to bring together the major economies on an equal footing to catalyze action. The G20 had expanded into several new areas in its developmental agenda.

Hamburg Summit July 2017

The Hamburg Summit decided to take concrete actions on the three aims of building resilience, improving sustainability and assuming responsibility. Highest priority was accorded to strong sustainable, balanced and inclusive growth. Further the G20 recognized that globalization and technological change had raised living standards across the globe, but its benefits had not been shared widely enough. The Hamburg summit also resolved to tackle the common challenges to the global community including terrorism, displacement, poverty, hunger and health threats, job creation, climate change, energy security and gender inequality as a basis for sustainable development and stability.

The Leaders of the G20 took note of the decision of the United States to withdraw from the Paris Agreement. The United States had announced that it would cease the  implementation of its nationally determined contribution and adopted an approach that lowers emissions while supporting economic growth. Despite the United States withdrawal the Leaders of the G20 stated that the Paris Agreement was irreversible. “Investing in Climate, Investing in Growth” was the line of the G20 as it adopted the Hamburg G20 Climate and Energy Action Plan for Growth.

Conclusion

The G20 has emerged as the world’s premier forum for international economic cooperation and for forging a comprehensive and integrated narrative for strong, sustainable and balanced growth. The G20 was successful in avoiding a second Great Depression in 2009 by putting together the largest taxpayer funded bailout of the global financial system. Since then there has been a massive regulatory oversight of financial institutions and banks. The major institutional reform that has been carried out by the G20, has been the governance reforms in the IMF and the emergence of the Financial Stability Board as the major forum for a strong regulatory framework in the financial sector.

The G20 has diversified into climate change, energy security, agriculture, sustainable development initiatives and skill development. A G20 summit meeting is preceded by meetings of working groups (60), Sherpa meetings (41), Finance meetings (11), Engagement Group meetings (7) and then finally the Leaders Summit meeting. There is a B20 (for business), C20 (for civil society), L20 (for labor groups and unions), S20 (for scientific and academic community), T20 (for think tanks and research institutions), W20 (for women’s groups) and Y20 (for youth leaders). There is a high level of deliberative democracy at work in the G20 meetings.

The last G20 summit cost Germany 130 million euros, marked by violent protests against globalization on a daily basis causing an upheaval in the daily lives of citizens. The landmark event of the Hamburg G20 Summit Meeting was that it had to deal with the United States distancing itself from global governance, poor performance of the WTO with the slow death of the Doha Round of Trade negotiations of WTO, and the rise of China and Germany in the G20. The G20 remains committed to the principles of “strong, sustainable, balanced and inclusive growth.”

The agenda ahead continues to be huge be it in trade reform, the Sustainable Development Goals, the Africa Partnership and Climate Change. The G20 has made a major contribution to setting the global governance agenda. To conclude it can be said that  the G20 has made a serious contribution to making globalization fairer and more sustainable while transforming the processes of international negotiations.

References

1.      Declaration – Summit on Financial Markets and the World Economy, 15 November 2008, Washington United States, www.g20.org

2.      The Global Plan for Recovery and Reform, 2 April 2009, London, United Kingdom, www.g20.org

3.      Declaration on Delivering Resources through the International Financial Institutions, 24 April 2009, London, United Kingdom, www.g20.org

4.      Declaration on Strengthening the Financial System, 2 April 2009, London United Kingdom, www.g20.org

5.      The Leaders’ Statement – The Pittsburgh Summit, 24-25 September 2009, Pittsburgh, United States, www.g20.org

6.      The G20 Toronto Summit Declaration, 26-27 June 2010, Toronto, Canada, www.g20.org

7.      IMF Staff note to G20, 26-27 June 2010, Toronto Summit, Canada, www.imf.org

8.      The G20 Seoul Summit Leaders’ Declaration, 11-12 November, 2010, Seoul, Korea, www.g20.org

9.      The Seoul Summit Document, 11-12 November, 2010, Seoul, Korea, www.g20.org

10.  The Seoul Development Consensus for Shared Consensus for Shared Growth, 11-12 November, 2010, Seoul, Korea, www.g20.org

11.  IMF Report on G20 Mutual Assessment Process (MAP), 11-12 November 2010, Seoul Summit, Korea, www.imf.org

12.  Final Declaration, 2-4 November 2011, Cannes, France, www.g20.org

13.  G20 Leaders’ Communique, 2-4 November 2011, Cannes, France, www.g20.org

14.  The Cannes Action Plan for Growth and Jobs, 2-4 November 2011, Cannes France, www.g20.org

15.  IMF Staff Reports for the G-20 Mutual Assessment Process, November 3-4, 2011, Cannes Summit, France, www.imf.org

16.  G20 Leaders’ Communique, 18-19 June 2012, Los Cabos, Mexico, www.g20.org

17.  G20 Leaders’ Declaration, 18-19, 2012, Los Cabos, Mexico, www.g20.org

18.  G20 Leaders’ Declaration, 5-6 September 2013, Saint Petersburg, Russia, www.g20.org

19.  G20 5th Anniversary Vision Statement, 5-6 September 2013, Saint Petersburg, Russia, www.g20.org

20.  G20 Roadmap Towards Strengthened Oversight and Regulation of Shadow Banking, 5-6 September 2013, Saint Petersburg, Russia, www.g20.org

21.  G20 Leaders’ Communique, 15-16 November 2014, Brisbane, Australia, www.g20.org

22.  G20 Leaders’ Communique, 15-16 November 2015, Anatalya, Turkey, www.g20.org

23.  G20 Leaders’ Communique, 4-5 September 2016, Hangzhou, China. www.g20.org

24.  Hangzhou Action Plan, 4-5 September 2016, Hangzhou, China, www.g20.org

25.  G20 Leaders’ Declaration, 7-8 July 2017, Hamburg, Germany, www.g20.org

26.  G20 Hamburg Action Plan, 7-8 July 2017, Hamburg, Germany, www.g20.org

G20- A decade in multilateralism – A lecture by V.Srinivas IAS

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