G20

What is the G20?

G20 stands for the Group of Twenty, which according to their site, is the premier forum for international economic cooperation. It plays an important role in shaping and strengthening global architecture and governance on all major international economic issues. The members of G20 represent around 85% of the global GDP, over 75% of the global trade, and about two-thirds of the world population.

The G20 consists of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Türkiye, United Kingdom, United State and the European Union, which is 19 countries and the European Union. (19 countries + EU)

Tracks of G20

The G20’s work is divided into two tracks:

• The Sherpa Track.
• The Finance Track

The Sherpa Track involves a group of senior officials from each member country, known as sherpas, who are responsible for preparing the agenda, negotiating the final communique, and engaging in dialogue on various issues related to economic cooperation. The sherpas typically meet several times throughout the year, leading up to the G20 Summit.

The Finance Track involves finance ministers and central bank governors from each member country, who meet regularly to discuss global economic and financial issues. The Finance Track is responsible for proposing policy measures and initiatives aimed at promoting economic growth, financial stability, and international cooperation. The outcomes of these meetings are then presented to the leaders at the G20 Summit for endorsement.

Both tracks are important in shaping the G20’s agenda and achieving consensus on policy issues. The Sherpa Track provides a forum for senior officials to exchange views and negotiate positions, while the Finance Track allows finance ministers and central bank governors to discuss issues in greater depth and propose concrete policy measures. The two tracks work in parallel to ensure that the G20’s policies and initiatives are well-informed, well-coordinated, and responsive to the needs of the global economy.

Why was it formed?

The G20 was thus created in response to certain financial crises happening in the 1990’s (the IMF crisis being a well-known one) and to a growing recognition that some countries were not adequately represented in global economic discussion and governance.

In December 1999, the Finance Ministers and Central Bank Governors of advanced and economically emerging countries of systemic importance met for the first time in Berlin, Germany, for an informal dialogue on key issues for global economic stability. Since then, Finance Ministers and Central Bank Governors have met annually.

What was the Asian financial crisis?

A sequence of currency devaluations began in July 1997 that spread all across Asia. While it does improve exports, currency devaluation is a sign of weakening economy, because ultimately it is the countries who are buying from affected countries, that are profiting from it.

Back in 1997, the Thailand government ended the local currency’s de facto peg to the U.S. dollar after depleting much of the country’s foreign exchange reserves trying to defend it against months of speculative pressure. Just weeks after Thailand stopped defending its currency, Malaysia, the Philippines, and Indonesia were also compelled to let their currencies fall as speculative market pressure built. By October, the crisis spread to South Korea, where a balance-of-payments crisis brought the government to the brink of default. This contagion spread quickly, and some economies faced rather harsh consequences. This crisis was termed the Asian Financial Crisis.

Country	Fall in GDP due to IMF Crisis
Indonesia	4.7% to -13.1%
Malaysia	7.3% to -7.4%
South Korea	6.2% to -5.1%
Philippines	5.2% to -0.5%

India’s 2023 G20 summit

India is hosting the G20 summit this year! They hold the Presidency from December 1, 2022 to November 30, 2023. The 43 Heads of Delegations (the largest ever in G20)-will be participating in the final New Delhi Summit in September soon.

The logo is inspired from the colours of India’s national flag – saffron, white, green, and blue. It represents planet Earth with the lotus, India’s national flower that reflects growth amid challenges. The Earth reflects India’s pro-planet approach to life, which is in perfect harmony with nature.

The theme of India’s G20 Presidency “Vasudhaiva Kutumbakam” or “One Earth · One Family · One Future” closely ties with LiFE (Lifestyle for Environment). The theme reiterates the value of all lifeforms on this planet and how connected they are in the wider universe. G20 meetings will not be held only to New Delhi or other metropolitan cities. In lieu with the Prime Minister’s vision of an ‘all of government” approach, India will host over 200 meetings in over 50 cities across 32 different workstreams. By this India would have the opportunity to offer G20 delegates and guests a glimpse of India’s rich cultural heritage and provide them with a unique Indian experience.

Amritsar held the second Education Working Group meeting from March 15-17. This is the first of the many meetings to come as the year progresses. The Indian G20 presidency has also planned a year-long India Experience’ for G20 member countries, special invitees, and others.

India’s G20 priorities include:

• Green Development, Climate Finance & LiFE Climate change is a key priority for India’s G20 Presidency, with focus towards climate finance, technology, and ensuring just energy transitions for developing nations across the world. In light of this, India offers the world LiFE** (Lifestyle for Environment) which is a behaviour-based movement that draws from our nation’s rich, ancient sustainable traditions to nudge consumers, and in-turn markets, to adopt environmentally-conscious practices. This ties closely with India’s G20 theme: ‘Vasudhaiva Kutumbakam’ or ‘One Earth. One Family. One Future.
• Accelerated, Inclusive & Resilient Growth:  An accelerated, resilient and inclusive growth is a foundation for sustainable development. There is special focus on areas that can bring about structural transformation. Some of these include an ambition to accelerate integration of MSMEs in global trade, bring in the spirit of trade for growth, promote labour rights and secure labour welfare, etc.
• Accelerating progress on SDGs: India acknowledges the detrimental impact of COVID-19, which changed the current decade of action into a decade of recovery. In line with this perspective, India wants to focus on recommitting G20’s efforts to achieving the targets laid out in the 2030 Agenda for Sustainable Development.
• **Technological Transformation & Digital Public Infrastructure: As G20 Presidency, India can emphasize its belief in a human-centric approach to technology, and facilitate greater knowledge-sharing in priority areas like digital public infrastructure, financial inclusion, and tech-enabled development in sectors ranging from agriculture to education.
• Multilateral Institutions for the 21st century: India’s G20 priority will be to continue pressing for reformed multilateralism that creates more accountable, inclusive, just, equitable and representative multipolar international system that is fit for addressing the challenges in the 21st century.
• Women-led development: India aims to use the G20 forum to highlight inclusive growth and development, with women empowerment and representation being at the core of India’s actions. There is special focus on bringing women to the forefront, and in leading positions, to boost socio-economic development and achievement of SDGs.

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Appendix:

About currency devaluation:

Having a weaker currency relative to the rest of the world can help boost exports, shrink trade deficits and reduce the cost of interest payments on its outstanding government debts. For example, right now 1 dollar is about 80 rupees, if we reduced the value of Indian currency and made 1 dollar as 100 rupees, then for the other countries who want to buy from us, will have a profit, and will buy from us, over other countries, since its an advantage to them.

SDGs:

Sustainable Development Goals

MSME:

Ministry of Micro, Small and Medium Enterprises