This topic is very very important for those who are preparing for any competitive exams like UPSC. So we are doing a video series on this topic. The first video is to give a basic idea about the G20 Forum. In the next videos, we will have a detailed analysis of the importance of the summit, its challenges, how India can benefit from the opportunity, etc.
What is G20?
The G20, or Group of Twenty is the premier forum for international economic cooperation. It's an intergovernmental forum of the world’s major developed and developing economies. It comprises 19 countries and the European Union.
Collectively, the G20 accounts for 85% of global GDP, 75% of international trade, and two-thirds of the world population. It plays an important role in shaping and strengthening global architecture and governance on all major international economic issues.
HOW G20 WAS FORMED?
When the Asian Financial Crisis of 1997-1998 ended, it was acknowledged that the participation of major emerging market countries was necessary for a discussion on the international financial system. Hence, the G7 Finance ministers agree to establish the G20 Finance Ministers and Central Bank Governors meeting in 1999. The meeting was centered on major economic and monetary policy issues. Their aim was to promote cooperation toward achieving stable and sustainable global economic growth for the benefit of all countries. As an outcome of this, the G20 was established in 1999 as a platform for Finance Ministers and Central Bank Governors to discuss international economic and financial issues.
The first G20 Summit was held in 2008 in Washington DC and the second in London in April 2009.
In September 2009, the third summit was held in Pittsburgh. In this meeting, the G20 was elevated to the level of Heads of State/Government and was named the "premier forum for international economic cooperation." Until 2010, the summit was held semi-annually and from 2011 onwards, the forum started meeting annually.
What is G20 Troika?
The G20 Summit is held annually with a rotating presidency, and in 2023, India hold the presidency. The troika is the format in which G20 Presidency works. The group does not have a permanent secretariat and is supported by the previous, current, and future holders of the presidency. It is known as the Troika. In 2023, the Troika consists of Indonesia, India, and Brazil.
It is the first time the Troika comprising only developing countries that will set the agenda for two - third of the world population.
HOW G20 WORKS?
The Group does not have a permanent secretariat. The Presidency is supported by the Troika - that is previous, current and incoming Presidency.
The G20 Presidency steers the G20 agenda for one year and hosts the Summit. The G20 consists of two parallel tracks: the Finance Track and the Sherpa Track. Finance Ministers and Central Bank Governors lead the Finance Track while Sherpas lead the Sherpa Track.
The G20 process from the Sherpa side is coordinated by the Sherpas of member countries, who are personal emissaries of the Leaders. Finance Track is led by Finance Ministers and Central Bank Governors of the member countries. 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 Finance Track is mainly led by the Ministry of Finance. These working groups meet regularly throughout the term of each Presidency. The Sherpas oversee negotiations over the course of the year, discussing agenda items for the Summit and coordinating the substantive work of the G20.
In addition, there are Engagement Groups that bring together civil societies, parliamentarians, think tanks, women, youth, labour, businesses and researchers of the G20 countries.
WHAT IS THE PURPOSE OF G20?
The main purpose of G20 is
a) Policy coordination between its members in order to achieve global economic stability, and sustainable growth;
b) To promote financial regulations that reduce risks and prevent future financial crises; and
c) To create a new international financial architecture.
What distinguishes the G7 from the G20?
The G7 has been meeting for many years and is a smaller, more uniform group. The goals of the two organizations are similar, but the G7 is more concerned with issues of politics and security while the G20 is more focused on international economic and financial regulation.
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