G20

The G20 is the premier forum for international economic cooperation and increasingly the central forum for all questions of global governance. It responds to the insight that national action alone falls short in an increasingly networked world.

The G20 began in 1999 as a meeting of Finance Ministers and Central Bank Governors in the aftermath of the financial crises in Latin America and Asia. The initial objective was to preempt balance of payments problems and turmoil on financial markets by improved coordination of monetary, fiscal, and financial policies. In 2008, the first G20 Leaders’ Summit was held to deal with the global financial crisis. G20 leaders have met eleven times since 2008, and there is now a Leaders’ Summit each year.

Informal forum for inclusive global governance

Since then, the G20 is developing from a crisis mechanism into a long-term global governance steering committee. It possesses the necessary weight and legitimacy for that task: Its member states are not only responsible for 85 percent of global gross domestic product (GDP) and three-quarters of global exports (goods and services), but also represent about two-thirds of the world’s population.

Structure

The G20 is an informal forum rather than an organization and possesses no permanent secretariat. Instead, the rotating presidency – in close coordination with the previous and following presidencies (Troika) – is responsible for the G20 agenda as well as organizing working processes, meetings, and events. Since December 2015 till December 2016 China held the G20 presidency. The Federal Republic of Germany took over the presidency in December 2016. Argentina and India will follow.

Being an informal forum, the G20 possesses no executive powers, nor are its decisions binding. All decisions need to be taken by consensus. Whether these are implemented fundamentally depends on its members’ willingness to compromise. This apparent weakness is at the same time one of its great strengths. Also thanks to its informal character does the G20 acquire the flexibility required to generate effective compromises between member-states with diverging interests. Even though decisions are not legally binding between 2008 and 2014 71 percent of all G20 decisions have been implemented by its members.

Furthermore, G20 initiatives have led to the creation or association to the G20 of a number of forums, groups or organizations to implement or follow up on G20 decisions. These include the Financial Stability Board, the Global Infrastructure Hub, the Global Partnership for Financial Inclusion, the Global Platform on Inclusive Business, Global Marine Environment Protection Initiative, the Global Forum on Transparency and Exchange of Information for Tax Purposes, and the Denial of Entry Experts’ Network.

Themes

Unlike the G7, the G20 originally restricted itself to economic and financial issues. The G20’s guiding principles were set out in the Framework for Strong, Sustainable and Balanced Growth adopted at the Pittsburgh Summit in 2009, where the G20 was also officially declared to be the premier international economic forum.

According to the Pittsburg Framework the G20 shall in addition to coordinating fiscal and monetary policies deal with financial supervision including macro prudential and regulatory policies, trade and investment, structural reforms, anti-corruption, and balanced and sustainable economic development.

However, the G20 agenda has been continuously expanding since and is also shaped by current events. In 2015 the G20 Summit dealt inter alia with cyber policy, the global health agenda, anti-terrorism cooperation, and the refugee crisis. Rather than being a steering committee for financial and economic policy the G20 has thus effectively transformed into a holistic forum for global governance with an all-encompassing agenda.

 

The main topics of the G20 Summit 2017 in Hamburg are:

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