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The two day G20 summit 2021 was recently concluded in Rome, Italy. The meeting agenda included climate change, the Covid pandemic, a landmark tax deal and global economic scenario. The G20 Summit ended with the adoption of the G20 Rome Leaders’ Declaration.
Note: Indonesia will host the next G20 in 2022, and India will host the meeting in 2023.
The G20 Summit 2021 and G20 Rome Leaders’ Declaration
The Declaration covered the following domains.
Climate change: G20 members 1. Recommitted to providing $100 billion a year to counter climate change, 2. Ending international financing for all new coal plants by the end of 2021, 3. Agreed to achieve a global net-zero emission target “by or around mid-century”.
Note: The declaration made no mention of domestic commitments on ending coal power generation.
|Must read: Net Zero Emissions Target for India – Explained, Pointwise|
Vaccines: Recognition of more vaccines by the World Health Organization under a “One Health approach” and providing finances and technology for vaccine production at “mRNA Hubs” in South Africa, Brazil and Argentina.
|Read more: One Health Approach – Significance and Steps Taken by India|
Taxation: Approved the 15% Global Minimum Corporate Tax.
Global Economy: Pledged to “remain vigilant to the global challenges such as disruptions in supply chains.
Note: India demanded a collation of a clean energy project pipeline financed by developed countries. But it never materialised.
|Read more: “Clean Energy Ministerial” and “Industrial Deep Decarbonization Initiative”|
What is G20?
The G20 (19 countries and the European Union) was born in 1999 as a consultation forum between finance ministers and central bank governors of the world’s major economies.
Following the 2008 economic crisis, it became a forum between Heads of State and Governments, aimed at improving coordination on the main global issues.
At present, G20 nations represent 60% of the global population, 80% of global GDP and 75% of global exports.
The G20 does not have permanent offices or employees. The country that presides over the group (for the year) takes care of all the organization and the logistical coordination of the meetings.
The objectives of the G20 are:(a) Policy coordination between its members in order to achieve global economic stability, sustainable growth (b) To promote financial regulations that reduce risks and prevent future financial crises and (c)To create a new international financial architecture.
|Read more: About the functioning of G20 Grouping|
What are the achievements of G20 groupings?
The main achievements of the G20 include 1. Increased participation of emerging countries in global issues, 2. The reform of international financial institutions, 3. The monitoring of national financial institutions, 4. The improvement in the regulations of the economies whose problems led to the economic crisis and the creation of safety nets to prevent problems in the future.
A few examples of the crucial role of G20 include:
-Quick deployment of emergency funding during the 2008 global financial crisis,
-Its role in the ratification of the Trade Facilitation Agreement,
-G20 driven reforms to the international tax system,
In recent times, the ambit of issues under discussion has been expanded to include climate change, agriculture, health, education, water etc.
What are the challenges associated with G20 Grouping?
The major criticisms include,
-The informal structure of G20: It has no permanent secretariat. The agenda changes every year according to the priorities of the presiding nation. So, critics say that G20 basically was an extension of the G7.
–Influences decision-making of smaller countries: The smaller countries, which are not a member of the G20 grouping, have to implement the declarations and commitments agreed by G20 nations for their growth and opportunity.
For example, the G20 nations agreed to end international financing for coal power plants. So, a small nation can not get any finance from G20 nations for a new coal power plant and has to use its own limited financial resources or phase out coal and look for other alternatives.
–Not able to address challenges within member nations: The G20 grouping is not able to solve the issues within its member nations like the US-China issue on trade, the US – Russia divide on nuclear weapons, etc.
–No Enforcement mechanism: The G20’s toolkit ranges from simple exchanges of information and best practices to agree on common, measurable targets. None of this is achieved without consensus, nor is it enforceable, except for the incentive of peer review and public accountability.
–Under-representation of the African continent: Except for South Africa, none of the African nations is a member of the G20.
Not legally binding: The G20 declarations are not legally binding.
What should be done to revive the G20 Grouping?
Formalisation of G20: The G20 has to include objectives, vision and mission statements, a permanent secretariat, and staff to oversee commitments and ensure continuity in the agenda.
Focus more on domestic commitments: The G20, instead of international commitments, can focus on domestic commitments and start implementing them. For instance, instead of ending international financing for coal power, the G20 Nations should phase out domestic coal consumption. This will create a significant impact as G20 nations represent more than three-quarters of the world’s greenhouse gas emissions.
Make it more representative: A 2011 report had criticised the G20’s exclusivity, so the G20 has to make itself more representative.
In conclusion, over the past decade, the G20 has been an important forum for international cooperation. But to remain the same in future, there must be some reforms in the G20, else, G20 cannot be a panacea for the world’s problems.