G20 Summit: History and functioning of premier forum for International Economic Cooperation

Leaders from some of the world’s largest economies have arrived in New Delhi for The Group of 20 (G20) Summit—the premier global forum for discussing economic issues. India assumed the Presidency of the forum on December 1 last year, taking over from indonesia.

The members comprise of 19 countries (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, the United States) and the European Union- together accounting for 80 per cent of world GDP, 75 per cent of global trade, and 60 per cent of the global population.

Prime Minister Narendra Modi has hailed the presidency as a huge opportunity for India, and New Delhi is buzzling with final preparations for hosting the Summit. As the Summit begins on September 9, here’s all you need to know about the forum’s origins and workings. 

Evolution of G20

During the final decade of the 20th century, when the global order was undergoing big changes with the fall of the Soviet Union and emergence of newer economies, existing forums such as G7 or World Bank began dwindling and economic pressures could not be surmounted. The 1997 financial crisis, the final nail in the coffin, hit some of the fastest growing economies in East Asia, later spreading its impact to Latin American countries. This led to the convention of G22, as a one time crisis response, but in 1999 two more meetings were held with 33 nations to discuss global economic concerns.

In late 1999, the Group of 20, as seen in its current composition, was founded as a forum for  Finance Ministers and Central Bank Governors to discuss global financial issues. It was later upgraded to the level of Heads of State/Government and was designated the “premier forum for international economic cooperation”. The G20 initially deliberated on macroeconomic policy, but it has since expanded its ambit to also include trade, climate change, sustainable development, energy, environment, anti-corruption, etc.

Organisational Structure

The G20 runs in two parallel tracks : Finance and Sherpa.

The G20 process is led by the Sherpas of member countries, who are appointed representatives of member countries. They are personal emissaries of leaders. They oversee negotiations over the course of the year, discussing agenda items for the Summit and coordinating the substantive work of the G20. 

The Financial Track, headed by finance ministers and central bank governors, meets regularly throughout the year (usually four times) and focuses on fiscal and monetary policy issues.

Within both tracks 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 organisations participate. Non-member invitation has been a tradition and countries being invited change year to year, except Spain, which is a permanent invitee to the Summit. Regular Participants also include IMF, WTO, UN, ILO, FSB, etc. 

The agenda  for a term is influenced by global economic developments as well as by the goals agreed upon in previous years. To ensure institutional continuity, G20 holds a multi-year mandate. Relevant nations and international organisations thereafter implement the cumulative decision. 

India’s Presidency

Since 2011, the G20 Summit has been held annually, under the leadership of a rotating Presidency. The Forum does not have a charter or a secretariat. The Presidency is aided by the countries holding the Presidency before and after it (together called Troika). The Troika  is responsible for setting the agenda of each year’s Summit. Along with India, 2023’s troika includes Indonesia and Brazil.

As the President nation, India will host the 18th G20 Heads of State and Government Summit in December 2023 in New Delhi, thus culminating year long deliberations. Apart from setting the agenda, the host country does not really have any formal powers.

India’s Presidency has come at a time when global inflation and recession trends have troubled many countries around the world. The issue is alleviated by Russia-Ukraine war coupled with European Union’s sanctions on Russia. India itself is reeling with its own set of problems with China, another member nation.

For this year’s theme, India has planned on showcasing its philosophies of Vasudhaiva Kutumbakam (one earth, one family, one future), and LiFE (Lifestyle for Environment).