Simple Explainer: What is G20? What is its agenda? Does it have diplomatic influence?

Prime Minister Narendra Modi has emphasized the importance of international institutions acknowledging the shifting realities in preparation for the forthcoming summit of the Group of 20 major economies that India will be hosting on September 9 and 10. The leader of the world’s most populous nation aims at securing a permanent seat in the UN Security Council. 

Modi urged the United Nations to adapt to the realities of the 21st Century and include the voices that hold significance, as stated in a published interview on Sunday. He called for reforms to the United Nations to acknowledge the changing world’s geo-economic realities and ensure that voices that matter are better represented. 

Modi’s call resonates with the appeal by South African President Cyril Ramaphosa, who called for reforms to the United Nations Security Council at the BRICS summit held in Johannesburg in August. 

Modi, who will be hosting the summit next weekend, in an interview with the Press Trust of India news agency, said a ‘mid-20th Century approach was inadequate for addressing 21st Century global challenges”. 

Modi aims to elevate India’s standing and advocate for its initiatives, including providing relief for debt that is causing significant economic strain and difficulties for nations, on the global stage during the G20 summit beginning on September 9. In the interview, he reaffirmed his backing for the African Union’s bid to gain full membership within the G20. 

The two-day G20 summit will feature India’s most prominent list of attendees to date, including such prominent figures as US President Joe Biden, French President Emmanuel Macron, German Chancellor Olaf Scholz, Saudi Crown Prince Mohammed-bin-Salman and Japan’s Fumio Kishida. China, however, will be represented by Premier Li Qiang and not President Xi Jinping, while Russia has confirmed that President Vladimir Putin will not be able to leave Russia.

Modi stressed the importance of international institutions adapting to evolving circumstances, reevaluating their priorities and ensuring inclusive representation of voices. He further highlighted that India’s G20 presidency had instilled confidence among nations in the so-called Third World.

Modi stated that India’s G20 presidency had highlighted the understanding that anti-inflation policies implemented by one country did not negatively impact others. In other words, managing inflation in one nation can be done without causing harm to the economies of other nations. It underscores the importance of international cooperation and understanding in economic matters.

G20, Diplomatic Influence & 2023 Agenda

The Group of Twenty (G20) forum promotes open dialogue among its member-states, rather than a formal organization. This allows the group to use diplomacy to increase its influence. India, which currently holds the presidency, has chosen a theme for the G20’s 2023 agenda that reflects the interconnectedness of its members. The G20 has become a vital platform for global collaboration and decision-making in our increasingly interconnected global landscape.

The G20 possesses a notable diplomatic advantage in its informal approach. In contrast to formal international bodies, such as the United Nations, the G20 Finance Ministers and Central Bank Governors engage in candid discussions and collaborative decision-making, avoiding strict obligations. 

This informal structure empowers the G20 to wield substantial influence in the global arena while avoiding the burden of binding agreements. Moreover, its capacity to bring together leaders from varied backgrounds and political landscapes enhances its impact, positioning it as a pivotal force in shaping worldwide priorities. 

What is the G20 Grouping?

The G20 global platform that includes the world’s foremost developed and emerging economies originally comprised 19 countries with the largest economies, along with the European Union. The 19 member nations in this grouping jointly represent 85 per cent of the world’s GDP, oversee 75 per cent of international trade and have a combined population that constitutes two-thirds of the global total.

Why was the G20 created?

In response to the 1997-’98 Asian financial crisis, the G20 was formed in 1999 as a forum where Finance Ministers and Central Bank Governors could discuss global economic and financial issues. The G20 is widely acknowledged as the premier forum for international economic cooperation, playing a vital role in shaping and strengthening global structures and governance in addressing critical international economic challenges. 

The group of 20 countries played a key role in making the world’s money system more stable and secure during the global economic crisis in 2008 that threatened to ruin many businesses and people’s lives. They came up with some plans and changes that helped avoid a total economic disaster. 

What are the G20 countries?

The G20 functions without a permanent secretariat or staff. Instead, the G20 presidency rotates annually among its members, representing diverse regional clusters of countries. Consequently, the 19 member nations are divided into five groups, each consisting of four countries. Most of these groupings are organized on a regional basis, typically grouping countries from the same geographical area together.

*  Group 1 (United States, Canada, Australia, Saudi Arabia)

*  Group 2 (Russia, India, Turkiye, South Africa)

These two groups do not follow the norms of regional clusters.

*  Group 3 (Mexico, Brazil, Argentina)

*  Group 4 (United Kingdom, Germany, France, Italy)

*  Group 5 (China, Japan Indonesia, Korean Republic)

The EU, the 20th member, is not affiliated to these regional groupings.

Invited participants encompass Spain, the United Nations, the African Union (comprising its chair and a representative from the New Partnership for Africa’s Development) and the chair of the Association of South-East Asian Nations (ASEAN).

Who holds G20 Presidency?

The G20 presidency rotates on an annual basis among nations from various groups, ensuring that each member-state within a group has an equal opportunity to hold the presidency during their group’s designated term. At present, India, a member of Group 2, holds the G20 presidency from December 1, 2022, to November 30, 2023.

The duties of the G20 presidency involve the coordination of the G20 agenda through discussions with fellow member countries in response to global economic changes. To facilitate a smooth transition, the Presidency receives assistance from a ‘Troika’ or ‘Triad’, consisting of the current, immediate past and future host nations. In India’s current role holding the G20 presidency, the ‘Troika’ includes Indonesia, India and Brazil.

How does the G20 Work?

The rotating G20 presidency is responsible for managing the G20 agenda for a one-year term and arranging the annual G-20 Summit. 

G20 Has Two Separate Paths

*  Finance Track: Typically overseen by Finance Ministers and Central Bank Governors, it is typically under the guidance of the Finance Ministry

*  Sherpa Track: Sherpas supervise year-long negotiations, facilitate  discussions on the Summit’s agenda and coordinate the substantive activities of the G20 

Furthermore, there exists the Engagement Groups that bring together delegates from think tanks, civil society organizations, labour unions, women’s groups, parliamentarians, youth organizations, local and international corporations, as well as researchers from G20 member-nations. The aim is to facilitate a robust collaborative dialogue, promoting wider inclusivity and involvement in shaping global solutions.

What is the G20 Summit?

Annually, the G20 holds a gathering known as the ‘Summit on Financial Markets and the World Economy’, which brings together finance ministers and heads of state from member countries. India, as the current holder of the rotating presidency, assumes the responsibility of hosting this yearly summit.

The leaders aim to achieve unity for collective action, with their focus directed towards a range of fundamental issues. The objective is to conclude the two-day gathering with a collective statement that commits all participants to a common path of action, despite the fact that this statement lacks legal enforceability. Nevertheless, individual meetings can occasionally take priority over formal proceedings.

In 2023, with India at the helm, the G20 will centre its efforts on the theme ‘Vasudhaiva Kutumbakam’, a Sanskrit expression signifying ‘The Earth is One Family’. The forthcoming G20 Summit of 2023 is just around the corner, set to take place on September 9 and 10 at ‘Bharat Mandapam’, located within the ITPO Convention Centre, at Pragati Maidan in New Delhi.

Role of World Bodies in G20

At the request of each presidency, significant international organizations contribute to G20 meetings by providing substantial insights and enriching the discussions. During each G20 Working Group meeting, international multilateral organizations actively participate, assisting in the delivery of data and presenting proposals on critical matters.

* OECD engages in extensive collaboration concerning national growth strategies and the structural policy agenda -- both of which are fundamental components of a framework aimed at fostering strong, sustainable and equitable growth

*  ILO focuses on labour-related issues

*  UNDP and other international organizations focus on development initiatives

*  IEA focuses on matters related to fossil fuels

* WTO and UNCTAD focus on investment monitoring, tariffs, trade barriers and so forth

The author of this article is a Defence, Aerospace and political analyst based in Bengaluru