[Diplomacy] India and Group of 20 (G20) Summits

1. What is G20?
2. Members of G20
3. Which 19 countries are members of G20?
4. Describe the Organizational Structure of G20
5. What is Sherpa’s Track and Finance Track?
6. Write a note on G20 Leaders Summits
7. 2008: 1^st Summit, Washington
8. 2009: 2^nd Summit in London
9. 2009: 3^rd Summit in Pittsburgh
10. 2010: Fourth Summit in Toronto
11. 2010: Fifth Summit in Seoul
12. 2011 Sixth G20 Summit in Cannes
13. 2012 Seventh G20 Summit Los Cabos, Mexico
14. India and G-20
15. Mock Questions

What is G20?

• Group of 20, An international body created in 1999
• It provides a forum for strategic economic communication between industrialized (1^st world) and developing countries.(3^rd world)
• G20 originated as a response to the economic crises of the late 1990s;
• The G20 limits its discussion to economic matters.
  • They’ve discussed the reduction of financial abuses and terrorist funding [but those are related to Economy].
  • They donot talk about Indo Pak / Indo-China border disputes.

Members of G20

• 19 Countries + 1 EU = 20’s group
• IMF and World Bank also participate.

• Countries are represented by finance ministers and central bank governors
• EU is represented by the European Central Bank and a rotating council presidency.

Describe the Organizational Structure of G20

• G-20 operates without a permanent secretariat or staff.
• The chair rotates annually among the members and is selected from a different regional grouping of countries.
• The chair is part of a revolving three-member management group of past, present and future chairs referred to as the Troika.
• Current chair of the G-20 is Mexico; the next Chair will be Russia.

What is Sherpa’s Track and Finance Track?

G20 Summit’s background agenda/preparation is made through two tracks.

Write a note on G20 Leaders Summits

2008: 1^st Summit, Washington

• First Summit was hosted by the US President in Washington in November 2008 to develop a coordinated response to the global financial crisis
• At the First Summit, the Leaders discussed the causes of the global economic and financial crisis and agreed to implement an Action Plan around three main objectives

1. Restoring global growth
2. Strengthening the international financial system
3. Reforming international financial institutions

2009: 2^nd Summit in London

• stimulus package of US$ 1.1 trillion to restore credit and growth
• expansion of Financial Stability Forum (renamed as ‘Financial Stability Board’ or FSB)
• Basel Committee on Banking Supervision (BCBS)
• commitment against protectionist trends (including trade, investment and services)
• commitment to reform of International Financial Institutions.

2009: 3^rd Summit in Pittsburgh

• It designated the G20 as the ‘premier forum’ for international economic cooperation
• Framework for Strong, Sustainable and Balanced Growth’ in the 21st century
• sound macroeconomic policies that prevent cycles of boom and bust through a Mutual Assessment Process (MAP) or ‘peer review’ which is co-chaired by India
• decision to reform the International Financial Institutions by
  • shifting IMF’s quota share to dynamic Emerging Markets and Developing Countries (EMDCs)
  • adoption of a dynamic formula for the World Bank to generate an increase of at least 3% voting power for developing and transition countries that are under-represented;
  • ensuring that World Bank and Regional Development Banks (RDBs) have sufficient resources to address global challenges.

2010: Fourth Summit in Toronto

• Recovery and New Beginnings’ focused on the ‘Framework for Strong, Sustainable and Balanced Growth
• Phase-I work comprising MAP (or ‘peer review’) by groupings of countries.
• Advanced economies have committed to fiscal consolidation,
  • halving of fiscal deficit by 2013
  • stabilizing debt by 2016 as part of internal re-balancing
• differentiated approach to consolidating growth and recovery versus exit strategies and fiscal consolidation, i.e.  ‘growth-friendly fiscal consolidation’.
• Development’ was introduced for the first time on the G20 agenda to be addressed through a High-Level Development Working Group (DWG).

2010: Fifth Summit in Seoul

• theme ‘Shared Growth Beyond Crisis’
• Multi-Year Action Plans (MYAP) under the nine development pillars

1. Infrastructure (including a High-level Panel on infrastructure financing)
2. Human Resources Development
3. Trade
4. Private Investment and Job Creation
5. Food Security
6. Growth with Resilience
7. Domestic Resource Mobilization
8. Knowledge Sharing [so that kids don’t have to goto Kota for IIT coaching]
9. Financial Inclusion [getting poors in the banking and insurance net]

2011 Sixth G20 Summit in Cannes

• Reviewed the global economic situation in the backdrop of the Eurozone/Greek crisis
• regulation of commodity derivatives markets,
• Action Plan on Food Price Volatility and Agriculture [#EPICFAIL: doesn’t seem to be working, foods, veggies and milk are more expensive than ever!]
• increase in transparency of energy markets [lol, talk about coal mining scams]
• Declaration’ titled ‘Building our Common Future: Renewed Collective Action for the Benefit of All’
• Cannes Action Plan for Growth and Jobs

2012 Seventh G20 Summit Los Cabos, Mexico

• promote economic stabilization and structural reforms
• Strengthening the financial system
• fostering financial inclusion to promote economic growth
• Improving the international financial architecture in an interconnected world;
• Enhancing food security
• addressing commodity price volatility
• promote sustainable development,
• green growth and the fight against climate change.

India and G-20

• As a major developing economy India has a vital stake in the stability of the international economic and financial system.
• Therefore, India been actively involved in the G20 preparatory process both at the Sherpas Track and the Financial Track since its inception.
• Our PM has participated in all six G20 summits
• Our Agenda at the G20 Summits is:

1. bring in greater inclusivity in the financial system,
2. to avoiding protectionist tendencies (that is Obama mustnot put heavy tax on firms outsourcing their work to Banglore and EU doesn’t put heavy tax on our medicines.)
3. ensuring that growth prospects of developing countries do not suffer.

• We’ve welcomed the inclusion of development as an agenda item of G20 process at the Seoul Summit
• We have supported the Seoul Development Consensus and the associated Multi-Year Action plans
• Mohan has called for the recycling of surplus savings into investments in developing countries. (Our own savings are around 25% of GDP, All tied up and saved in gold and real-estate.)
• Reforming Bretton Woods’s institutions (that is IMF and World Bank)
• Facilitating trade finance, pushing forward the Doha agenda.   (that is WTO agreement and India’s problem with agro subsidies given to American farmers)
• We remain committed to the G20 process for achieving a stable, inclusive and representative global economic and financial system.

Mock Questions

Which of the following statements are correct?

1. G20 consists of 20 nations
2. Cannes is a city in Germany.
3. Seoul is the capital of S.Korea
4. Los Cabos is situated in Spain
5. Doha is the capital of Baherin.
6. Toronto is the capital of Canada.

For Mains each 150 words/ 15 marks

1. Evaluate the role of G-20 in solving the global financial crisis.
2. Write a note on India’s engagement with G20
3. What were the outcomes of Los Cabos summit of G20?