Context: This topic is important for UPSE GS Paper 2.
The G20 summit in Rome, agreed to end international public finance for new coal power generation abroad by 2021-end and mobilise funds to support low emission power development to achieve ‘climate goals’ .Let’s understand G20 in detail.
About the G20
The G20 is the international forum that brings together the world’s major economies. Its members account for more than 80% of world GDP, 75% of global trade and 60% of the population of the planet.
The forum has met every year since 1999 and includes, since 2008, a yearly Summit, with the participation of the respective Heads of State and Government.
In addition to the Summit, ministerial meetings, Sherpa meetings (in charge of carrying out negotiations and building consensus among Leaders), working groups and special events are organized throughout the year.
The G20 members are: Argentina, Australia, Brazil, Canada, China, France, Germany, Japan, India, Indonesia, Italy, Mexico, Russia, South Africa, Saudi Arabia, South Korea, Turkey, the United Kingdom, the United States, and the European Union. Spain is also invited as a permanent guest.
Each year, the Presidency invites guest countries, which take full part in the G20 exercise. Several international and regional organizations also participate, granting the forum an even broader representation.
How the G20 works?
The G20 does not have a permanent secretariat: its agenda and activities are established by the rotating Presidencies, in cooperation with the membership.
A “Troika”, represented by the country that holds the Presidency, its predecessor and its successor, works to ensure continuity within the G20.
The Troika countries are currently Saudi Arabia, Italy and Indonesia.
The Finance Track
Within the G20 process, a particular place is reserved for the “Finance Track”, which includes the meetings held among Finance and Economy Ministers, Central Bank Governors, Vice Ministers and Sherpas (negotiators) designated by the respective economic ministries.
The Finance Track mainly focuses on economic, financial, monetary and tax issues. The outcome of this process flows into the broader “Communiqué”, traditionally adopted by the G20 Heads of State and Government at the end of the Summit.
Origins of the G20
In 1999, in the wake of the 1997 economic crisis, the G7 Finance Ministers announced the creation of the “Group of 20”, aimed at including other countries in their discussions related to global economics and finance. The first official meeting of the G20 was held in Berlin in December that same year.
Following the 2008 financial crisis, the United States proposed to increase the level of participation of the G20 to Heads of State and Government.
At the 2009 Pittsburgh Summit, the Heads of State and Government decided to institutionalize the G20 as the main forum for global economic and financial cooperation.
The G20 Leaders have met every year since 2010.
The G20 Alliance for the Empowerment and Progression of Women’s Economic Representation is a special initiative that aims at accelerating women’s leadership and empowerment in the private sector by leveraging its unique alliance among business leaders and governments across the G20 countries.
Launched during the 2019 G20 Summit in Japan and established during the 2020 Saudi Presidency, G20 EMPOWER includes 27 Members from G20 and guest countries.
G20 Innovation League
Hosted by the G20 Italian Presidency, the G20 Innovation League is a unique event dedicated to sharing views and innovative solutions to key global challenges and to fostering international cooperation.
The event will involve G20Members and guest countries, relevant institution representatives, as well as innovation ecosystem players such as VC funds, innovative startups, experts and key businesses in each of the focus areas.
2020- Saudi Arabia
The G20 Summit ended with the adoption of the G20 Rome Leaders’ Declaration
On 30-31 October Rome hosted the G20 Summit, the first held in Italy. At the end of two days of working sessions and side events, the G20 Leaders adopted the Rome Declaration. The document is the final outcome of an intense year of negotiations and events organized in the framework of the Italian G20 Presidency.
G20 Leaders’ Summit 2020
The 15th meeting of Group of Twenty (G20) took place in Riyadh, Saudi Arabia. This event marks the first time that Saudi Arabia will hold the Presidency of the G20.
The Saudi Arabian Presidency has selected the theme, ‘Realizing Opportunities of the 21st Century For All’ .
The three key agenda items to be addressed under this theme are:
‘Empowering People, by creating the conditions in which all people – especially women and youth – can live, work and thrive;
Safeguarding the Planet, by fostering collective efforts to protect our global commons’;
‘Shaping New Frontiers, by adopting long-term and bold strategies to share benefits of innovation and technological advancement’.
Policy Focus of the Group of 20 (G-20)
Initially, the group's discussion had a focus on the sustainability of sovereign debt and global financial stability. Those themes have continued as frequent topics at the G-20's summits, along with discussions about global economic growth, international trade, and the regulation of financial markets.
Under the currentItalian Presidency, the G-20 is focused on three interconnected pillars of action: people, planet, and prosperity. The 2021 summit held in Rome, Italy on Oct. 30th and 31st. Some of the topics at this year's summit will include: supporting SMEs and women-owned businesses, the role of the private sector in the fight against climate change, and sustainable development.
Previously, the 2019 G-20 Osaka summit focused on the global economy, trade and investment, innovation, the environment and energy, employment, women's empowerment, development, and wellness.
In 2018, Argentina proposed a focus on the future of work, infrastructure for development, and a sustainable food future. That meeting also included talks on the regulation of crypto currencies and the U.S.-China trade war.
The Group of 20 (G-20) vs. the Group of Seven (G-7)
The G-20's ranks include all members of the Group of Seven (G-7), a forum of the seven countries with the world's largest developed economies: France, Germany, Italy, Japan, the United States, the United Kingdom, and Canada. Formed in 1975, the G-7 meets annually on international issues, including economic and monetary matters.
Apart from being older than the G-20, the G-7 has sometimes been described as a more political body, since all of its meetings have long included not only finance ministers but chief ministers, including presidents and prime ministers. However, the G-20, since the global financial crisis of 2008, has increasingly held summits that include political leaders as well as finance ministers and bank governors.
And where the G-7 exclusively comprises developed countries, many of the additional 12 nations that make up the G-20 are drawn from those with developing economies. Indeed, having a forum at which developed and emerging nations could confer was part of the impetus for creating the G-20.
Russia and the Group of 20 (G-20)
In 2014, the G-7 and G-20 took different approaches to membership by Russia after the country made military incursions into Ukraine and eventually annexed the Ukrainian territory of Crimea. G-7, which Russia had formally joined in 1998 to create the G-8, suspended the country's membership in the group; Russia subsequently decided to formally leave the G-8 in 2017.
While Australia, host of the 2014 G-20 summit in Brisbane, proposed to ban Russia from the summit over its role, Russia has remained a member of the larger group, in part because of strong support from Brazil, India, and China, who together with Russia are collectively known as the BRIC nations.
Membership of the Group of 20 (G-20)
Along with the members of the G-7, 12 other nations currently comprise the G-20: Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, and Turkey.
In addition, the G-20 invites guest countries to attend their events. Spain is invited permanently as is the current chair of the Association of Southeast Asian Nations (ASEAN); two African countries (the chair of the African Union and a representative of the New Partnership for Africa's Development) and at least one country invited by the presidency, usually from its own region.
Criticism of the Group of 20 (G-20)
Since its inception, some of the G-20's operations have drawn controversy. Concerns include transparency and accountability, with critics calling attention to the absence of a formal charter for the group and the fact that some of the most important G-20 meetings are held behind closed doors.
Some of the group's policy prescriptions have also been unpopular, especially with liberal groups. Protests at the group's summits have, among other criticisms, accused the G-20 of encouraging trade agreements that strengthen large corporations, of being delinquent in combating climate change, and in failing to address social inequality and global threats to democracy.
The G-20's membership policies have come under fire, too. Critics say the group is overly restrictive, and its practice of adding guests, such as those from African countries, is little more than a token effort to make the G-20 reflective of the world's economic diversity.
HINDU EDITORIAL-Time for action
The G20 meeting has come at a critical moment for the global political economy
At their first in-person meeting in two years, leaders of the G20 did not shy away from re-engaging with the biggest issues facing the global community today, including the COVID-19 pandemic, climate change, a major tax agreement, and steps to address concerns regarding global economic growth and stability.
On coordinated efforts to mitigate the pandemic, the focus was on vaccine production and distribution, with assurances of support to WHO’s target of inoculating 40% or more of the global population against COVID-19 by 2021, and at least 70% by mid-2022.
The implicit assumption in this commitment by G20 leaders is that initiatives to boost the supply of vaccines in developing countries will succeed, and cooperation will help the world overcome supply and financing constraints.
On climate change, the Group leaders recommitted their nations to providing $100 billion a year toward adaptation, mitigation, and green technologies, focusing on the needs of developing countries.
However, in this sphere, a divergence of views still exists across developing and developed nations: ahead of this summit and the 2021 climate conference in Glasgow, India had rejected the call to announce a target of zero emissions.
Prime Minister Narendra Modi appears to have scored a victory in this regard as the post-summit communiqué commits the G20 to limiting global warming to 1.5° C and identified sustainable and responsible consumption and production as “critical enablers”.
The world community is on shakier footing regarding the fragile post-COVID economic recovery underway after paralysing lockdowns. Unsurprisingly, given the rising inflation, spiking energy prices, and alarming supply chain bottlenecks, G20 leaders were quick to affirm that national stimulus policies would not be removed prematurely.
Even so, it would remain a challenge to walk the tightrope between preserving financial stability and fiscal sustainability. Perhaps in a bid to avoid potentially debilitating wobbles in global finance, the G20 leadership agreed to slap multinationals with a minimum 15% tax to create “a more stable and fairer international tax system”.
This would impact the tech titans of Silicon Valley, as this initiative would make it harder for such companies to benefit from locating themselves in relatively lower-tax jurisdictions.
This OECD-led reform enjoys the support of 136 countries, which account for more than 90% of global GDP, and is likely to enter into force in 2023 or after.
Nations such as the U.S. are divided on whether to approve this proposal domestically, and unless there is unanimity amongst the discussants, the initiative risks facing implementation delays.
The G20 meeting has come at a critical moment for the global political economy. If it results in timely, effective, coordinated action across major nations, hope for recovery will remain afloat.
Sun, Solar Missions & Solar Phenomenon
Context: This topic is important for UPSE Prelims and Mains GS Paper3.
An aurora also known as the polar lights or aurora polaris, is a natural light display in Earth's sky, predominantly seen in high-latitude regions (around the Arctic&nb
Changes in the Prompt Corrective Action norms for banks
Context: This topic is important for UPSE GS Paper 3.
What will commercial banks under scrutiny need to do to get out of the restrictions imposed by the central bank?
The story so far: The RBI issued a notification on November 2 revising norms for commercial banks to be placed under t
Study on Countries’ commitment on Climate Change
Context: This topic is important for UPSE GS Paper 3.
The findings, while optimistic, come amidst the deliberations underway at Glasgow.
How effective are climate change pledges made by countries in containing global warming?
A study published Friday in the journal Science fin
About National Investment and Manufacturing Zones (NIMZ)
The Government of India (GoI) has announced a National Manufacturing Policy, 2011, with the objective of enhancing the share of manufacturing in GDP to 25% within a decade and creating 100 million jobs. NIMZs are one of the important instruments to achieve it.
As per the Policy, &ldqu
What is an International Financial Services Center (IFSC)?
An IFSC caters to customers outside the jurisdiction of the domestic economy.
Such centres deal with flows of finance, financial products and services across borders.
London, New York and Singapore can be counted as global financial centres.