The G20 began in 1999 as a meeting of Finance Ministers and Central Bank Governors in the aftermath of the financial crises in Asia, Latin America, and Asia. The initial objective was to preempt balance of payment- problems and turmoil in financial markets through improved coordination of monetary, fiscal, and financial policies. In 2008, the first G20 Leaders’ Summit was held to grapple with the global financial and economic crisis. Since then, G20 leaders have met twelve times, and now there is a Leaders’ Summit every year. Germany held the Presidency from December 2016 to December 2017. Since then, Argentina has been in the lead; Saudi Arabia will follow in December 2018.
Informal in Manner but Great in Scope
The G20 is an informal forum rather than an organization, and holds no permanent secretariat. Instead, the rotating presidency – in close coordination with the previous and following presidencies (Troika) – is responsible for the G20 agenda, as well as the organization of working processes, meetings, and events.
All decisions need to be taken by consensus. The prospects of implementation depend largely on members’ willingness to compromise. This apparent weakness is simultaneously one of the great strengths of the G20. Such an informal character allows the G20 the necessary flexibility required to generate effective compromises between its members.
Much More than Crisis Management
The G20’s guiding principles were established in the Framework for Strong, Sustainable and Balanced Growth, adopted at the Pittsburgh Summit in 2009. According to the Pittsburgh Framework, the G20 is to coordinate fiscal and monetary policies and to deal with financial supervision, including macro-prudential and regulatory policies, trade and investment, structural reforms, anti-corruption, and balanced and sustainable economic development.
Since then, the G20 has developed from a crisis mechanism into a long-term global steering committee for financial and economic policy. It possesses the necessary weight and legitimacy for that task, with members not only responsible for about 85 percent of global gross domestic product (GDP) and three-quarters of global exports (goods and services), but also representing approximately two-thirds of the world’s population.
G20 Germany: Shaping an Interconnected World
The G20 Germany cycle was a particularly challenging one. First, it was comparatively short. Beginning in early December 2016 with a meeting of G20 Finance Ministers, G20 countries had only eight months to prepare for the Hamburg Summit. This meant a difficult timetable for the G20 taskforces and working groups. The G20 Germany cycle was additionally demanding because national elections created a great degree of uncertainty (Italy, France), and for several countries, new governments (United States, United Kingdom) had joined the G20 negotiation table with little experience in global governance. Furthermore, long-held consensus on trade and climate change policy eroded, forging agreement all the more onerous.
Last but not least, the work program of G20 Germany was particularly ambitious. The motto of G20 Germany was “Shaping an Interconnected World”. It rested on three pillars: building resilience, improving sustainability, and assuming responsibility. Under this maxim, the Presidency covered a wide range of issues. Many of the topics of the German G20 Presidency have been on the G20 agenda for years, such as financial stability and trade. The Chinese G20 Presidency introduced climate change and digitalization, which also played a major role in the German presidency. A new focus of the German G20 Presidency was on health and the “Compact with Africa”. In addition, new formats such as the pandemic preparedness exercise were introduced under G20 Germany. This translated to a multitude of working and taskforce meetings in a very short time and a challenging schedule for the Sherpa meetings.
G20 Argentina: Building Consensus for Fair and Sustainable Development
With three focal areas “The Future of Work”, “Infrastructure for Development”, and “A Sustainable Food Future”, G20 Argentina aims at “Building Consensus for Fair and Sustainable Development” – their official motto. Further topics on the agenda are empowering women, fighting corruption, continuing work towards a strong and sustainable financial system, improving the fairness of the global tax system, cooperating on trade and investment, taking responsibility on climate action, and transitioning towards more flexible and cleaner energy systems.
G20 Argentina, as previous presidencies, has developed strong outreach. Argentina has invited Spain, Chile, and the Netherlands, as well as the chairs of the Caribbean Community (Jamaica), ASEAN (Singapore), the African Union (Rwanda) and NEPAD (Senegal), to attend the G20 meetings. Given its strong focus on infrastructure investment, Argentina has additionally invited the Inter-American Development Bank and CAF-Development Bank of Latin America. As always, G20 will be supported by international organizations including the United Nations, IMF, World Bank, WTO, OECD, Financial Stability Board and ILO.
G20 Argentina follows the example of G20 Germany by continuing a strong dialogue with civil society. The engagement groups of the G20 are: Business (B20), Civil Society (C20), Labour (L20), Science (S20), Think Tanks (T20), Women (W20) and Youth (Y20).
The G20’s annual agenda includes over 50 meetings of ministers, Sherpas, central bank governors, and world leaders. Each year’s cycle culminates in the Leaders’ Summit. The G20 Summit will take place on November 30, 2018 in Buenos Aires.