The Prime Minister of India has recently said that the Group of 20 (G20) major economies has an important role to play in tackling the global coronavirus crisis as the G20 leaders prepared to meet for a ‘virtual summit’ (being coordinated by the Saudi G20 Presidency) to agree on a coordinated response.
- Saudi Arabia, which holds the G20’s rotating presidency this year, announced to convene an “extraordinary session" for preparing a common strategy to tackle the challenge posed by Covid-19, in concurrence with other members of G20.
- The statement from Saudi Arabia,, followed a telephonic conversation between the kingdom’s Crown Prince and PM of India recently.
- The move comes amid fears of the world slipping into a recession comparable or worse to the 2008 financial crisis that triggered the formation of the G20 as a grouping.
- Global markets have crumbled after the WHO declared the Covid-19 outbreak a pandemic, spooking investors.
- Many countries have closed borders and imposed travel curbs besides advising shopping complexes to down shutters to curb the disease.
What role G20 has to play?
The G20 has an important global role to play in addressing the Covid-19 pandemic.
- A huge task on hand: The Covid-19 contagion that surfaced in China has roiled global stock markets and caused major disruption across sectors. Recently, the International Monetary Fund (IMF) warned that the global economy could be staring at a recession as bad as or worse than the one during the global financial crisis of 2008.
- Meet to advance a coordinated global response: To the Covid-19 pandemic and its human and economic implications. For example, At a meeting of G20 finance ministers, the grouping agreed to develop a joint action plan in response to the Covid-19 outbreak, which will outline the individual and collective actions that G20 member states will undertake to contain the pandemic.
- Address the risk of debt vulnerabilities: Furthermore, G20 finance ministers and governors discussed ways for stepping up coordinated efforts by bilateral and multilateral creditors to address the risks of debt vulnerabilities, especially in low-income countries, amid the Covid-19 pandemic.
Why are coordinated efforts required?
- Covid-19 has led to a serious downturn, similar to an economic tsunami, in the global economy and the extent of economic damage caused by the pandemic will depend on the trajectory of the virus and how quickly governments respond.
- Since its emergence in December, Covid-19 has claimed over 19,600 lives.
- The G20 have to act, alongside international organisations, in any way deemed necessary to alleviate the impact of the pandemic.
- G20 leaders have to put forward a coordinated set of policies to protect people and safeguard the global economy.
- The summit has to build on the ongoing efforts of the G20 finance ministers and central bank governors, senior health, trade, and foreign affairs officials, to further develop the precise requirements and actions needed.
Image Source: NY Times About G-20
- Formally the Summit on Financial Markets and the World Economy the G20 meeting is an annual gathering of finance ministers and heads of state representing the members.
- Initially attendance at G20 summits was limited to the finance ministers and central bank governors of members when it was established 17 years ago.
- Much of the important business takes place on the sidelines and in informal meetings.
- After the Asian Financial Crisis in 1997-1998, it was acknowledged that the participation of major emerging market countries is needed in discussions on the international financial system, and G7 finance ministers agreed to establish the G20 Finance Ministers and Central Bank Governors meeting in 1999.
- The first G20 summit occurred in Berlin, in December 1999, and was hosted by the German and Canadian finance ministers.
About Membership and Leadership of the Group of 20 (G-20)
- Members: The G20 is made up of the EU and 19 countries.
- 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.
- Special invitees: In addition 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.
- International organizations such as the IMF, the World Bank, the United Nations, the Financial Stability Board and the World Trade Organization also attend the summits.
- Chairmanship: The chairmanship of the G-20 leaders' summit rotates among four groups of countries.
- The host country of the G20 summit leads the group over the course of one year from December through the following November as the G20 presidency.
- Sherpas, who are representatives of leaders of G20 member countries, coordinate on the agenda of a summit. Former Union Minister Suresh Prabhu was India's Sherpa at the Osaka G20 summit.
- There are two tracks in G-20 - Finance Track and Development Track.
- Finance Track is managed by the secretary (economic affairs) as India’s Deputy to G-20 and
- The Development Track is coordinated by the Sherpa.