G20

A Decade in Multilateralism
V.Srinivas, IAS Chairman Board of Revenue for Rajasthan

Special Lecture at NMML, New Delhi dated March 9, 2018

 90% 80% 2/3rd
of Global GDP of Global trade of Global population

G20
The leading forum of world’s major economies that
seek to develop global policies to address today’s
most pressing challenges

19 Member
Born out of a meeting of G-7 Finance Ministers &
Guest Central Bank Governors who saw the need for a
more inclusive body with broader representation
EU Member in addressing the world’s financial challenges
The G20 has been at the forefront of
battling financial crisis*
The entire range of crisis
response measures –
accommodative monetary
stance, fiscal stimulus, debt
and deposit guarantees,
capital injection, asset
purchases, currency swaps,
keeping markets open were
all derived from the G20
package
* 2008-09: The Global Financial Crisis
* 2010: Eurozone Crisis
 The real power of the G20 is
multilateralism
• The G20 designated as the premier forum for
international economic cooperation
• The G20 formulated an agenda for strong,
A diverse group of stakeholders sustainable & balanced growth; strengthened
& international institutions international financial regulatory system;
reformed the mandate, mission & governance of
coming together to make the IMF; deliberated on Energy Security &
globalization work better for all Climate Change; strengthened the support for
the most vulnerable countries & placed quality
jobs at the heart of the recovery
• The G20 established the Financial Stability Board
(FSB) to include major emerging market
economies to coordinate & monitor efforts in
strengthening financial regulation
 Purpose of G20 – Stewart M. Patrick, Director,
International Institutions & Global Governance, CFR
 G20 – Shared benefits of
globalization
 The G20 Heads of Government & State Summit meetings
have been held since formation in 2008
 The G-20 meetings have enlarged in scope and
number over the past decade. The G20 Meetings
comprise of the following meetings:
a) Meeting of Finance Ministers & Central Bank Governors
Meeting of G20 Deputies
b) G20 Ministerial Meeting on Development
c) Summit Meeting
 30th Nov – 1st Dec

60 Working Group Meetings

11 Finance Meetings
41 Sherpa Meetings
7 Engagement Group Meetings
1 Leaders Summit
Mauricio Macri
President of Argentina
 Impactful journey thus far

• The Washington DC summit formulated the

2008 common principles of reform of financial markets:
• Strengthening Transparency and Accountability
• Enhancing Sound Regulation
• Promoting Integrity in Financial Markets
George
George W.
W. Bush
Bush
• Reinforcing International Cooperation
• Reforming International Financial Institutions
• The Action Plan to Implement the Principles of
Reform contained Immediate Actions by March 31,
2009 & Medium Term Actions
• Continued partnership, cooperation &
multilateralism was the clarion call given by the
Leaders of the G20
 Impactful journey thus far (2)

The Global Plan pledged to

Gordon Brown
 restore confidence, growth and jobs
 repair the financial system to restore
 Leaders faced the greatest challenge to lending
the world economy in modern times  strengthen financial regulation to rebuild
trust
 It was in this backdrop that the Leaders
 fund and reform international financial
of the G20 adopted 3 major declarations institutions to overcome the crisis
 the Global Plan for Recovery & Reform  to promote global trade and invest to
 the Declaration on Strengthening the underpin prosperity
Financial System  build an inclusive green and sustainable
 the Declaration on Delivering resources recovery
through International Financial Institutions
 Impactful journey thus far (3)
 The G20 economies had implemented wide
reaching policy measures that helped stabilize the
confidence, limit the threat of financial stability,
provided impetus to economic growth.
Considerable fiscal stimulus remained in pipeline
through 2010 for the G20 as a whole, & there was a
positive impact on growth & employment

Barack Obama  The G20 faced the key challenge to map a course
between unwinding public interventions in a time-
“IT WORKED” – was what the bound manner & maintaining market confidence
for sustainability of public finances
Leaders of G20 said on September
25, 2009  They also needed to evolve clear communication
of exit strategies. Central Banks needed to unwind
their extraordinary liquidity & credit support and
start tightening their monetary stance
 Impactful journey thus far (4)

Lee Myung-bak
Stephen Harper

The G-20 noted that global recovery was moving at • The G20 adopted the Seoul Development
different paces in different countries, & individual Consensus for Shared Growth that sets out the
countries needed to tailor their responses to their G20’s commitment to work in partnership &
own circumstances complement efforts to achieve Millennium
Development Goals
• The Multi-Year Action Plan on Development to
make a tangible & significant difference in
people’s lives, including in particular the
development of infrastructure in developing
countries
 A focus area: G20 Mutual
Assessment Process (MAP)
 The G-20 Mutual Assessment Process was the mechanism through which
the growth challenge was to be addressed
 The G-20 Mutual Assessment Process showed that appropriate collective
action could increase the global GDP by 2.5 percent over medium term
 The G-20 Mutual Assessment Program envisaged action in 3 areas –
1. fiscal consolidation in advanced economies with credible fiscal plans
starting in 2011
2. economies with surpluses to boost internal demand by spending on
infrastructure, social safety nets & allowing exchange rate flexibility
3. structural reforms in advanced economies – encompassing changes
in labor markets
 A focus area: G20 Financial Sector
Reform
The Financial Sector reform rested on four pillars –
1. a strong regulatory framework, effective supervision,
2. resolution of financial institutions in distress and transparent
international assessment and peer review
3. Banks were required to hold significantly more & higher quality
capital,
4. the Financial Stability Board in consultation with IMF was to make
recommendations on improved supervision, & there would be
greater commitment to the IMF/ World Bank Financial Sector
Assessment Program
Impactful journey thus far (5)
 “The G20 Mutual Assessment Process: From
Pittsburgh to Cannes – IMF Umbrella Report”
 To take stock of the progress made in
delivering upon the policy commitments made
in the Seoul Action Plan, an updated
assessment of G20 macroeconomic frameworks
and a sustainability report of the nature of large
imbalances
Nicolas Sarkozy
 The IMF said that the G20 economies had been
making progress toward the policy
commitments made at the Toronto and Seoul
Summits
Impactful journey thus far (6)
 The Los Cabos Summit of 2012 was held amidst
political impasse in dealing with large imbalances
in the United States & Japan
 The economic activity in the major emerging
market economies had decelerated on the back of
spillovers from advanced economies. The outlook
for growth remained weak with huge downside
Felipe Calderon risks
 The euro area crisis required timely and resolute
policy implementation. Financial conditions
remained fragile
A focus area: Enhanced Surveillance
of World Economy
 the G20’s focus was on enhanced surveillance of the world economy
through the IMF & stronger financial sector regulation through the
Financial Stability Board
 The Surveillance Framework was strengthened through the Integrated
Surveillance Decision & Mutual Assessment Framework.
 The Financial Stability Board started publication of an updated list of
systemically important banks, & the framework for dealing with
systemically important domestic banks
Impactful journey thus far (7)

 The St. Petersburg Summit of the Leaders discussed

issues related to Financial Regulation, International
Financial Architecture, Financial Inclusion,
Financial Education, Consumer Protection, Tackling
Tax Avoidance, Promoting Tax Transparency &
Automatic Exchange of Information
Vladimir Putin  The developmental issues deliberated included
Growth through Quality Jobs, Promoting
Development for All, Sustainable Energy Policy &
Resilience in Commodity Market & Intensifying the
Fight Against Corruption
 Impactful journey thus far (8)

 The G20 set itself an ambitious goal to lift the

G20’s GDP by atleast an additional 2.1 percent
which will add US $ 2 trillion to the global
economy and create millions of jobs
 To promote infrastructure investment, the
G20 agreed to create a Global Infrastructure
Hub with a 4-year mandate. The G20’s actions
Tony Abbott
to deliver quality jobs were to increase
The Brisbane Summit accorded highest investment, trade and competition.
priority to deliver better living
 For generating quality jobs, the G20 set up an
standards & quality jobs for people
Employment Working Group to submit its
across the world. Global recovery was report by 2015
slow and not delivering the jobs
needed
 Impactful journey thus far (9)

 The G20 remained committed to lift their

collective GDP by an additional 2% by
implementation of growth strategies that include
measures to support demand & structural
reforms
Recep Tayyip Erdoğan
 The Anatalya Action Plan reflected the growth
priorities of the G20 along with implementation
The G20’s comprehensive agenda schedules for key commitments
for Anatalya Summit included
 To provide strong impetus to boost investment,
decisive implementation of past country specific investment strategies were
commitments, boosting estimated to increase the G20 investment to GDP
investments & promoting ratio by 1%
inclusiveness
India prepares for
 Impactful journey thus far (10)

NEW FEATURES
 G20 2016 Innovation Action Plan
 G20 New Industrial Revolution Action
Plan
Xi Jinping  G20 Digital Economy Development
Cooperation Initiative
The Hangzhou consensus of the Leaders of
 Enhanced Structural Reforms Agenda
the G20 was based on a vision to strengthen
 The G20 Labor Ministers/ G20
the G20’s growth agenda; forging synergy
Agriculture Ministers
in fiscal, monetary and structural policies;
promoting global trade through greater  Brexit, and the uncertainty it brought to
openness and inclusive growth the global economy
 Impactful journey thus far (11)
 The Hamburg Summit - concrete actions on
building resilience, improving sustainability
& assuming responsibility. Highest priority
was accorded to strong sustainable,
balanced & inclusive growth

 The Hamburg summit also resolved to

Angela Merkel
tackle the common challenges to the global
Despite the United States withdrawal the community including terrorism,
Leaders of the G20 stated that the Paris displacement, poverty, hunger & health
Agreement was irreversible. “Investing in threats, job creation, climate change, energy
Climate, Investing in Growth” was the line of security & gender inequality as a basis for
the G20 as it adopted the Hamburg G20 sustainable development and stability
Climate & Energy Action Plan for Growth
 In summary
 The G20 was successful in • A G20 summit meeting is • The G20 has diversified into
avoiding a 2nd Great Depression preceded by meetings of working climate change, energy security,
in 2009. Since then there has been groups (60), Sherpa meetings (41), agriculture, sustainable
a massive regulatory oversight of Finance meetings (11), development initiatives & skill
financial institutions and banks Engagement Group meetings (7) development
& then finally the Leaders Summit
 The major institutional reform meeting • The landmark event of the
that has been carried out by the Hamburg G20 Summit Meeting
G20, has been the governance • There is a B20 (for business), C20 was the United States distancing
reforms in the IMF & the (for civil society), L20 (for labor itself from global governance,
emergence of the Financial groups and unions), S20 (for poor performance of the WTO,
Stability Board as the major forum scientific and academic and the rise of China & Germany
for a strong regulatory framework community), T20 (for think tanks in the G20
in the financial sector & research institutions), W20 (for
women’s groups) & Y20 (for • The agenda ahead continues to be
 There is a high level of youth leaders) huge be it in trade reform, the
deliberative democracy at work in Sustainable Development Goals,
the G20 meetings the Africa Partnership & Climate
Change
 Conclusion

The G20 has emerged as the world’s premier forum for international
economic cooperation and for forging a comprehensive and integrated
narrative for strong, sustainable and balanced growth
It can be said that the G20 has made a serious contribution to making
globalization fairer and more sustainable while transforming the
processes of international negotiations
The G20 remains committed to the principles of “strong, sustainable,
balanced and inclusive growth.”
The G20 has made a major contribution to setting the global governance
agenda