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G20 leaders met in Rio de Janeiro on November 18-19, 2024 for the 19th summit with an agenda that reflects a shifting global order towards shoring up multilateral consensus before US president-elect Donald Trump returns to power in January next year. Brazilian president Luiz Inacio Lula da Silva opened the summit with the launch of a global alliance to combat poverty and hunger.
The Group of Twenty (G20) was formed in 1999 in the wake of the Asian Financial Crisis as a forum for the Finance Ministers and central bank governors to discuss global economic and financial issues. It consists of 19 countries and two regional bodies = the African Union (AU) and the European Union (EU). The first summit was held in 2008 in response to that year's global financial crisis (GFC), to promote international cooperation. Together, the G20 accounts for around 85 per cent of world GDP-- a percentage that has grown in the past 20 years, more than 75 per cent of global trade, and around two-thirds of the population of the planet.
The emergence of the G20 as the primary forum of global economic cooperation is linked to the ongoing changes of the global order signalling the declining dominance of global economy and politics by the West as represented by the G7. In fact, recognising the emerging reality, the G7 finance ministers and central bank governors decided to create a more inclusive forum to address global economic issues, and the result is the G20 where membership includes both developed and developing countries.
The G20 membership is more representative of the current global balance of power than blocs of countries formed earlies like the G7. In fact, the establishment of the G20 recognised the considerable changes in the economic landscape over the previous decades.
The emergence of the G20 has also been seen as providing further evidence of increasingly multipolar global order and the West's attempt to incorporate selected developing countries, giving political considerations to ensure that they will follow the "rule-based world order" for global governance and a pathway to multilateralism. On the sideline of the Rio summit, German Chancellor Olaf Scholz noting the growing weight of major developing countries, said, "We are experiencing a major, major change in global structures".
An air of pessimism and disorganisation prevailed inside the G20 summit. The disorganisation was in full display when US president Joe Biden arrived late to join other leaders for the photo-shoot. The photo-shoot can be seen as metaphor for the difficulties in getting leaders to agree on issues ranging from climate change to wars in Ukraine and the Middle East.
The world's many geopolitical crises and Donald Trump's imminent return to the White House overshadowed the G20 Summit in Rio de Janeiro as concerns grow that his likely protectionist policies will undermine relations with allies including China.
This is the last G20 before Trump takes office. In view of Trump's threat to pull out of the Paris climate accords and the United Nations, it is very difficult to see how anything decided in Rio has much of a future.
European officials, fearing Trump's threat to reduce their own access to US markets, sought out talks with Chinese president Xi Jinping. British prime minister Keir Starmer pledged to be predictable and build a strong UK-China relationship. It was also widely reported that India's Hindu supremacist prime minister Narendra Modi hoped for close relations with Trump and he also met Italy's fascist prime minister Geogia Meloni and signed a joint statement with her.
As host of this year's G2 summit, Brazilian president Lula da Silva expanded the group's focus on extreme poverty and hunger with the backing from 80 countries. He said "Hunger and poverty are not the result of scarcity or natural phenomena ... they are the product of political decisions". In the final communique, the G20 leaders emphasised their commitment to eradicating poverty and hunger, calling for new funding pledges and for other countries not yet participating to join the global effort. But no concrete result in terms of funding to fight poverty and hunger appears to have resulted in the summit.
However, his call for 2 per cent wealth tax on the world's wealthiest in G20 countries was not received well by rich member countries. Advocates for the wealth tax estimate that the fund raised could be used to tackle growing global inequities and climate projects. It is estimated that the tax would affect some 3,000 people around the world including possibly some Bangladeshis as well. The proposed levy could raise up to US$250 billion annually. The call did not elicit much support from rich countries like the US and the UK.
The anti-corruption watchdog Transparency International criticised the G20 leaders for failing to address corruption and dirty money in the wealth tax proposal. Maira Martini, the Head of Policy and Advocacy of Transparency International said, "The G20 has the power to spearhead actions on illicit financial flows, anything less is lip-service to sustainable development".
The leaders of G20 members meet every year to discuss mainly economic and financial issues and coordinate policy on some other issues of mutual interest. But G20's apparent cohesion has significantly frayed in recent years. Tensions have also grown between high- and low-income countries with divergence in their opinions on issues such as climate change.
G20 played an important role in supporting globalisation, and efforts have been made to ensure that its benefits could be shared by all including the poorest developing countries. But its longstanding commitment to an international order based on WTO principles reducing tariffs and other trade barriers has in the recent past faced major challenges due to growing competition between major trading nations, in particular between the US and China.
Donald Trump imposed a suit of tariffs on China as well as several other G20 countries. His successor President Joe Biden kept those tariffs on China in place and further extended the economic warfare against it by imposing restrictions on technology transfers and imports. Now Trump's re-election has boosted uncertainty over the future of Washington's trade policy measures.
The world's largest 20 powers met in Rio at a time when these economies are also faced with mounting economic challenges. The IMF Blog (November 23) expressed the view that for most of G20 economies, growth is poised to weaken over the next five years and will remain well below what was typical in two decades before the pandemic. It further noted that sustainable growth is also imperilled by elevated public debt, and increased geoeconomic fragmentation and protectionism.
Leaders from G20 leading economies in Rio de Janeiro on Monday (November 18) issued a joint statement without totally endorsed by all countries. While the statement is generic to garner consensus, it did succeed in highlighting ongoing wars using more neutral tone to describe the conflicts in Ukraine, Gaza and Lebanon, calling for poverty reduction, cooperation on climate change, tax policy and changes of global governance. It is reported that German Chancellor Olaf Scholz regretted that more time could have been given for all members to consider the statement. More importantly, the conference host Brazilian President Lula da Silva cancelled the final press conference, a departure from the usual G20 practice, further indicating disarray surrounding the summit and lack of consensus on a few key issues. However, in view of a possibility of no declaration at all, the declaration can be considered a success for the conference host.