History and Past Presidencies
The current G20 has grown in stature from the original G20 that was established in September 1999 as a forum of the Finance Ministers and the Central Bank Governors of the 19 major Economies and the EU in the aftermath of East Asian Crisis of 1997. The forum was created at the initiative of the seven major industrial countries (Canada, France, Germany, Italy, Japan, U.K. and USA) to promote consultations and coordination with the emerging and developing economies in view of the realisation that some of these key countries are not sufficiently involved in the discussions and decisions concerning global economic issues though their influences were growing in the International financial system.
Since establishment, the Finance Ministers and the Central Bank Governors of this group met annually starting on December 15-16, 1999 in Berlin. The subsequent meetings were held in Canada in 2000 and 2001, in India in 2002, in Mexico in 2003, in Germany in 2004, in China in 2005, in Australia in 2006, in South Africa in 2007, and in Brazil in 2008.
The G20 Finance Ministers and the Central Bank Governors continue to meet twice a year usually in the sidelines of the IMF-World Bank annual/spring meetings and prior to the G20 Leaders’ Summit. In fact, the G20 Finance Ministers statement constitutes the inputs for Leaders’ Declaration and Communique.
The Finance Ministers and the Central Bank Governor’s Forum was elevated to Head of State’s forum in the wake of the global financial crisis in 2008.
The First G20 Leaders’ Summit was held in Washington D.C. on November 14-15, 2008 at the initiative taken by the US President in the wake of Financial Crisis of 2008. The Leaders recognised that during the pre-crisis strong global growth and capital flows, (a) Some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions; and (b) Inconsistent and insufficiently coordinated macroeconomic policies, inadequate structural reforms, led to unsustainable global macroeconomic outcomes that resulted in severe market disruption. In this backdrop, the Leaders’ agreed to bring about a broader policy response based on closer macroeconomic cooperation, to restore growth, avoid negative spillovers and support emerging market economies and developing countries through actions to stabilise financial system, use fiscal measures to stimulate domestic demand, help emerging and developing economies gain access to finance through liquidity facilities and program support. The Leaders stressed the International Monetary Fund’s (IMF) and the World Bank to play their role in crisis response by using their instruments and capacity. The Leaders also ensured that the IMF, World Bank and other MDBs have sufficient resources to continue playing their role in overcoming the crisis.
In addition to these, the Leaders agreed to implement reforms to strengthen financial markets and regulatory regimes to avoid future crises. These reforms include (i) Strengthening Transparency and Accountability, (ii) Enhancing Sound Regulation, (iii) Promoting Integrity in Financial Markets, (iv) Reinforcing International Cooperation, and (v) Reforming International Financial Institutions; The Leaders announced immediate action plans and medium-term action plans in each of these areas.
The First G20 Leaders summit was successful in reaching a common understanding of the root causes of the global crisis, in reviewing actions countries had taken and would take to address the immediate crisis, in agreeing on common principles for reforming the financial markets, and in launching an action plan to implement those principles. The leaders reaffirmed their commitment to free market principles. The leaders also agreed to reject protectionism and agreed to refrain from imposing any new trade or investment barriers for the next 12 months. The Leaders asked their finance ministers to develop further specific recommendations that would be reviewed in their next summit in 2009.
The Progress Report on the immediate action plans were prepared by the UK Chair in 2009. The report was presented to the G20 Finance Ministers and the Central Bank Governors in their meeting on March 14, 2009 to prepare for the London Leaders’ Summit. In their communique, the FMs and CBGs agreed further action to restore global growth and support lending, and reforms to strengthen the global financial system and adopted a framework for financial repair and recovery.
In the Second G20 Leaders' Summit held in London on April 2, 2009, the Leaders recognized that the crisis deepened further since they last met in November 2008 and called for global solution to a global crisis. They pledged to act together to bring the world economy out of recession and prevent recurrence of a similar crisis in the future by (a) Restoring confidence, growth, and jobs; (b) Repairing the financial system to restore lending; (c) Strengthening financial regulation to rebuild trust; (d) Funding and reforming international financial institutions to overcome this crisis and prevent future ones; (e) Promoting global trade and investment and reject protectionism, to underpin prosperity; and (f) Building an inclusive, green, and sustainable recovery.
The Leaders agreed to treble resources available to the IMF to $750 billion, to support a new SDR allocation of $250 billion, to support at least $100 billion of additional lending by the MDBs, to ensure $250 billion of support for trade finance, and to use the additional resources from agreed IMF gold sales for concessional finance for the poorest countries. These constituted an additional $1.1 trillion programme of support to restore credit, growth and jobs in the world economy.
To strengthen financial supervision and regulation, the Leaders established a new Financial Stability Board (FSB), as a successor to the Financial Stability Forum (FSF) and also declared that the era of banking secrecy is over. The new FSB include all G20 countries, FSF members, Spain, and the European Commission. Major mandates of the FSB were set to collaborate with the IMF to provide early warning of macroeconomic and financial risks and the actions needed to address them; to take action against non-cooperative jurisdictions, including tax havens, to set a high-quality global accounting standards; and to extend regulatory oversight and registration to Credit Rating Agencies to ensure they meet the international code of good practice.
The next G20 Finance Ministers and Central Bank Governors meeting was held in London on 4-5 September, 2009 to assess progress. They noted that the unprecedented, decisive and concerted policy action have helped to arrest further decline in the financial stability and boosted global demand. They called for the need to remain cautious about the outlook for growth and jobs and for continuation of the necessary support measures and monetary and fiscal policies until recovery is secured.
The FSB decided to conduct a peer review of implementation of the Financial Stability Forum’s (FSF) Principles for Sound Compensation Practices and their Implementation Standards.
In the Third G20 Leaders' Summit held in Pittsburgh on September 24-25, 2009, the Leaders noted that the forceful responses of the G20, to do everything necessary to ensure recovery, had worked to stop the dangerous, sharp decline in global activity and stabilize financial markets. Industrial output started rising, international trade was starting to recover, the financial institutions were able to raise needed capital, financial markets were showing a willingness to invest and lend, and overall confidence improved. They noted that theprocess of recovery and repair still remained incomplete and pledged to adopt the policies needed to lay the foundation for strong, sustained and balanced growth in the 21st century. For this they agreed to launch a framework laying out the policies to act together to generate strong, sustainable and balanced growth.
However, the process of recovery and repair remained incomplete. In many countries, unemployment remained unacceptably high, and the conditions for a recovery of private demand were not yet fully in place. Leaders therefore agreed to (i) Launch a framework that sets out the policies and the way G20 countries act together to generate strong, sustainable and balanced global growth, (ii) Make sure that the regulatory system for banks and other financial firms reins in the excesses that led to the crisis, (iii) Reform the global architecture to meet the needs of the 21st century, (iv) Take new steps to increase access to food, fuel and finance among the world's poorest while clamping down on illicit outflows, (v) Phase out and rationalize over the medium term inefficient fossil fuel subsidies while providing targeted support for the poorest, (vi) maintain trade openness, and (vii) move toward greener, more sustainable growth.
Leaders also called on their FMs and CBGs to launch the new Framework by November by initiating a cooperative process of mutual assessment of the policy frameworks and the implications of those frameworks for the pattern and sustainability of global growth.
Further, the Leaders tasked the FSB “to monitor the implementation of FSB standards and propose additional measures as required by March 2010.”
Leaders also asked OECD, WTO and UNCTAD to prepare a joint report on G20 Trade and Investment Measures.
The major outcome of the Pittsburgh Summit has been the Leaders’ pledge to foster a “Framework for Strong, Sustainable and Balanced Growth” in the 21st century through sound macroeconomic policies that prevent cycles of boom and bust, adopting the mutual assessment process and peer review; and a decision to reform the IFIs by shifting IMF’s quota share to dynamic emerging markets and developing economies of at least 5% from over-represented countries to under-represented countries, adoption of a dynamic formula for the World Bank to generate an increase of at least 3% voting power for developing and transition countries that are under-represented; and ensuring that the World Bank and the Regional Development Banks have sufficient resources to address global challenges.
In their meeting held on November 7, 2009 the G20 Finance Ministers and Central Bank Governors noted that the economic and financial conditions have improved following the coordinated response of G20 to the crisis. However, the recovery remained uneven and dependent on policy support. High unemployment remained a major concern. They noted that the G20 Framework for Strong, Sustainable and Balanced Growth has been launched. A detailed timetable has been adopted and a new consultative mutual assessment process to evaluate whether policies will collectively deliver agreed objectives has been initiated and that the assessment would be assisted by IMF and World Bank analyses and the input of other international organisations as appropriate.
On March 10, 2010, the Financial Stability Board (FSB) submitted a Peer Review Report providing the findings and conclusions of the peer review. It was prepared by a Team comprising members from Australia, Canada, the Netherlands, Singapore, South Africa, Switzerland, the Basel Committee on Banking Supervision and the OECD, supported by the FSB Secretariat. This Report provided the first such review under the new FSB Framework for Strengthening Adherence to International Standards.
On April 23, 2010, the G20 FMs and CBGs met in the sidelines of IMF-WB Spring meetings in Washington D.C. and discussed the progress in the global economic recovery, the transition to a strong, sustainable and balanced growth, and the agendas for the financial regulatory reform and international financial institutions.
On May 19-20, 2010, an International Conference on “Effective Financial Market Regulation after Pittsburgh - Achievements and Challenges” was hosted by the Federal Ministry of Finance, Germany in Berlin.
On June 5, 2010, in the FMs and CBGs meeting in Busan, Korea, it was noted that the global economy continued to recover faster than anticipated, although at an uneven pace across countries and regions. The G20’s strong policy response to the crisis played a pivotal role in restoring growth. However, the volatility in financial markets indicated that significant challenges remained. They decided to pursue well coordinated economic policies. The Framework for Strong, Sustainable and Balanced Growth was recognised as a key mechanism by which they decided to work together to meet the immediate challenges of supporting the global recovery and achieving medium-term shared Framework objectives. Building on progress to date, they affirmed commitments to intensify efforts and to accelerate financial repair and reform.
On June 14, 2010, OECD, WTO and UNCTAD submitted a joint report on G20 Trade and Investment Measures covering a period of November 2009 to Mid May 2010 OECD and UNCTAD also submitted a public reports on the commitment to forego protectionism.
On June 16, 2010, IEA, OPEC, OECD, and World Bank prepared a joint report on “Analaysis of the Scope of Energy Subsidies and Suggestions for the G20 Initiatives” for submission to the G20- Summit Meeting in Toronto on June 26-27, 2010.
On June 18, 2010,Financial Stability Board submitted a Report on “Overview of Progress in the Implementation of the G20 Recommendations for Strengthening Financial Stability” to the G20 Leaders.FSB also submitted an Interim Report on “Reducing the moral hazard posed by systemically important financial institutions” to the G20 Leaders.
On June 26, 2010,in the Toronto Summit, the following Reports were submitted to the Leaders:
- IMF report on “Fair and Substantial Contribution by the Financial Sector”.
- The IOSCO Technical Committee created a Task Force on Commodity Futures Markets in September 2008 as a response to global concerns concerning price increases and volatility in oil and food products. A Report of this Task Force was presented by IOSCO to the G20 Leaders.
- “Report on G20 Initiative on Rationalizing and Phasing Out Inefficient Fossil Fuel subsidies”
- IMF Report on “G20 Mutual Assessment Process - Alternative Policy Scenarios”
- World Bank Report on “G20 and Global Development” for G20 Growth Framework and Mutual Assessment Process.
On June 27, 2010,in the Fourth G20 Summit, Leaders declared that this was their first summit of the G20 in its new capacity as the premier forum for international economic cooperation. The theme of the Toronto Summit was stated as “Recovery and New Beginnings”. It was focused on Strong, Sustainable and Balanced Growth and on completion of the Mutual Assessment Process through Peer Review by grouping of countries. Advanced economies committed to the fiscal consolidation conditions of halving their fiscal deficit by 2013 and stabilizing debt by 2016 as part of re-balancing commitments. An agreement was also reached on differentiated approach to consolidating growth and recovery versus exit strategies and fiscal consolidation. “Development” was introduced for the first time on the G20 agenda and a high Level Development Working Group was created.
The Fifth G20 Summit was held in Seoul, South Korea on November 11-12, 2010. The Leaders pledged to continue their coordinated efforts and act together to generate strong, sustainable and balanced growth. It was determined to put jobs at the heart of the recovery, to provide social protection, decent work and also to ensure accelerated growth in low income countries (LICs). The highlight of the Seoul Summit under the theme” Shared Growth Beyond Crisis” was the launching of the G20 Development Agenda embodied in the Multi-Year Action Plans for the nine development pillars: (i) Infrastructure; (ii) Human resource development; (iii) Trade; (iv) Private investment and job creation; (v) Food Security; (vi) Growth with resilience; (vii) Domestic resource mobilization; (viii) Knowledge sharing; and (ix) Financial inclusion. MDBs were asked to pursue actions in specific areas and a High Level Panel was created to review MDB Action Plan and to identify ways to scale up financing for investments in infrastructure.
The Sixth G20 Summit was held under the French Presidency in Cannes, France on November 3-4, 2011. The French Priorities for the G20 Summit 2011 were (a) Reforming the International Monetary System; (b) Strengthening Financial regulation (c) Combating commodity price volatility (d) Strengthening jobs and the social dimension of globalization (e) Fighting corruption and (f) Focusing on the two pillars of infrastructure and food security under the Development agenda. The Summit reviewed the global economic situation in the backdrop of Eurozone crisis. Major outcomes of the Cannes summit were regulation of commodity derivative markets, action plan on commodity price volatility and agriculture, increasing transparency of energy markets, and supporting the recommendations of the High Level Panel on infrastructure. The Cannes summit final Declaration was titled “Building our Common Future: Renewed Collective Action for the Benefit of All” and was accompanied by “Cannes Action Plan for Growth and Jobs”.
The Seventh G20 Summit was held under Mexican Presidency in Los Cabos, Mexico on 18-19 June 2012. The central focus of discussions was the current state of the global economy. One of the summit’s main outcomes was the adoption of the Los Cabos Growth and Jobs Action Plan wherein individual countries that make up the G20 committed themselves to take up measures that will contribute to strong, sustainable and balanced growth. The Action Plan was developed by the Framework Working Group co-chaired by India and Canada. In addition, progress was reported in the area of financial regulation and further pledges to boost the financial resources of the International Monetary Fund (IMF) including India’s pledge of $10 Billion. Other key issues addressed at the summit included development policy, green growth, and trade and employment.
The Mexican Presidency’s five priorities were:
- To promote economic stabilization and structural reforms as foundations for growth and employment anchored in the Framework and Global Economy discussions;
- Strengthening the financial system and fostering financial inclusion to promote economic growth;
- Improving the international financial architecture in an interconnected world;
- Enhancing food security and addressing commodity price volatility; and
- To promote sustainable development, green growth and the fight against climate change. Mexico later promoted ‘green growth’ as the cross cutting agenda for the Summit.
The Eighth G20 Summit was held under Russian Presidency from 5-6 September 2013 in St Petersburg, Russia.
Key outcomes of the summit included:
- the St Petersburg Action Plan, which sets out reforms for achieving strong, sustainable and balanced growth, coupled with an Accountability Assessment describing progress made on past commitments
- extending the G20’s commitment not to introduce new trade or investment protectionist measures until the end of 2016
- full endorsement of the OECD-created Action Plan aimed at addressing tax base erosion and profit shifting
- the St Petersburg Accountability Report on G20 Development Commitments, which sets out the progress achieved since the G20 adopted the 2010 Seoul Multi-Year Action Plan on Development
- endorsement of the St Petersburg Development Outlook, which states the core priorities, new initiatives and ongoing commitments for the G20’s development work
- extending the mandate for the Task Force on Employment by another year
- commitment to identify and start to implement by the Brisbane Summit a set of collective and country-specific actions that tangibly improve domestic investment environments
- a reaffirmed commitment to implementation of agreed financial regulatory reforms and International Monetary Fund reform.
Given circumstances in Syria, leaders took the opportunity to discuss this major security issue.
G20 Leaders also marked the 5th Anniversary of the G20, reaffirming their conviction that the foundation for sustainable growth and rising prosperity for all is an open world economy based on market principles, effective regulation, inclusiveness and strong global institutions, underpinned by the closer partnership and collective action and shared responsibility of the G20, based on effective policy coordination.
The Ninth G20 Summit was held under Australian Presidency on November 15-16, 2014 in Brisbane, Australia. Leaders expressed their commitment to work in partnership to lift growth, boost economic resilience and strengthen global institutions. To these ends, they set out Brisbane Action Plan and comprehensive growth strategies. A target has been set to lift the G20’s GDP by at least an additional 2 percent by 2018. It has been agreed to establish a Global Infrastructure Hub with a four-year mandate to develop a knowledge-sharing platform and network between government, private sector, development banks and other international organizations to collaborate and improve functioning and financing of infrastructure markets. While expressing their commitment to strengthen global institutions, G20 Leaders have expressed their disappointment with the continued delay in progressing the IMF quota and governance reforms agreed in 2010 and the 15th General Review of Quotas, including a new quota formula and urged the United States to ratify them. If this does not happen, they asked the IMF to stand ready with options for next steps. Leaders have also committed to reduce unemployment, particularly youth unemployment and the employment gap between men and women and to take measures to reduce cost of transferring remittances to enhance financial inclusion as a priority. They have further committed to fully implement agreed financial regulatory reforms while remaining alert to new risks. To ensure that profits could be taxed where economic activities deriving the profits are performed and where value is created, it has been proposed to finalise in 2015 the G20/OECD Base Erosion and Profit Shifting (BEPS) Action Plan to modernise international tax rules. As a part of their Anti-Corruption action, G20 Leaders have committed to improve the transparency of the public and private sectors. On Trade, G20 Leaders expressed commitment to implement all elements of the Bali package and to swiftly define a WTO work programme on the remaining issues of the Doha Development Agenda to get negotiations back on track. Leaders also called for increased collaboration on energy and improving energy efficiency and for effective action to address climate change and mobilising finance for adaptation and mitigation, such as the Green Climate Fund. Given the seriousness and economic impact of Ebola outbreak in Guinea, Liberia and Sierra Leone, G20 Leaders expressed their concerns in a full statement and called for coordinated international response to the crisis.