G20
The G20: its role and legacy
The G20 was created in 1999 in response to the financial crises in the
late 1990s, the growing influence of emerging market economies on the
global economy, and their disproportionately modest participation in the
decision-making process. G20 Leaders met for the first time in 2008 in
Washington, D.C. And at that time the G20 was to play a pivotal role in
responding to the global economic and financial crisis. The main
objective of upgrading the level of consultations within the G20 was to
cope with then current and set a framework for preventing future
financial crises, while securing sustainabler and balanced global growth
and reforming the architecture of global governance.
Once it became a venue for the meetings of heads of states and
governments, the G20 has been considered a major mechanism for
international economic cooperation, regulating financial markets and
influencing global economic policy.
The G20's major achievements include strengthening the role of
emerging economies, such as BRICS, reforming international financial
institutions, improving discipline and tightening oversight over national
financial institutions and regulators, improving the quality of financial
regulations in economies whose regulatory problems led to the crisis,
and creating financial and organizational safety nets to prevent severe
economic slumps in the future.
Previous Leaders' Summits
Seventh G20 Leaders' Summit, June 18-19, 2012, Los Cabos,
Mexico
The Los Cabos Summit united Leaders in their resolve to promote
growth and jobs, in a challenging economic context: the global recovery
had continued to face a number of challenges, financial market tensions
were high, and external, fiscal and financial imbalances were still
prevalent. Leaders resolved to act together to strengthen recovery and
address financial market tensions, and to work collectively to strengthen
demand and restore confidence with a view to support growth and
foster financial stability in order to create high quality jobs and
opportunities for all G20 citizens. They agreed on a coordinated Los
Cabos Growth and Jobs Action Plan to achieve those goals, and
reaffirmed their commitment to strengthen the IMF's credit capabilities
with new resources up to US$456 billion.
Euro Area members of the G20 agreed to take all necessary policy
measures to safeguard the integrity and stability of the area, improve
the functioning of financial markets and break the feedback loop
between sovereigns and banks. Leaders looked forward to the Euro
Area working in partnership with the new Greek government to ensure
they remain on the path to reform and sustainability within the Euro
Area.
Leaders reaffirmed their commitment to implementing their structural
and regulatory reform agendas to enhance medium-term growth
prospects and build more resilient financial systems, as well as to
reducing imbalances by strengthening deficit countries' public finances
with sound and sustainable policies that take into account evolving
economic conditions and, in countries with large current account
surpluses, by strengthening domestic demand and moving toward
greater exchange rate flexibility.
They agreed that multilateralism is of even greater importance in the
current climate, and remained the best asset to resolve the global
economy's difficulties.
Finally, they committed to intensify their efforts to create a more
conducive environment for development, including supporting
infrastructure investment, in order to improve living conditions across
the globe and protect the most vulnerable. By stabilizing global markets
and promoting stronger growth, the G20 would generate significant
positive effects on development and poverty reduction across the globe.
Sixth G20 Leaders' Summit, November 3-4, 2011, Cannes, France
Given the weakening in the global recovery, Leaders agreed on an
Action plan for Growth and Jobs to address short term vulnerabilities
and strengthen medium-term foundations for growth. In order to
strengthen the social dimension of globalization, Leaders decided to set
up a G20 task force which would work as a priority on youth
employment, and encouraged the ILO to continue promoting ratification
and implementation of the eight core Conventions ensuring fundamental
principles and rights at work.
Leaders also made progress in reforming the international monetary
system to make it more representative, stable and resilient, agreeing on
actions and principles that would help reap the benefits from financial
integration and increase the resilience against volatile capital flows.
They welcomed the euro area's comprehensive plan and urged rapid
elaboration and implementation, including of country reforms. They
committed to ensure that the IMF continued to have resources to play
its systemic role to the benefit of its whole membership, and to
expeditiously implement in full the 2010 quota and governance reform
of the IMF.
Leaders agreed on comprehensive measures so that no financial firm
could be deemed "too big to fail" and to protect taxpayers from bearing
the costs of resolution. They also decided to develop the regulation and
oversight of shadow banking and agreed on principles to protect
financial services consumers. They agreed to reform the FSB to
improve its capacity to coordinate and monitor the G20's financial
regulation agenda.
Leaders endorsed the IOSCO recommendations to improve regulation
and supervision of commodity derivatives markets and decided to invest
in and support research and development of agriculture productivity.
They launched the "Agricultural Market Information System" (AMIS) to
reinforce transparency on agricultural products' markets. To improve
food security, they committed to develop appropriate risk-management
instruments and humanitarian emergency tolos, and decided that food
purchased for non-commercial humanitarian purposes by the World
Food Program would not be subject to export restrictions or
extraordinary taxes. They also welcomed the creation of a "Rapid
Response Forum", to improve the international community's capacity to
coordinate policies and develop common responses in time of market
crises.
Leaders reaffirmed their commitment to rationalize and phase-out over
the medium term inefficient fossil fuel subsidies that encourage wasteful
consumption, while providing targeted support for the poorest, and
called for the implementation of the Cancun agreements and further
progress in all areas of negotiation, including the operationalization of
the Green Climate Fund, as part of a balanced outcome in Durban.
Leaders reaffirmed their standstill commitments until the end of 2013,
as agreed in Toronto, committed to roll back any new protectionist
measures that may have risen, and agreed to pursue in 2012 fresh,
credible approaches to furthering the Doha negotiations. They also
supported a strengthening of the WTO, which should play a more active
role in improving transparency on trade relations and policies and
enhancing the functioning of the dispute settlement mechanism.
Recognizing that economic shocks affect disproportionately the most
vulnerable, Leaders commited to ensuring a more inclusive and resilient
growth, including measures to foster investments in agriculture and
mitigate the impact of price volatility, and improving infrastructure in
developing countries. Leaders also agreed that new sources of funding
needed to be found to address development needs and climate change.
Finally, Leaders welcomed the report of UK Prime Minister David
Cameron on global governance.
Fifth G20 Leaders' Summit, November 11-12, 2010, Seoul, Republic
of Korea
In the context of uneven growth and widening imbalances, Leaders
agreed to develop their common view to meet new challenges and
create a path to strong, sustainable and balanced growth beyond the
crisis.
Leaders agreed on the Seoul Action Plan, which included commitments
to
- Undertake macroeconomic policies, including fiscal consolidation
where necessary, to ensure ongoing recovery and sustainable growth
and enhance the stability of financial markets;
- Implement a range of
structural reforms that boost and sustain global demand, foster job
creation, and increase the potential for growth; and
- enhance the
Mutual Assessment Process (MAP) to promote external sustainability.
Leaders also agreed on:
- A modernized IMF that better reflected the changes in the world
economy through greater representation of dynamic emerging markets
and developing countries
- Instruments to strengthen global financial
safety nets
- Core elements of a new financial regulatory framework
The Seoul Development Consensus for Shared Growth that sets out the
G20 commitment to work in partnership with other developing
countries
- The Financial Inclusion Action Plan, the Global Partnership
for Financial Inclusion and a flexible SME Finance Framework, all of
which will significantly contribute to improving access to financial
services and expanding opportunities for poor households and small
and medium enterprises
- Their strong commitment to direct G20
negotiators to engage in across-the-board negotiations to promptly
bring the Doha Development Round to a successful, ambitious,
comprehensive, and balanced conclusion, and to resist all forms of
protectionist measures
Leaders also committed to continue the G20's work to prevent and
tackle corruption through the Anti-Corruption Action Plan; rationalize
and phase-out over the medium term inefficient fossil fuel subsidies;
mitigate excessive fossil fuel price volatility; safeguard the global marine
environment; and combat the challenges of global climate change.
Fourth G20 Leaders' Summit, June 26-27, 2010, Toronto, Canada
This was the first Summit of the G20 in its new capacity as the premier
forum for international economic cooperation.
Building on achievements in addressing the global economic crisis,
Leaders agreed on the next steps to take to ensure a full return to
growth with quality jobs, to reform and strengthen financial systems,
and to create strong, sustainable and balanced global growth.
However, Leaders also agreed that serious challenges remained. The
recovery was uneven and fragile, unemployment in many countries
remained at unacceptable levels, and the social impact of the crisis was
still widely felt.
Leaders therefore agreed:
- To follow through on delivering existing stimulus plans, while working
to create the conditions for robust private demand.
- To put in place
credible, properly phased and growth-friendly plans to deliver fiscal
sustainability, differentiated for and tailored to national
circumstances.
- To make further progress on financial repair and
reform to increase the transparency and strengthen the balance sheets
of our financial institutions, and support credit availability and rapid
growth, including in the real economy.
- To build a better regulated and
more resilient financial system that serves the needs of G20 citizens.
To complete the reforms of the international financial institutions.
- To
strengthen social safety nets, enhancing corporate governance reform,
financial market development, infrastructure spending, and greater
exchange rate flexibility in some emerging markets
- To renew for a
further three years, until the end of 2013, the commitment to refrain
from raising barriers or imposing new barriers to investment or trade in
goods and services, imposing new export restrictions or implementing
World Trade Organization (WTO)-inconsistent measures to stimulate
exports.
Third G20 Leaders' Summit, September 24-25, 2009, Pittsburgh,
USA
Leaders reviewed the progress made since the London Summit in April,
where national commitments to restore growth resulted in the largest
and most coordinated fiscal and monetary stimulus ever undertaken.
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:
- Launch a framework that sets out the policies and the way G20
countries act together to generate strong, sustainable and balanced
global growth
- Make sure our regulatory system for banks and other
financial firms reins in the excesses that led to the crisis. Where
reckless behavior and a lack of responsibility led to crisis, we will not
allow a return to banking as usual
- Reform the global architecture to
meet the needs of the 21st century
- Take new steps to increase
access to food, fuel and finance among the world's poorest while
clamping down on illicit outflows
- Phase out and rationalize over the
medium term inefficient fossil fuel subsidies while providing targeted
support for the poorest
- maintain our trade openness and move
toward greener, more sustainable growth
Second G20 Leaders' Summit, April 2, 2009, London, United
Kingdom
In the context of the greatest challenge to the world economy in modern
times, Leaders pledged to do whatever was necessary to:
- Restore confidence, growth, and jobs
- Repair the financial system to
restore lending
- Strengthen financial regulation to rebuild trust
- Fund
and reform international financial institutions to overcome the crisis and
prevent future ones
- Promote global trade and investment and reject
protectionism, to underpin prosperity
- Build an inclusive, green, and
sustainable recovery
Leaders therefore agreed to:
- Treble resources available to the IMF to $750 billion
- Support a new
SDR allocation of $250 billion
- Support at least $100 billion of
additional lending by the MDBs
- Ensure $250 billion of support for
trade finance
- Use the additional resources from agreed IMF gold
sales for concessional finance for the poorest countries
This constituted an additional $1.1 trillion programme of support to
restore credit, growth and jobs in the world economy.
First G20 Leaders' Summit: November 14-15, 2008, Washington
D.C., USA
Against a background of deteriorating economic conditions worldwide,
Leaders agreed that a broader policy response was needed, based on
closer macroeconomic cooperation, to restore growth, avoid negative
spillovers and support emerging market economies and developing
countries.
They therefore agreed to:
- Take whatever further actions were necessary to stabilize the financial
system
- Recognize the importance of monetary policy support, as
deemed appropriate to domestic conditions
- Use fiscal measures to
stimulate domestic demand to rapid effect, as appropriate, while
maintaining a policy framework conducive to fiscal sustainability
- Help
emerging and developing economies gain access to finance in current
difficult financial conditions, including through liquidity facilities and
program support
- Welcome the IMF's new short-term liquidity facility,
and urge the ongoing review of its instruments and facilities to ensure
flexibility
- Encourage the World Bank and other multilateral
development banks (MDBs) to use their full capacity in support of their
development agenda
- Ensure that the IMF, World Bank and other
MDBs have sufficient resources to continue playing their role in
overcoming the crisis.