G20 in Rome. A Challenging Agenda

g20

IN Rome A challenging Agenda

by Stefano Riela

The G20 is a gathering of the leaders of 19 countries and one institution, the European Union (EU). This year it will take place in Rome on October 30th and 31st . It represents 80 per cent of the world economy, gathered together in the eternal city. States are part of international institutions that manage and coordinate policies, like the World Bank and the International Monetary Fund (IMF). These institutions have grown to encompass almost every country of the world. However, the major industrialised countries of the West found the need to meet in smaller and more homogenous “Groups”, hence, the “G”. It all started in the early 1970s when the Bretton Woods system of quasi-fixed exchange rates collapsed and the first oil crisis was about to begin. The US organised a group with Germany, France and the UK (G4) to share macroeconomic initiatives between its members. The (G4) later expanded with the entry of Japan (G5), Italy (G6) and Canada (G7). The EU has attended the G7 since the late seventies as a non-enumerated participant. The club opened its doors to Russia after the dissolution of the Soviet Union, and in 1998 the G8 was created. Russia, however, quit the G8 in 2017 following the annexation of Crimea. The G20 was created in 1999 after a series of financial crises: the Mexican peso crisis, the Asian and Russian crisis, and the collapse of Long-Term Capital Management. This unveiled the interconnection of capital markets and the need to involve other big economies along those of G7. Following the 2008 financial crisis, the G20 went beyond a gathering of finance ministers to involve heads of state and government. In 2008, the economic weight of G7 countries was 52 per cent of the world GDP, well below the 70 per cent of 1992 and, since then, the G7 has lost even more to reach 45 per cent in 2021. Meanwhile, the 12 countries that complement the G7 in the G20 – China, India, Korea, Russia, Australia, Brazil, Mexico, Indonesia, Saudi Arabia, Turkey, Argentina and South Africa have increased their overall weight from 12 per cent in 1992 to 33 per cent in 2021.

It is unknown whether the summit is to be held in person this year during Italy’s Presidency. Last year, during Saudi Arabia’s Presidency, it was held virtually. We do know that the Italian Presidency has announced its agenda: • Ensuring a swift international response to the pandemic – being able to provide equitable, worldwide access to diagnostics, therapeutics and vaccines – while building up resilience to future health-related shocks. • Promoting the creation of new jobs, social protection and food security; thus ensuring a rapid recovery while reducing inequalities by bridging the digital divide. • Confirming a firm commitment to protecting our climate and our common environment and promoting a more efficient use of renewable energies. This agenda looks quite ambitious, especially if we consider the increase in heterogeneity in G20 compared to G7. While the members of G7 are all democracies, within the G20 there are three authoritarian regimes (China, Russia and Saudi Arabia) and one hybrid regime (Turkey). Though we can predict it will be easy to find a broad consensus on the above-mentioned priorities (more vaccines, more jobs, more environmental protection), democratic countries cannot turn a blind eye to humanitarian issues or the infringement of civil liberties. This signals that liberal democracies will have a fight on their hands, and must leave no stone unturned to put an ‘End to History’ as imagined by Francis Fukuyama in his bestseller book The End of History and the Last Man (1992), published after the Cold War.

G20 2020, Al Khobar, Saudi Arabia