South Africa took over the presidency of the G20 at the end of 2024. Since then the world has become a more complex, unpredictable and dangerous place. The most powerful state in the world, the US, seems intent on undermining the existing order that it created and on demonstrating its power over weaker nations. Other influential countries are turning inward.
These developments raise concerns about how well mechanisms for global cooperation, such as the G20, can continue to operate, particularly those that work on the basis of consensual decision making. Danny Bradlow sets out how the G20 works, and what’s at stake.
What’s the G20’s purpose?
The G20 is a forum in which the largest economies in the world meet regularly to discuss, and attempt to address, the most urgent international economic and political challenges. The group, which includes both rich and developing countries, accounts for about 67% of the world’s population, 85% of global GDP, and 75% of global trade.
The G20, in fact, is a misnomer. The actual number of G20 participants in any given year far exceeds the 19 states and 2 international entities (the European Union and the African Union) that are its permanent members. Each year they are joined by a number of invited “guests”. While there are some countries, for example Spain and the Netherlands, that are considered “permanent” G20 guests, the full list of guests is determined by the chair of the G20 for that year. This year, South Africa has invited 13 countries, including Denmark, Egypt, Finland, Singapore and the United Arab Emirates. They are joined by 24 invited international organisations such as the International Monetary Fund, the World Bank and the United Nations and eight African regional organisations, among others.
The G20 should be understood as a process rather than a set of discrete events. Its apex is the annual leaders’ summit at which the participating heads of state and government seek to agree on a communiqué setting out their agreements on key issues. These agreements are non-binding and each of the participating states usually will implement most but not all the agreed points.
The communiqué is the outcome of a two track process: a finance track, consisting of representatives of the finance ministries and central banks in the participating counties, and a “sherpa” track that deals with more political issues. In total these two tracks will involve over 100 meetings of technical level officials and policymakers.
Most of the work in each track is done by working groups. The finance track has seven working groups dealing with issues ranging from the global economy and international financial governance to financial inclusion and the financing of infrastructure. The sherpa track has 15 working groups dealing with issues ranging from development and agriculture to health, the digital economy, and education.
The agenda for the working group meetings is based on issues notes prepared by the G20 presidency. The issues notes will discuss both unfinished business from prior years and any new issues that the president adds to the G20 agenda.
The working group chairs report on the outcomes of these meetings to the ministerial meetings in their track. These reports will first be discussed in meetings of the deputies to the ministers. The deputies will seek to narrow areas of disagreement and sharpen the issues for discussion so that when they are presented at the ministerial meeting the chances of reaching agreement are maximised.
The agreements reached at each of these ministerial meetings, assuming all participants agree, will be expressed in a carefully negotiated and drafted communiqué. If the participants cannot agree, the minister chairing the meeting will provide a chair’s summary of the meeting. These documents will then inform the communiqué that will be released at the end of the G20 summit. This final communiqué represents the formal joint decision of the participating heads of state and government.
The G20 process is supplemented by the work of 13 engagement groups representing, for example, business, labour, youth, think tanks, women and civil society in the G20 countries. These groups look for ways to influence the outcomes of the G20 process.
What is the G20 troika and how does it operate?
The G20 does not have a permanent secretariat. Instead, the G20 president is responsible for organising and chairing the more than 100 meetings that take place during the year. The G20 has decided that this burden should be supported by a “troika”, consisting of the past, present and future presidents of the G20. This year the troika consists of Brazil, the past chair; South Africa, the current chair; and the US, the future chair.
The role of the troika varies depending on the identity of the current chair and how assertive it wishes to be in driving the G20 process. It will also be influenced by how active the other two members of the troika wish to be.
The troika helps ensure some continuity from one G20 year to another. This is important because there is a significant carryover of issues on the G20 agenda from one year to the next. The troika therefore creates the potential for the G20 president to focus on the issues of most interest to it over a three year period rather than just for one year.
How successful has the G20 process been?
The G20 is essentially a self-appointed group which has designated itself as the “premier forum for international economic cooperation”.
The G20 was first brought together during the Asian financial crisis in the 1990s. At that time, it was limited to a forum in which ministers of finance and central bank governors could meet to discuss the most important international economic and financial issues, such as the Asian financial crisis.
The G20 was elevated to the level of heads of state and government at the time of the 2008 global financial crisis.
The G20 tends to work well as a cooperative forum when the world is confronting an economic crisis. Thus, the G20 was a critical forum in which countries could discuss and agree on coordinating actions to deal with the global financial crisis in 2008-9.
It has performed less well when confronted with other types of crises. For example, it was found wanting in dealing with the COVID pandemic.
It has also proven to be less effective, although not necessarily totally ineffective, when there is no crisis. So, for example, the G20 has been useful in helping address relatively technical issues such as developing international standards on particular financial regulatory issues or improving the functioning of multilateral development banks. On other more political issues, for example climate, food security, and funding the UN’s sustainable development goals, it has been less effective.
There’s one less obvious, but nevertheless important, benefit. The G20 offers officials from participating countries the chance to interact with their counterparts from other G20 countries. As a result, they come to know and understand each other better, which helps foster cooperation between states on issues of common interest. It also ensures that when appropriate, these officials know whom to contact in other countries and this may help mitigate the risk of misunderstanding and conflict.
These crisis management and other benefits would be lost if the G20 were to stop functioning. And there is currently no alternative to the G20 in the sense of a forum where the leading states in the world, which may differ on many important issues, can meet on a relatively informal basis to discuss issues of mutual interest. Importantly, the withdrawal of one G20 state, even the most powerful, should not prevent the remaining participants from using the G20 to promote international cooperation on key global challenges.
In this way it can help manage the risk of conflict in a complex global environment.
