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Importance of G20 on global stage

Sep 10,2023 - Last updated at Sep 10,2023

The Group of Twenty, commonly known as the G20, was established in 1999 in response to the Asian financial crisis of 1997-1998. There was a need for a platform that could promote international economic cooperation and stability. Initially, the G20 served as a forum for finance ministers and central bank governors from major economies worldwide. The first meeting of the group was held in Berlin, Germany, in 1999. Since 2008, the group has evolved to include annual summits of world leaders and government officials, in addition to finance ministers and central bank governors, expanding its role and importance.

The primary goal of the G20 is to facilitate dialogue and cooperation among its member countries on a variety of economic and financial issues. Some of its key objectives include promoting economic stability through policy coordination to prevent and mitigate financial crises. This includes discussions on fiscal and monetary policies, financial regulation and exchange rate management. The group plays a crucial role in promoting open and fair trade practices. Member countries work together to address trade imbalances, reduce trade barriers, and ensure fair competition for businesses.

The significance of this group arises from the fact that its economies represent 85 per cent of global economic output and 75 per cent of global trade, with its member countries comprising two-thirds of the world's population. The group includes competitive nations like the United States, the European Union, Japan on one side and China and Russia on the other.

While primarily an economic forum, the G20 also holds political importance as discussions at its meetings often touch on geopolitics with economic ramifications. Furthermore, the annual summits provide leaders with a platform to address a range of global challenges, from climate change to international security.

The presence of countries like the United States, Japan, the European Union, Russia and China within the same international group should be seen as positive because it provides a platform for diplomatic discussions and conflict resolution through dialogue and cooperation, helping to prevent escalating tensions into costly large-scale conflicts.

Therefore, the importance of the G20 on the global stage cannot be ignored. By promoting cooperation among major economies, the group contributes to maintaining global economic stability and enhancing its resilience against financial crises. It aids in coordinating economic policies and regulatory standards, reducing protectionist risks and trade conflicts. The group also provides a platform for leaders to address pressing global challenges, including climate change, pandemic response like COVID-19, poverty alleviation, and shaping international economic and financial rules. For instance, during crises like the global economic downturn in 2008 or the COVID-19 pandemic, the G20 played a crucial role in coordinating responses and stabilising the global economy.

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