Abstract
The book titled ‘Global Cooperation and G20: Role of Finance Track’, authored by Saon Ray, Samridhi Jain, Vasundhara Thakur and Smita Miglani (2023), offers an evolutionary account of the G20 agenda, processes and outcomes. Within the broader evolutionary scheme, this study provides an eloquent compendium of the ‘finance track’ as a vital G20 process with its genesis in the backdrop of the 2008 global economic meltdown. The book has seven chapters covering the introduction; organisation/structure of the G20 finance track; political economy and strategic positioning of states; evolution of agenda under the finance track; financial regulation; IFIs and international monetary system; Indian presidency and future of G20 agenda.
The introductory chapter delves into the background of the factors that lifted informal forums like G20 as a steering committee of global governance. The authors trace the origin of the ‘finance track’ in the pre-leader’s level G20 meetings held at finance ministers and central bank governors’ level in the backdrop of the 1997 Asian Financial Crisis. The study emphasises that the G7–G20 dynamics showcase the division of jurisdiction in which G7 held sway over politico-security matters while G20 primarily dealt with ‘global economic and financial agendas’. Nonetheless, the authors argue that agenda items discussed in G7 and G20 are not mutually exclusive but mirror a similarity quotient. Some common agenda items highlighted in the work include tax information system, balanced and sustainable growth, challenge of demographic change and so on. In the pre-2008 era, the study identifies the invention of the ‘Troika’ managerial system in 2002 comprising current, previous and upcoming chairs as key functional milestones in the G20-led global governance journey. Lastly, this chapter presents the structure of the book by introducing the rest of the chapters.
The second chapter, titled ‘Organization of the G20 Finance Track’, offers an account of the various financial track themes G20 has discussed over a period of time. To capture this phenomenon, the authors emphasise the share of financial regulation-related commitments out of the total commitments made by world leaders in all summits during 2008–2019. The study finds that financial regulation-related commitments were highest (62.1%) during the 2008 Washington Summit while those related to the reform of IFIs spiked (22.48%) at the 2009 London Summit. Provided that not all finance track issues drew attention at the head of government/state-level gathering, the scope of this chapter is reduced accordingly in sync with the leaders’ priorities. The study argues that these priorities have resonated in the summit declarations under diverse themes such as global growth, climate finance, macroeconomic policies, reform of IFIs, international taxation, fossil fuel subsidies, debt and so on.
The chapter further encapsulates the dynamic trajectory of G20 whose scope has widened with the incorporation of issues such as anti-money laundering, terror financing, compact with Africa and so on. The study finds that the top priority agenda of the emerging world include financial inclusion, global imbalances, infrastructure investment, exchange rates, and so on. Another key dimension touched upon by the authors is the organisational structure of G20 Summitry. The study recognises ‘Framework for Strong, Sustainable, Balanced Growth’ as the flagship working group of G20. Further, the chapter sheds light upon the role of Global Partnership for Financial Inclusion (GPFI) in unleashing the project of addressing inequalities in the availability of finance, especially for people in developing nations. The study evaluates that among the seven major commitments under GPFI, work is complete in three areas while ongoing in the other four. Finally, the chapter concludes by mentioning briefs on other notable working groups, namely, the International Financial Architecture Working Group, the Infrastructure and Investment Working Group and the Green Finance Study Group.
In the third chapter, titled ‘Political Economy Shapes Strategies of Countries’, the authors assess the causes behind the 2008 financial crisis and how it affected the agenda setting in G20. The study finds that the initial G20 agenda largely reflects what needs to be done to fix issues in the US economy. The authors argue that states like BRICS benefited through key decoupling steps they took prior to the onset of the crisis. The study then analyses each summit, between 2008 and 2019 from the prism of politics of agenda setting. The authors show that the agenda items discussed in each presidency have reflected not just the global concerns but also the specific priorities of the concerned presidency, that is, during the London Summit 2009, focus on jobs and growth symbolised the UK’s recession and unemployment.
Further, the study highlights major political fault lines of the era and how G20 sought to manage these contradictions by giving constructive direction to the course of global governance. In the evolutionary configuration, these hardships include—US–EU schism in the backdrop of the Eurozone crisis (2010 Toronto Summit); US–China impasse over valuation of yuan (2010 Seoul Summit); US–Russia disagreement over handling the situation in Syria especially after the chemical weapons attack (2013 St. Petersburg Summit); Australia’s obsession with economic recovery particularly through its mining sector met a fierce opposition from United States and EU who championed the cause of climate change (2014 Brisbane Summit); rising protectionism and populism in the United States challenging globalisation and climate change (2017 Hamburg Summit); controversy over Russian meddling in US elections; uncertainty over no-deal Brexit, Trump’s questioning of NAFTA (2018 Buenos Aires).
The study also points to major positive developments during 2008–2019. These include evolving consensus on a 5% shift of the IMF quota share in favour of the emerging world (2010 Seoul Summit); Mexico’s vigorous push for development agenda and financial inclusion (2012 Los Cabos Summit); fight against terrorism with a focus on asset free and curbing terror financing (2015 Antalya Summit); determination to defeat protectionism and challenges to globalisation; resolve to reinvigorate the fight against tax evasion; call to protect refugees (2016 Hangzhou Summit); compact with Africa (2017 Hamburg Summit); Trump–Xi temporary truce to halt the escalation of a trade war (2018 Buenos Aires Summit); UN Secretary-General urged world leaders to devise strategies to address negative pitfalls of artificial intelligence on global economy (2019 Osaka). At last, the chapter concludes with an annexure providing a snapshot of the G20 summit agenda over a decade.
Chapter 4, titled ‘Evolution of the Finance Tracks Agendas’, examines the process of agenda setting in G20 with a specific focus on finance-related matters. The authors stress the role of each presidency in preparatory meetings structured within the troika system. The authors duly emphasise the role of Sherpas, finance ministers, central bank governors, engagement groups like academicians, civil society, business leaders, and so on, in the agenda setting. The study finds that at times, the agenda is strongly influenced by the domestic situation of a member nation, i.e., Japan’s insistence on disaster resilience in the wake of earthquakes it is prone to.
The study stresses the unprecedented role played by ‘multilateral engagement’ in transmuting issues into commitments. The chapter offers an analytical account of various summits and finds that significant advancement is witnessed in the sphere of financial regulation to solve and prevent present and future crises like the 2008 crisis and 2010 Eurozone crisis. The chapter examines each summit from the following parameters: context of the summit, major challenges facing the world economy, key steps in the form of commitments and institutional mechanisms. The chapter is complemented by an analysis of the scope of the G20 presidency from the lens of agenda setting tabulated in the form of three annexures. The three annexures examine agenda setting through three parameters, namely, across the summits, across the agenda and global and political economy issues across the presidency.
Chapter 5, titled ‘Financial Regulation and G20’, explores the evolution of the financial regulation agenda in G20. It accentuates common threads among the presidencies of emerging economies. The study finds the following items to be top concerns of emerging economies: global imbalances, reform of IFIs, exchange rate, infrastructure investment, financial inclusion, and so on. The study asserts that since weak financial regulation was found as the root cause of the global financial crisis, the crux of post-crisis response included focus on four key areas—curbing too big to fail, making the derivatives market safer, increasing resilience of IFIs and strengthening resilience of non-bank financial intermediation. The study critically appraises the progress made in each of these four areas.
Chapter 6, titled ‘International Financial Institutions and International Monetary System Reform’, investigates the endeavour undertaken by G20 in reforming the IFIs, particularly the IMF. The study finds that the IMF was identified by the G20 as the frontline body in managing complexities of global economic governance in helping prevent crises as well as accelerating economic growth. However, it was agreed that the IMF itself needs reforms in multiple areas— surveillance, quota and governance reforms, lending capacity and resource adequacy—before it implements the arduous mandate. The authors underscore the fluctuating nature of IMF reform commitments since 2008. The study finds that the IMF reform had a crucial place in the Washington Action Plan released at the 2008 Washington Summit. The authors note that the highest number of ‘IFIs reform related commitments’ were found during the 2009 London Summit. The authors attribute such prioritisation to the overwhelming shadow of the global financial crisis. After a brief interval, the fervour towards IMF quota and its executive board restructuring was felt during the 2010 Seoul Summit. The study highlights that the 2011 Cannes Summit played a key role in enhancing the role of the FSB and IMF by expanding resources and pushing rigorous surveillance. Similarly, the 2017 Hamburg Summit brought 14 commitments on IMF reforms along with the commitment to conclude the 15th General Quota Review by 2019. The chapter concludes with a figure reflecting IFI reform commitments from 2008–2016.
Chapter 7, titled ‘The Indian Presidency and G20’s Future Agenda’, emphasises the impact of COVID-19 and the Ukraine crisis on the global economy. The authors characterise G20 as a crisis-driven body that facilitates global cooperation at crucial junctures. In a critical tone, the authors argue that the world leaders’ response to the magnitude of these crises (COVID-19 and Ukraine) is weaker than what is required. In the context of COVID-19, the authors list the number of steps undertaken by the G20 to alleviate the global economy. From the futuristic perspective, the study offers a roadmap for furthering finance track work. To maintain continuity in the agenda, this roadmap is grounded on the priorities identified in (2021) Italian and (2022) Indonesian presidencies.
The book elegantly sketches out the structure of G20 and extensively elaborates upon the vital processes that keep the architecture of global governance in motion. Relying upon evolutionary methodology, most chapters aim to comprehend the dynamics behind the agenda setting. However, slight repetitiveness is glaringly noticeable across various chapters, especially the third and fourth. Likewise, the nuances in the third chapter could have been significantly enhanced by digging at the root cause of the political schisms affecting the dynamics of agenda setting. Nonetheless, the book is a remarkable blend of descriptive and explanatory pitch with eloquent incorporation of informative annexures that offers a comprehensive record of G20’s functioning since 2008.