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During 18-19 November Brazil hosted the 2024 edition of the G-20 Summit, a Group formed in 1999 (in the context of the economic crises in Asia and Russia) by 19 countries and the European Union. African Union joined G-20 in 2023, while Spain has the status of permanent guest.
The 19 member countries of the G-20 are Argentina, Australia, Brazil, Canada, China, France, Germany, Great Britain, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Türkiye and the United States of America.
These economies contributed by 79.0% to the world GDP in 2023, up from 75.8% in 2008, as can be seen in the following chart. If we take into account the forecasts of the International Monetary Fund (IMF) of October 2024 (from the autumn edition of the World Macroeconomic Report), the share of the G-20 countries in the world economy will decrease marginally to 78.4% by the end of this decade (2029).
Figure 1. The weight of G-20 in the world GDP
Source: International Monetary Fund Database, 2024
The theme of the G-20 meeting in Rio de Janeiro in November this year was “Building a Just World and a Sustainable Planet“.
The Agenda of the G-20 Summit in 2024 included a number of very important topics in the world economy nowadays:
- social inclusion – combating hunger and poverty;
- sustainable development and the transition to the green economy;
- reform of the global economic governance institutions.
Additional taxation of billionaires, artificial intelligence, and conflicts in Ukraine and the Middle East were also topics discussed at the meeting in Brazil.
During the first session of the G-20 Summit the World Alliance against Hunger and Poverty was launched (at the proposal of Brazil), with 148 founding members: 82 countries, the European Union, the African Union, 24 international organizations, 9 international financial institutions and 31 non-government organizations.
In the speech delivered at the G-20 Summit, the President of Brazil drew attention to the fact that hunger and poverty are not the result of the lack of food, but of the political decisions, as in 2023 there were allocated worldwide USD 2.4 trillion for military spending.
Among the strategies proposed to lift the 733 million people (about 9% of the world population) out of poverty (especially children and women) there can be mentioned the direct transfers of financial resources (such as the Bolsa Familia program implemented in Brazil) and improving the access to micro – financing.
In the absence of accelerated measures to combat hunger and poverty, it is estimated that 582 million people will face hunger by 2030, a level similar to that of 2015.
The mission of this Alliance is to support and accelerate efforts to eradicate hunger and poverty and reduce inequalities, through political impetus at the highest level within the G-20 and the mobilization of domestic and international, public and private resources.
The principles of the Alliance are: free membership and voluntary participation; priority given to the needs of member countries; the emphasis on action; effective governance; promoting cooperation for development; flexibility.
The main objective of this alliance is to accelerate the efforts to combat poverty through financial transfers and social protection measures for 500 million people in low-income countries by 2030.
The Alliance also plans to implement programs to provide food for 150 million schoolchildren in the poorest countries. In this context, Indonesia has announced a major new program to provide food for 78 million school children by 2029.
Last but not least, socio-economic inclusion measures and programs are envisioned for approximately 300 million people.
Regarding sustainable development and the transition to a green economy, the G-20 leaders emphasized the importance of implementing urgent measures to counter climate change and to conserve biodiversity by reducing pollution.
In this context, the targets of the 2015 Paris Agreement were reconfirmed for the global average temperature (well below 2 degrees Celsius over to the pre-industrial levels).
At the same time, G-20 leaders emphasized the importance of increasing public and private resources to finance the transition to a green economy and they supported ambitious goals, including tripling renewable energy capacity and doubling the average annual rate of improvement in energy efficiency worldwide.
In addition, Brazil proposed the launch of a working group to mobilize financial resources worldwide to combat climate change. It should be emphasized that the countries of the European Union had the most important contribution to green financing in 2023 worldwide (approximately EUR 28.6 billion), according to data from the European Commission.
As regards the third priority theme, the G-20 leaders emphasized the importance of reforming the United Nations Security Council in order to increase the degree of representation for countries in Africa, Asia-Pacific, Latin America and the Caribbean.
Also, during the meeting in Rio de Janeiro, the importance of increasing the representativeness of emerging and developing countries within international financial institutions (the International Monetary Fund and the World Bank) and multilateral development banks was mentioned, in order to improve the efficiency, credibility, responsibility and legitimacy of their operations.
In this context, the G-20 leaders reiterated their support for the role of the IMF as an important institution for ensuring financial stability worldwide and expressed a positive view of the recent decisions of the international financial institution (including those regarding the reduction of fees and margins).
On the other hand, during the Rio Summit, the importance of realigning quotas was emphasized, in order to take into account recent developments in the world economy.
At the same time, the G-20 representatives demonstrated their commitment to addressing the challenges faced by low-income and highly indebted countries in an effective, comprehensive and systematic manner.
Last but not least, the G-20 leaders supported the reform of the World Trade Organization (WTO), 30 years after the establishment of this institution (the Marrakesh Agreement). This reform is intended to help reinvigorate international trade flows so that international trade once again becomes a powerful engine of growth and prosperity for all countries of the world.
Such reform is more important than ever in recent decades, given the unprecedented challenges facing international trade, including the geo-economic fragmentation (following the Ukraine conflict) and new industrial policies under implementation (with an emphasis on subsidies and trade restrictions, with over 4,000 such restrictions being introduced worldwide since the beginning of last year, according to IMF estimates).
In this context, international trade grew at a decelerating annual rate to 0.8% in 2023, according to IMF estimates, the weakest evolution since the pandemic year 2020. Also, the statistics recently published by the Department of Economic Policy Analysis in the Netherlands (CPB) show that the volume of international trade in goods rose at an average annual rate of only 1.5% during January-September 2024.
Regarding the additional taxation of billionaires, the G-20 leaders drew attention to improving the efficiency of taxation, by creating mechanisms to reduce tax evasion. A solution supported by the G-20 is represented by the implementation of progressive taxation systems for the reduction of inequalities, fiscal-budgetary consolidation, sustainability of public finances, financing of sustainable development objectives and the promotion of a strong and sustainable economic system that contributes to a balanced and socially inclusive growth.
As regards the artificial intelligence, the G-20 leaders support the implementation of the technological progress (including artificial intelligence), which generates productivity shocks and offers a range of opportunities for the workforce.
However, the Rio Summit emphasized the importance of implementing AI in a regulated manner, with a focus on ethics, transparency and accountability, to counter associated risks, including disinformation, privacy and security.
Disclaimer. The views and opinions expressed in this analysis are those of the author and do not necessarily reflect the official policy or position of MEPEI. Any content provided by our author is of his opinion and is not intended to malign any religion, ethnic group, club, organization, company, individual, or anyone or anything.
