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Hu Yuwei: A critical year for G20`s future

2016-06-12

By Hu Yuwei    Source: China.org.cn    Published: 2016-6-9

 

After it was established in 1999, the G20 functioned under the radar for eight years until 2008, when the outburst of the international financial crisis upgraded the mechanism, which only featured routine meetings for financial ministers and central bank governors, to summit meetings, remarkably raising G20`s international influence. The upgraded G20 indeed played a significant role between 2008 and 2009 amid the raging financial crisis, preventing the world economy from sliding into deeper chaos.


Once the financial crisis ebbed, the economies of developed countries and those of the emerging economies gradually polarized, discussions about the G20`s legitimacy started to emerge, and the G20 now conflicts with other international governance mechanism such as the G7.


Therefore, for the G20, the first priority is to remove people`s doubts about it, and to guard its position as a "major forum for international economic cooperation." To realize this objective, this year is rather critical in determining the future of the G20.


How to redefine and subsequently transform the G20 is a strategic challenge for its member states. Under the circumstances, establishing a long-term governance mechanism is inevitable, and to reach this purpose, development issues could play a key role.


As is known to all, the mechanism for financial crisis response is temporary whereas development issues are long-term and universal. No country, regardless if it is developed or developing, cannot bypass development, so development issues amount to a kind of common ground for G20 member states to lubricate relations and strengthen connections, which in turn, helps consolidate the unity within G20.


This year is the first year for the implementation of the United Nation`s 2030 Sustainable Development Goals (SDGs), which were adopted last year. Although the agenda was unanimously approved by world leaders, it is still more of a guideline mainly for the U.N. itself, needing to be internalized by each member state.


Therefore, a first priority for the international community this year is to urge each government to finalize their own action plans, while relying on mature international mechanisms to help developing countries achieve the SDGs. For this purpose, the G20, known as "major forum for international economic cooperation," should naturally play an important role.


The G20 represents 85 percent of the world`s GDP, 80 percent of its trade volume, two thirds of its population and 60 percent of the earth`s surface; it has a duty-bound obligation to promote global development issues. In practice, the G20 could function on two levels.


First, since the G20 represents the majority of the global economy and population, success in achieving the SDGs heavily relies on the development of the G20 countries` own development. In other words, G20 member states` own development would be part of the achievement for SDGs. Second, given G20 countries` experience in development and their strengths in capital and technology, they should take unified action to help non-G20 countries, especially those struggling to develop.


This year`s G20 summit will be held in Hangzhou, China on Sept. 4-5. Among the many expectations, how to bridge the SDGs and G20`s own development issues have received the most attention. Chinese Foreign Minister Wang Yi said on May 26 at a briefing for the G20 summit that "placing development issue as high-priority at the G20 summit is a shared expectation of developing countries as well as a commitment that China should make." He said that this year`s summit would "be dedicated to ensuring that the G20 will design and implement their action plans for the SDGs."


China is also willing to share its own experiences in the decades of development, which might serve as a reference for other developing countries during their process to achieve sustainable development.


To sum up, the G20, which is part of the global governance, is at a critical crossroads. On one hand, the international community still has high expectations of it, hoping that G20 countries can once again pick up the spirit of cooperation during the financial crisis to keep the global economy from retreating further. On the other hand, the discord within the G20 and the absence of a core unity raise doubts over the G20`e legitimacy. At the same time, how the G20 will help achieve the U.N. SDGs remains to be seen.


The writer is deputy director of the macroeconomics research department with the Chongyang Institute at Renmin University of China.


Key Words: G20   China   crossroad  

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