G20 (Group of Twenty) was formed in 1999 as an aftermath of Asian Economic Crisis (1997) and G7 club’s realization that engagement of emerging powers is required to enable global economic growth and the club of seven wealthy members can no longer steer the global economy towards prosperity. It is a group of 19 countries plus representatives of European Union (EU) and covers 2/3rd of the world population, 75% of global trade and 85% of Gross World Product (combined Gross National Product all the countries) making it a far more substantial representation of global powers than the United Nations Security Council.

Although it can not be denied that G20 did a remarkable job in managing Global Financial Crisis when its leaders refused to bow to the temptation of protectionism, but as an organization, it has not been able to fulfill the expectations that were the prime motivation towards its formation.

It has failed in promoting structural reforms in West dominated organizations like United Nations. Even on financial institutions, G20’s influence has been minimal. For example, it promised to deliver an overhaul in International Monetary Fund‘s member quota and voting rights by 2010 , but could only make it happen in 2012. It took another four years for the reforms to finally come into force, adding up the delay to over 6 years, that too for the proposals that were quite modest.

Another very critical failure of G20 is its inability in promoting world trade. Member countries are constantly signing bilateral and plurilateral regional trade agreements with other member/non-member countries, which off course is beneficial for the economic growth of participating countries. But these agreements are not benefiting the global community as a whole and are in fact skewing the trade towards the particular bloc. The agreements like Trans-Pacific Partnership (TPP, trade agreement among 12 Pacific Rim countries), Transatlantic Trade and Investment Partnership (TTIP, trade agreement between USA and EU) and Regional Comprehensive Economic Partnership (RCEP, a free trade agreement between Australia, China, Japan, India, South Korea, New Zealand and 10 ASEAN countries) are proofs of this growing alignment of member economies towards regional trade, which is counteracting the whole principle which G20 is supposed to follow.

If global trade and economic growth are to be promoted, G20 will have to stop neglecting the importance of consulting non-member countries about the policies that are going to affect them directly or indirectly. G20 members will also have to set aside their differences in other non-economic arenas( USA-Russia conflict on Syria, South China Sea disputes etc) and cooperate together to formulate economic policies that can benefit the whole global community and bring economic prosperity to the member as well as non-member countries.

Image credit: http://www.globalresearch.ca/


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