Brookings explores the G20’s role in shaping global economic policies

The Brookings' Global Economy and Development program recently hosted a discussion on the G20's role in today's complex global landscape in Washington DC. The G20, which originated in the 1990s as an informal platform for discussing macroeconomic developments and financial stability, has evolved into a premier forum for international cooperation. South African Reserve Bank Governor Lesetja Kganyago participated in the event, where he highlighted both the successes and challenges facing the G20. One of the key strengths of the G20 is its ability to bring together major economies from around the world, creating a global and decisive institution. Over the years, the G20 has made significant contributions to global governance, with the global regulatory reform agenda being a standout achievement. The global financial system is now more resilient thanks to the efforts of the G20. During the COVID-19 pandemic, the G20 played a crucial role in coordinating responses and mobilizing finance, demonstrating its value in times of crisis. The Debt Service Suspension Initiative in 2020 helped provide fiscal support to vulnerable countries, showcasing the G20's commitment to sustainable growth. Despite the challenges it faces, the G20 remains an essential platform for international cooperation, with all members recognizing its importance and continuing to engage in its work. However, Governor Kganyago pointed out some key challenges that the G20 must address to enhance its effectiveness. He emphasized the need for a more focused agenda setting process supported by better decision-making mechanisms. With a large number of participants in G20 meetings, it becomes increasingly challenging to facilitate spontaneous conversations and robust debates. Governor Kganyago highlighted that the G20 operates most effectively during global crises, when participants are motivated to find common solutions quickly. However, outside of crisis situations, the G20 struggles to maintain relevance due to an overloaded and complex agenda. To address this issue, Governor Kganyago suggested narrowing the G20's scope to focus on the top priority issues each year, encouraging more meaningful discussions and intimate engagement among participants. By streamlining the agenda and facilitating clearer communication, the G20 can avoid becoming bogged down in vague discussions and instead focus on developing concrete solutions to global challenges. Additionally, Governor Kganyago recommended separating the various tracks within the G20 to enhance focus and effectiveness. By preserving its original focus on economic and financial stability issues, the G20 can continue to play a vital role in shaping global economic policies and promoting sustainable growth in the years to come.