G-20 Summit in Rome- Time for action

Table of Contents

G-20 Summit in Rome- Relevance for UPSC Exam

GS Paper 2: International Relations- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Recently, the leaders of the G20 met in Rome, Italy for the first in-person meeting in two years after COVID-19 Pandemic.

G-20 Leaders discussed the biggest issues facing the global community today, including-
- COVID-19 pandemic,
- Climate change,
- A major tax agreement, and
- Steps to address concerns regarding global economic growth and stability.

The focus was on vaccine production and distribution with assurances of support to WHO’s target of-
- Vaccinating 40% or more of the global population against COVID-19 by 2021, and
- Vaccination of at least 70% by mid-2022.
Cooperation among G-20 countries to overcome supply and financing constraints. This is expected to boost the supply of vaccines in developing countries.

G20 leaders recommitted their nations to provide $100 billion a year toward adaptation, mitigation, and green technologies, focusing on the needs of developing countries.
- G20 leaders committed to limiting global warming to 1.5° C and identified sustainable and responsible consumption and production as “critical enablers”.

Issues: Post covid-9, countries are facing rising inflation, spiking energy prices, and alarming supply chain bottlenecks, etc.
G20 leaders affirm that national stimulus policies would not be removed prematurely.
- it would remain a challenge to walk the tightrope between preserving financial stability and fiscal sustainability.

G20 leadership agreed to slap multinationals with a minimum 15% tax to create “a more stable and fairer international tax system”.
Impact: This would impact the tech titans of Silicon Valley, as this initiative would make it harder for such companies to benefit from locating themselves in relatively lower-tax jurisdictions.
Background: This OECD-led reform enjoys the support of 136 countries, which account for more than 90% of global GDP, and is likely to enter into force in 2023 or after.
Associated challenge: Nations such as the U.S. are divided on whether to approve this proposal domestically and unless there is unanimity amongst the discussants, the initiative risks facing implementation delays.

The G20 meeting has come at a critical moment for the global political economy. If it results in timely, effective, coordinated action across major nations, hope for recovery will remain afloat.