G20 Meeting in Saudi Arabia

• 24 Feb 2020

Why in News

Recently, the ministers and central bankers from the world’s largest economies participated in G20 meeting held in Riyadh (Saudi Arabia).

• It was presided by Saudi Arabia. Saudi Arabia is the first Arab nation to hold the G20 presidency.
• The 2020 G20 Presidency will focus discussions, forums, working groups and Ministerial Meetings under the theme of “Realizing Opportunities of the 21^st Century for All”.

Key Points

• Global Economy:
  
  • The global economic growth remains slow and downside risks due to the geopolitical and remaining trade tensions, and policy uncertainty.
  • Though the economic growth is expected to increase in 2020 and 2021 due to loose monetary policy and an easing of trade tensions.
• IMF’ Views at the Meeting:
  
  • It projects a “V-shaped, rapid recovery” for the global economy, but it warns about the uncertainty around the spread of the coronavirus (COVID 19).
  • The IMF also warned about other risks including rising debt levels in some countries as well as climate change.
• Demand for Global Taxation System:
  
  • It discussed ways to achieve consensus on a global taxation system for the digital era by the end of 2020.
    
    • It aims to allow governments to tax digital companies where they do business, rather than where they are registered for tax purposes.
  • India has also demanded closer collaboration between international revenue agencies to investigate tax affairs of offenders who cross borders for escaping tax investigation.

G-20

• About
  
  • The G20 is an informal group of 19 countries and the European Union, with representatives of the International Monetary Fund and the World Bank.
  • The G20 membership comprises a mix of the world’s largest advanced and emerging economies, representing about two-thirds of the world’s population, 85% of global gross domestic product, 80% of global investment and over 75% of global trade.
• Headquarter
  
  • The G20 operates as a forum and not as an organisation. Therefore, it does not have any permanent secretariat or management and administrative structure.
• Origin
  
  • 1997-1999 Asian Financial Crisis: This was a ministerial-level forum which emerged after G7 invited both developed and developing economies. The finance ministers and central bank governors began meeting in 1999.
  • Amid 2008 Financial Crisis the world saw the need for a new consensus-building at the highest political level. It was decided that the G20 leaders would begin meeting once annually.
• Members
  
  • The members of the G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union.
  • One nation holds the Chair every year, known as 'G20 Presidency'. Argentina chaired the G20 summit of 2018 and Japan for 2019.

V-Shaped Recovery

• A V-shaped recovery is characterized by a sharp economic decline followed by a quick and sustained recovery.
• The recession of 1953 is an example of a V-shaped recovery.
• A V-shaped recovery is different from an L-shaped recovery, in which the economy stays in a slump for a prolonged period of time.

Source: TOI