Wednesday, March 2, 2016

G-20

G-20 is an international forum that came up after the financial crisis of 1999 in order to facilitate economic cooperation at international level. Though G-20 leaders have made coalitions making it difficult to agree to a common point and there is an absence of enforcement mechanism, the G-20 can't be labeled as a failure. The 'success' of G-20 is evident by its role played during the economic crisis of 2008 and the recent volatile environment in global economy-
* Increased the lending from IMF institutions to help countries in 'economic reconstruction'
* Collected information on shadow banking system that remain outside the regulatory framework
* Endorsing India's stand on black money that can otherwise make the economic system even more fragile
* Discussing measures to widen the financial safety net to contain and avoid propagation of financial crisis
However, there are certain issues that have raised doubts over its role in this time of financial crisis-
* Pledge to raise group GDP by 2% by 2018 remain a distant dream in the wake of current trends
* Competitive devaluation has not come to halt despite repeated persuasion by the G-20 leaders
Thus, it can be said that G-20 though successful faces some roadblock in realizing its full potential. Persuading the members to avoid indulgence in currency wars that have the potential to impact the financial security of nations should be the way forward.

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