What is the G20?

The G20 is a multilateral forum representing the world’s largest economies, involving 19 countries – Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, and the United States – plus the European Union.

This forum represents more than 60% of the earth’s population, 75% of global trade, and 80% of the world’s gross domestic product (GDP).

The G20 was initiated by the G7 – a political forum consisting of seven democratic countries with advanced economies – in 1999, as a response to the group’s lack of inclusion and other criticism that it received, especially after the 1997/1998 Asian financial crisis.

This year, Indonesia is the host – also known as holding the presidency – of the G20, after receiving the baton from Italy in December 2021. In 2023, India will hold the G20 presidency.

United States President Joe Biden, Turkish President Recap, Australian Prime Minister Anthony Albanese and Canadian Prime Minister Justin Trudeau are some of the heads of state who are present at the G20 Summit in Bali.

With “Recover Together, Recover Stronger” as its theme, referring to the global post-pandemic recovery effort, the 2022 G20 summit is focusing on three major topics: strengthening global health architecture, digital transformation, and achieving a sustainable energy transition, with the planet’s climate crisis.

Topic discussed in the meeting,

1. Digital transformation

The next primary agenda item in G20 discussions is on digital transformation. The topic is being discussed by countries and stakeholders through the G20 Digital Working Group, which has carried out a series of activities and meetings since March 2022.

Digital transformation refers to efforts to optimize digital development to support the economy and also digital governance, in the hope that they become resilient in the face of future pandemics.

Digitalization is recognized as a key factor in driving a stronger, more inclusive post-pandemic economies, as it can engage more diverse groups, including women and small and medium enterprises, to globally cooperate in response to global crises.

The G20 considers this a crucial issue, as artificial intelligence continues to shift the landscape of the economy, people’s lifestyles and work, and is widely utilized by the health sector, especially with limited mobility during a pandemic.

At the digital working group meeting last September, the forum agreed on a priority issue – to improve post-pandemic digital connectivity, digital skills and literacy, as well as the security and trust of cross-border data flows. This issue is also being discussed across other G20 forums, such as in the Business20 (B20) group, which focuses on entrepreneurs, and also in the G20 Empower alliance, to respond to the gender gap in digital literacy.

Aside from that, an unfamiliar term that is often used in the G20 forums is “sustainable finance”. This refers to efforts to push the financial services industry to create sustainable economic growth that aligns with environmental interests. It is also known as green funding, stemming from the notion that the economy is intertwined with the planet climate crisis

2. Sustainable energy transition

The third agenda item at this year’s G20 meetings is on achieving a sustainable energy transition. This refers to efforts to encourage global transition from non-renewable energy use, such as petroleum and coal, to renewable energy, including solar, wind, and hydro.

As global demand for clean energy increases, so has the demand for a “just energy transition”. This means that the transition to cleaner energy sources must consider social, economic, and environmental justice in all levels of society.

The Indonesian government, for instance, needs to ensure that energy transition efforts will empower, and not harm, Indonesian citizens.

Another term that often comes up is “net-zero”, also known as being carbon-neutral, whereby the quantity of emissions released into the atmosphere is equal to the emissions absorbed by the earth.

Natural events on Earth release emissions, for example from volcanoes or underwater circulation of hot water. However, these emissions are absorbed and stored back (known as carbon sinking) in trees, peat areas, and reefs. We often call this the Earth’s natural carbon cycle.

Human activities, however, have disrupted this natural balance. These include the combustion of fossil fuels, pollution that destroys marine life, and forest encroachment. Ultimately, these activities will continue to increase the Earth’s temperature, which has increased by 1.2 °C since the pre-industrial era.

For this reason, countries worldwide – including the G20 – are presently taking various measures to restore this balance. According to the Paris Agreement, the deadline is 2050.