Can the G20 rise to the challenge of a fast-changing world?

The story of a club of nations

The idea of a forum of the world's most significant nations to discuss the biggest problems confronting the globe began in the aftermath of the 1970s oil shocks.

Back then, the five highest-income countries in the world — the United States, Japan, France, West Germany, and the United Kingdom  — convened a series of informal meetings at the White House Library in 1974 to discuss the implications of the crisis. They became known as the "Library Group."

Italy joined the following year, having been invited by the French president, Valéry Giscard d'Estaing. That started the Group of Six, and the tradition of the "G" as a prefix to the number of nations involved in the talks, which gave the club its now-famous name.

The G6 started to hold annual meetings under a rotating presidency, continuing informal discussions of economic and financial issues.

It became the G7 with the addition of Canada in 1975 and the European Union has been a guest at the summit since 1977. Russia regularly attended since 1994 and formally made it the G8 in 1997.

But the G8 did not last.

It was suspended after the 2014 invasion of Crimea and withdrew completely in 2017, turning the clock back to the days of the G7. But that came with a wider remit. Discussions now covered health, education, energy, the environment, justice, national security, food security, and more.

As the scope of the group widened, its membership structure started to look too restricted. And the relative proportion of the world economy accounted for by the biggest country was declining.

Talk of expanding membership went back to 1999 when G8 finance ministers and central bank governors – led by Canada's finance minister, Paul Martin – recommended the inclusion of major emerging economies.

The aim was to enhance international financial stability and create opportunities for dialogue between industrialised and emerging economies, including China, India, and Brazil which were among the fastest-growing countries over the past two decades.

And so the first G20 meeting was held on 15 November 2008 in Washington, convened on the initiative of the French president, Nicolas Sarkozy, and Britain's prime minister, Gordon Brown.

Argentina's President Cristina Fernandez de Kirchner, German Chancellor Angela Merkel, British Prime Minister Gordon Brown and French President Nicolas Sarkozy at the opening of the G20 Summit on November 15, 2008 in Washington, DC.

Rocky start to expansion

The expanded group faced criticism from the start, not least for not including some emerging economies, such as Malaysia, Thailand, Nigeria, Chile, and Iran.

Important players in global finance, such as Switzerland and Singapore, were also left out, although that was partially addressed by inviting Switzerland to attend meetings of G20 finance ministers and central bank governors, while Singapore has participated in several summits, including the one held in India.

Asia has seven members, China, South Korea, Indonesia, Japan, India, Turkey, and Saudi Arabia.

There is only one African nation in the G20 – South Africa – limiting its relevance to the continent, where both Nigeria and Egypt have bigger economies. There have been suggestions to include the 54-member African Union in the G20 talks, along the lines of the EU's representation.

Bringing in the AU would mean the G20 would feature more than a quarter of the members of the United Nations. Its single seat at the table would represent 1.3 billion people, roughly equivalent to the populations of China or India, and $2.3tn in GDP. It could also help promote policy coordination and cohesion among Africa's 55 economies.

There are other imbalances in the G20 over the over-representation of Europe. Three full G20 states – France, Germany, and Italy – are also in the EU, which has another seat. This complicates the picture implied by the group's seemingly simple name.

It means the G20 does not represent 20 countries but rather 43 countries (27 EU member states plus 16 countries outside the EU), with only 20 leaders at the discussion table.

These 43 countries constitute 22% of the member states of the UN. But they account for about 66% of the world's population and produce 87% of the global economy. Representation at the G20 gives these countries a significant voice in discussions and decisions.

Criticism abounds

Ever since the G20 began, it has often been seen as an extension of the G7, which was itself long seen as just a club of wealthier nations.

G7 leaders pose on a boat in Hiroshima.

Read more: G7: Valuable forum or outdated irrelevance?

Alongside this criticism, there has been concern both at a lack of a structure to apply its decisions and worries about the legitimacy of the group to wield such influence.

The World Social Forum in Dakar in February 2011 described the G20 as "an assembly of the wealthiest nations that challenges others and positions itself as the guarantor of global economic and financial stability in the wake of the 2008 financial crisis, but it hasn't done much to protect the people from this major crisis."

There have also been suggestions that the G20 wants to go beyond its economic role to become a dominant political forum.

They rose when the US and the EU used the forum to condemn Russia for invading Ukraine, to objections from Moscow and Beijing, although Brussels and Washington claimed they were drawing attention to the economic impact of the conflict.

A Chinese snub to Modi

China has also been accused of bringing purely political concerns into G20 meetings. President Xi Jinping will not personally participate in the upcoming summit to avoid adding to the personal success it is extending to his rival and India's leader, Narendra Modi.

A cyclist rides past a bus waiting shelter with a poster of Indian Prime Minister Narendra Modi ahead of this week's summit of the Group of 20 nations in New Delhi, India, Monday, Sept. 4, 2023.

Read more: All eyes on India as G20 leaders head to New Delhi

Xi also wants to avoid the US's President Joe Biden, due to tensions between the countries.

This roster of criticisms and limitations led to the calls for over-reliance on the G20 to be avoided, including from veteran banker William Rhodes. At a time of crisis, it is not an effective means for effective international cooperation, especially in an emergency.

Best hope

But American political commentator Fareed Zakaria believes that global governance can only evolve through the G20. On the one hand, the UN General Assembly suffers from lengthy discussions, and the Security Council is paralysed by the right of veto.

Many tasks are perhaps better suited to the G20, which better represents the global power dynamic. It can also be a useful venue for the US to cut the appearance of hegemony.

The G20 is a strong complement to the UN according to the global development economist Professor Jeffrey Sachs. He sees its limited number of members and representation of most of the world's economic output as a strength.

If it were to expand by including the African Union, it could overcome some of the criticisms it faces without losing its ability to be nimble.

Sachs says the G20 is currently the best and most effective foundation for the international management of economic pluralism.

Although there are several high-level dialogue forums around the world, the G20 is considered the most important of these groups because it supports global dialogue by providing solutions to economic issues.

Unlike at the UN, G20 talks involve only high-level representation from fewer leaders. Even if G20 resolutions do not have the force of international law, they can support UN resolutions in many areas.

The strongest response to the claim that the G20 is a club for the wealthy is that it has recently been chaired by a troika of emerging economies: Indonesia in 2022, India in 2023, and Brazil in 2024.

G20 Leaders raise their garden hoes for a group photo during a tree planting event at the Taman Hutan Raya Ngurah Rai Mangrove Forest, on the sidelines of the G20 summit meeting in Nusa Dua, on the Indonesian resort island of Bali.

India's G20 Priorities and a burning issue

India has outlined its priorities for the summit:

• Admission of the African Union as a permanent member of the G20.

• The reform of international institutions, especially the International Monetary Fund and the World Bank.

• Enhancing the role of development banks in addressing the challenges of inflation, high levels of debt, and debt restructuring in low-income countries

These priorities are in line with those of the US, but China is opposed to the last one as it seeks a greater role for itself in that area.

Throughout India's time with the rotating presidency of the group, it has sought greater fairness, not least over international tax rules to make them less onerous for the poorest countries. It has also prioritised sustainable development, capacity building, combating economic crime and banking regulation.

Climate change remains a matter of survival and much attention will focus on what is achieved at the summit over that burning issue.

The hope is that this summit will make historic decisions, including, in particular, reform for international institutions to make them fit for the multipolar globe. In New Delhi, the G20 must seek to represent — and define  — a future that fits a fast-changing world.

It will be a vital moment for the forum and everything it represents