What to Expect: Brazil’s G20 Presidency
On December 1, 2023, Brazil took over the presidency of the Group of 20 (G20) from India (the recent addition of the African Union as a permanent member means the forum has 21 members, but for now it’s still being called the G20). Brazil’s presidency—its first time heading the organization—will include over 100 meetings spread throughout the year, culminating in the Leaders’ Summit in Rio de Janeiro on November 18-19, 2024.
The year 2024 will mark the third in a four-year run of major emerging economies holding the presidency: Indonesia in 2022, India in 2023, Brazil in 2024 and South Africa in 2025, before the United States will end that streak in 2026. Given that the G20 has become one of the world’s preeminent fora for global economic governance—if not a fully inclusive one—this run marks an opportunity to center the needs of the Global South at a time where they face acute challenges including: high interest rates, debt distress, climate impacts and geopolitical challenges. India’s presidency made some progress in this direction, including pushing forward climate ambition and advancing the evolution of the multilateral development banks (MDBs).
Brazilian President Luiz Inácio Lula da Silva has positioned himself as a unifying global leader—and right now, the world could use one. With a backdrop of major global challenges and significant division, what should the G20 focus on in 2024? Three issues stand out: debt, climate finance and global economic governance reform.
Brazil’s priorities in a complex geopolitical environment
Brazil’s motto for its G20 presidency is “building a fair world and a sustainable planet,” reflecting the fact that while Brazil is interested in addressing climate change, the country also hopes to tackle a broad suite of challenges that Global South countries have faced in recent years. This focus comes through in the three priorities that President Lula laid out in a speech at the closing of the G20 New Delhi Summit: “1) social inclusion and the fight against hunger, 2) energy transition and sustainable development in its three aspects (social, economic and environmental) and 3) reform of global governance institutions.”
Advancing these priorities will require managing intense divisions among the G20’s membership. Disagreements over Russia’s war in Ukraine repeatedly prevented the G20 from releasing joint statements, making India’s ability to achieve a leaders’ level declaration during its presidency count as an accomplishment. President Lula already experienced this tense context when he received significant backlash for saying that Russian President Vladimir V. Putin would not be arrested if he were to attend the summit in Rio de Janeiro, despite the International Criminal Court’s warrant against Putin. President Lula walked back that statement several days later.
Although these geopolitical divisions would create difficulties for any leader, President Lula may be well placed to bridge divides. He has sought to preserve Brazil’s nonalignment and has kept an open door for engaging with a wide range of countries. This has helped position Brazil as a leader in the Global South, and President Lula has played an important role in new initiatives like an alliance of rainforest nations and the expanded Brazil, Russia, India, China and South Africa bloc (BRICS). In addition to South-South cooperation, President Lula has collaborated with Global North countries, as in the creation of a new partnership with the US to advance labor rights.
The timing of next year’s G20 summit during a packed November could either add to its challenges or—with luck and leadership—catalyze ambitious multilateral action. The US elections will take place in early November. The 2024 United Nations Climate Change Conference (COP29) will convene soon after, with a New Collective Quantified Goal to replace the 2009 $100 billion climate finance promise set to be agreed. Brazil’s G20 summit will overlap with COP29. The negotiations at COP29 will help set the stage for another major event in Brazil in 2025: COP30 hosted in the Amazonian city of Belém. South Africa’s G20 presidency will overlap with COP30 and will likely advance action on Global South priority issues, and the US’s 2026 G20 presidency could provide an occasion for an increase in Global North action on issues like a World Bank capital increase. If—and that’s a big if—things fall into place, Brazil’s G20 presidency could be the start of a three-year period that puts global climate and development action in a much better place.
Key areas for the G20 to tackle
Debt will have to be high on the G20’s agenda. The G20 showed leadership in creating the Common Framework to help countries restore debt sustainability. However, the Common Framework has proved too slow and to provide insufficient relief, and the Common Framework’s legitimacy is hanging by a thread after a deal to restructure Zambia’s debt broke down because official creditors objected to a lack of comparability of treatment with private creditors. A better debt restructuring framework would provide a debt service standstill for countries applying for debt treatment, ensure private creditors participate fairly and transparently, and integrate climate and development goals. The International Monetary Fund’s (IMF) review of its Debt Sustainability Framework for Low-Income Countries, which takes place during Brazil’s G20 presidency, offers an additional opportunity to help turn the tide against high levels of debt distress.
Second, the G20 will have to increase the level of financing available to address climate change. The G20’s commitment in this year’s New Delhi Declaration to triple renewable energy capacity by 2030 has helped elevate this goal as a major negotiating point at COP28. However, this goal cannot be achieved without adequate financing. President Lula will recognize this point, having said that a key guideline of Brazil’s G20 presidency is that “there’s no point in agreeing on the best public policies if we don’t allocate necessary resources for their implementation.” Brazil is likely to review climate vertical funds like the Global Climate Fund during its presidency, and this is another area where it is vital to ensure promises don’t go unfunded: this year’s Green Climate Fund replenishment fell short of its target. The protection of tropical forests is expected to be another of Brazil’s climate finance priorities.
Third, Brazil’s G20 presidency provides an opportunity to make global economic governance more representative. The IMF’s 16th General Review of Quotas will almost certainly fail to increase emerging market and developing countries’ share of overall quotas. President Lula has criticized this system, including how it results in providing more Special Drawing Rights to richer economies than poorer ones. The IMF has committed to making progress on quota realignment by June 2025, and Brazil’s G20 presidency can help ensure that resistant member countries do not block the IMF from following through on its promise. Brazil can also advance the Indian G20 presidency’s work in strengthening MDBs, including by carrying out the roadmap laid out in the Independent Expert Group’s two volume-report. Not only can MDBs contribute much-needed additional finance—including concessional finance—to advance climate and development goals, but the capital increase process opens the door to reform unbalanced governance at the MDBs.
Making meaningful progress on these three fronts would go a long way to steadying the ship against a polycrisis that has hit Global South countries hardest. While it won’t be easy, Brazil’s G20 presidency could be a key inflection point.
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