Reflecting on Brazil’s G20 Presidency: Tackling poverty, inequality and financing challenges

This week saw the G20 Presidency being handed over to South Africa. The G20, which represents 85% of global gross domestic product (GDP) was founded in 1999 as a forum for finance ministers and central bank governors from 19 countries and the European Union to discuss international economic cooperation and financial stability in the aftermath of various economic and financial crises at the time. This year marked a milestone 25th anniversary for the G20’s Finance Track. 

A wide range of issues were discussed in the Finance Track of Brazil’s G20 Presidency in 2024. In this article, I delve into three: (1) the Global Alliance against Hunger and Poverty; (2) the mainstreaming of inequality in all the different working group discussions; and (3) the adoption of a G20 Roadmap towards Better, Bigger, and More Effective Multilateral Development Banks (MDBs). 

The Global Alliance Against Hunger and Poverty 

The Brazilian Presidency launched the Global Alliance Against Hunger and Poverty, which aims to address the challenges through a coordinated and multi-stakeholder approach. This Alliance arrives at a critical juncture: following setbacks during the COVID-19 pandemic, a renewed push is needed to meet the corresponding Sustainable Development Goals (SDGs). The Alliance aims at supporting the estimated 240 million workers worldwide who earn less than $2.15 per day (in PPP terms). Equally concerning are the “near-poor” workers earning under $3.65 per day, a threshold of moderate working poverty that almost doubles the number of extreme working poor. With the African Union joining the G20 discussions for the first time under the Brazilian Presidency, poverty and hunger will continue to be critical issues for the G20 in the years to come. As employment constitutes the primary, if not only, income source for most households, including poor households, generating decent employment opportunities is the surest pathway out of poverty.

Putting inequality at the heart of G20 

The issue of inequality, a pressing challenge for the G20 (and a driving element of the ILO-led Global Coalition for Social Justice), permeated throughout all the different working group discussions. In the Finance Track’s Framework Working Group, the implications of inequality on macroeconomic performance were discussed extensively. Based on those discussions, and inputs of the ILO and other international organizations, a menu of policy measures and recommendations to address inequality pressures was developed. The Menu notes, in particular, the importance of increasing aggregate demand for quality employment opportunities, which in turn opens up further possibilities for redistributive policies. This focus on inequality also comes at a pivotal time. The labour share of national income, one measure of inequality, has experienced a long-term decline since at least the 1980s, with a rising share going to owners of capital. That trend has continued from 2004 until now, with the share in G20 economies decreasing by more than two percentage points, equivalent to trillions dollars* (see also ILO, 2024). Such developments can weaken long-term growth and social cohesion. 

A Roadmap towards Better, Bigger, and More Effective Multilateral Development Banks (MDBs) 

A central theme of Brazil’s G20 Presidency was global governance reform, particularly the need to modernize and make MDBs more responsive to today’s challenges. Towards this end, the G20 Roadmap towards Better, Bigger, and More Effective MDBs was developed. The Roadmap is part of efforts to reform MDBs to better incorporate the voice of the Global South.  At the heart of the Roadmap also lies the recognition that development financing needs are immense and reforming MDBs is one avenue to unlock additional financing that can support developing countries. By one estimate, the gap between the collective resources required to meet the SDGs and the actual financial resources available to these countries (financing gap) is US$4 trillion annually (UNCTAD, 2023). This financing gap is both vast and growing – estimated at US$ 2.5 billion per year just prior to the adoption of the SDGs in 2015. This also echoes the call of the Global Coalition for Social Justice to overcome the financial gaps to accelerate progress on the SDGs, particularly SDG8. 

Looking Ahead: South Africa’s Presidency 

Under Brazil’s leadership, the G20 addressed some of the world’s most pressing issues with tangible initiatives that reflect a vision for a more equitable, sustainable future. As we look to the next G20 presidency under South Africa, the progress achieved this year under the Finance Track strengthens the foundations for further progress on the issues of poverty, inequality, and development financing. 

© Photo from G20 Brazil FWG Policy Team

* During crises (for example the 2008 global economic crisis and the 2020 COVID-19 pandemic), the labour income share typically experiences a temporary increase, as corporate profits tend to contract more sharply than wages.  

Kee Beom Kim is the Macroeconomic and Employment Policies Specialist at the Employment Policy, Job Creation and Livelihoods Department of the International Labour Office (ILO), based in Geneva, Switzerland. During his twenty year tenure at the ILO, he was also based in Bangkok and Jakarta. His work focuses on undertaking research on key macroeconomic and employment issues and on providing technical support in the design and implementation of economic, employment and labour market policies.