Economy

Group of 20 (G-20)

What is the Group of 20 (G-20)?

The Group of 20, also known as the G20, is a group of finance ministers and central bank governors from the world’s 19 largest economies, including many in developing countries, as well as the European Union. The G-20 was established in 1999 to promote global economic growth, international trade and financial market regulation.

Because the G-20 is a forum, not a legislature, its agreements and decisions have no legal implications, but they do affect national policy and global cooperation. The economies of the G-20 countries account for more than 80 percent of world gross domestic product (GWP), 75 percent of world trade, and 60 percent of the world’s population. After the first leaders’ summit in 2008, G20 leaders announced that the group would replace the G8 as the main national economic council.

key takeaways

  • The G-20 is the premier forum for global financial issues, and its membership includes major developed and developing economies.
  • While not a legislature, its discussions help shape financial policy within each of its member countries.
  • Recent agenda items at the G-20 meeting include cryptocurrencies, food security and trade wars.

G-20 Policy Priorities

The agenda and activities of the G20 are set by the Presidency in cooperation with member countries. Initially, the panel discussion focused on sovereign debt sustainability and global financial stability. These themes have been common topics at G20 summits, as well as discussions on global economic growth, international trade and financial market regulation.

During the current Indonesian presidency, the G20 focuses on three interconnected pillars of action: the global health architecture, digital transformation and sustainable energy transition. The 2021 summit takes place in Rome on October 30-31. Some of the themes for this year’s summit include: supporting SMEs and women-owned businesses, the role of the private sector in tackling climate change, and sustainable development.

Previously, the 2019 G-20 Osaka Summit focused on the global economy, trade and investment, innovation, environment and energy, employment, women’s empowerment, development and health. In 2018, Argentina proposed to focus on the future of work, developing infrastructure and the future of sustainable food. That meeting also included talks on cryptocurrency regulation and the U.S.-China trade war.

1999

The year the Group of 20 (G-20) was formed.

Group of 20 (G-20) and Group of Seven (G-7)

The ranks of the G-20 include all members of the Group of Seven (G-7), a forum of the European Union and seven of the world’s largest advanced economies: France, Germany, Italy, Japan, the United States, the United States, and Canada. Founded in 1975, the G-7 meets annually on international issues, including economic and monetary issues.

In addition to being older than the G-20, the G-7 is also sometimes described as a more political body, as all its meetings have long included not only the finance minister but also chief ministers including the president and prime minister. However, since the 2008 global financial crisis, the G20 has held an increasing number of summits, including political leaders as well as finance ministers and bank governors.

While the G-7 is composed entirely of developed countries, many of the 12 other countries that make up the G-20 are from developing economies. In fact, having a forum where developed and emerging countries can negotiate is part of the impetus for the creation of the G20.

Russia and the Group of 20 (G-20)

In 2014, the G7 and G20 took a different approach to Russia’s membership after Russia’s military invasion of Ukraine and eventual annexation of Ukrainian territory Crimea. Russia formally joined the G-7 in 1998 to create the G-8, suspending its membership in the group; Russia subsequently decided to formally withdraw from the G-8 in 2017.

Although Australia, which hosted the G-20 summit in Brisbane in 2014, proposed banning Russia from the summit, Russia remains a member of the larger bloc, thanks in part to strong support from Brazil, India and China, which together with Russia are known as the BRICS nation.

Group of 20 (G-20) members

In addition to the members of the G-7, 12 other countries currently include the G-20: Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey.

In addition, the G20 invited guest countries to participate in their events. Spain and the current Chair of the Association of Southeast Asian Nations (ASEAN) are invited on a permanent basis; two African countries (the Chair of the African Union and a representative of NEPAD) and at least one country invited by the Chair, usually from their region.

International Monetary Fund, World Bank, United Nations, Financial Stability Board, World Trade Organization and other international organizations also attended the summit.

The task of ensuring the continuity of the G-20 is handled by the “troika”, which is represented by the countries holding the presidency, its predecessors and successors. The current troika countries include Italy, Indonesia and India.

The G-20 has been criticized for a lack of transparency, trade deals that encourage the empowerment of big companies, slow response to climate change and failure to address social inequalities and global threats to democracy.

Criticism of the G-20

Some of the G20’s actions have been controversial since its inception. Concerns include transparency and accountability, with critics calling attention to the group’s lack of a formal charter and the fact that some of the most important G-20 meetings are held behind closed doors.

Some of the group’s policy prescriptions were also unpopular, especially by liberal groups. The protests at the group’s summit, among other criticisms, accused the G-20 of encouraging stronger trade deals for big business, poor performance in tackling climate change, and failure to address social inequality and global threats to democracy.

G-20 membership policies have also come under fire. Critics say the group is too restrictive and its addition of guests, such as those from African countries, is nothing more than a symbolic effort to make the G-20 reflect the diversity of the world’s economy. Former US President Barack Obama noted the challenge of determining who can join such a powerful group: “Everyone wants the smallest possible group that includes them. So if they are the 21st in the world Big countries, they want G-21s and think it’s very unfair if they get deleted.”

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