What is
the G-20 ? Some Facts and Data
·
The Group of Twenty (G-20) Finance Ministers
and Central Bank Governors was established in 1999 to bring together
systemically important industrialized and developing economies to discuss key
issues in the global economy. The inaugural meeting of the G-20 took place in
Berlin, on December 15-16, 1999, hosted by German and Canadian finance
ministers.
Mandate
The G-20 is the premier forum
for our international economic development that promotes open and constructive
discussion between industrial and emerging-market countries on key issues
related to global economic stability. By contributing to the strengthening of
the international financial architecture and providing opportunities for
dialogue on national policies, international co-operation, and international
financial institutions, the G-20 helps to support growth and development across
the globe.
Origins
The G-20 was created as a
response both to the financial crises of the late 1990s and to a growing
recognition that key emerging-market countries were not adequately included in
the core of global economic discussion and governance. Prior to the G-20
creation, similar groupings to promote dialogue and analysis had been
established at the initiative of the G-7. The G-22 met at Washington D.C. in April
and October 1998. Its aim was to involve non-G-7 countries in the resolution of
global aspects of the financial crisis then affecting emerging-market
countries. Two subsequent meetings comprising a larger group of participants
(G-33) held in March and April 1999 discussed reforms of the global economy and
the international financial system. The proposals made by the G-22 and the G-33
to reduce the world economy’s susceptibility to crises showed the potential
benefits of a regular international consultative forum embracing the
emerging-market countries. Such a regular dialogue with a constant set of
partners was institutionalized by the creation of the G-20 in 1999.
Membership
The G-20 is made up of the
finance ministers and central bank governors of 19 countries and the European
Union:
§ Argentina
§ Australia
§ Brazil
§ Canada
§ China
§ European
Union
§ France
§ Germany
§ India
§ Indonesia
§ Italy
§ Japan
§ Mexico
§ Russia
§ Saudi
Arabia
§ South
Africa
§ Republic
of Korea
§ Turkey
§ United
Kingdom
§ United
States of America
To ensure global economic fora
and institutions work together, the Managing Director of the International
Monetary Fund (IMF) and the President of the World Bank, plus the chairs of the
International Monetary and Financial Committee and Development Committee of the
IMF and World Bank, also participate in G-20 meetings on an ex-officio basis.
The G-20 thus brings together important industrial and emerging-market
countries from all regions of the world. Together, member countries represent
around 90 per cent of global gross national product, 80 per cent of world trade
(including EU intra-trade) as well as two-thirds of the world’s population. The
G-20′s economic weight and broad membership gives it a high degree of
legitimacy and influence over the management of the global economy and
financial system.
Achievements
The G-20 has progressed a range
of issues since 1999, including agreement about policies for growth, reducing
abuse of the financial system, dealing with financial crises and combating
terrorist financing. The G-20 also aims to foster the adoption of
internationally recognized standards through the example set by its members in
areas such as the transparency of fiscal policy and combating money laundering
and the financing of terrorism. In 2004, G-20 countries committed to new higher
standards of transparency and exchange of information on tax matters. This aims
to combat abuses of the financial system and illicit activities including tax
evasion. The G-20 has also aimed to develop a common view among members on issues
related to further development of the global economic and financial system.
To tackle the financial and
economic crisis that spread across the globe in 2008, the G20 members were
called upon to further strengthen international cooperation. Accordingly, the
G20 Summits have been held in Washington in 2008, in London and Pittsburgh in
2009, and in Toronto and Seoul in 2010.
The concerted and decisive
actions of the G20, with its balanced membership of developed and developing
countries helped the world deal effectively with the financial and economic
crisis, and the G20 has already delivered a number of significant and concrete
outcomes:
First, the scope of financial
regulation has been largely broadened, and prudential regulation and
supervision have been strengthened. There was also great progress in policy
coordination thanks to the creation of the framework for a strong, sustainable
and balanced growth designed to enhance macroeconomic cooperation among the G20
members and therefore to mitigate the impact of the crisis. Finally, global
governance has dramatically improved to better take into consideration the role
and the needs of emerging of developing countries, especially through the
ambitious reforms of the governance of the IMF and the World Bank.
Chair
Unlike international
institutions such as the Organization for Economic Co-operation and Development
(OECD), IMF or World Bank, the G-20 (like the G-7) has no permanent staff of
its own. The G-20 chair rotates between members, and is selected from a different
regional grouping of countries each year. In 2011 the G-20 chair is France. The
chair is part of a revolving three-member management Troika of past, present
and future chairs. The incumbent chair establishes a temporary secretariat for
the duration of its term, which coordinates the group’s work and organizes its
meetings. The role of the Troika is to ensure continuity in the G-20′s work and
management across host years.
Former
G-20 Chairs
§ 1999-2001
Canada
§ 2002
India
§ 2003
Mexico
§ 2004
Germany
§ 2005 China
§ 2006
Australia
§ 2007
South Africa
§ 2008
Brazil
§ 2009
United Kingdom
§ 2010
Republic of Korea
Meetings
and activities
It is normal practice for the
G-20 finance ministers and central bank governors to meet once a year. The
ministers’ and governors’ meeting is usually preceded by two deputies’ meetings
and extensive technical work. This technical work takes the form of workshops,
reports and case studies on specific subjects, that aim to provide ministers
and governors with contemporary analysis and insights, to better inform their
consideration of policy challenges and options.
Interaction
with other international organizations
The G-20 cooperates closely
with various other major international organizations and fora, as the potential
to develop common positions on complex issues among G-20 members can add
political momentum to decision-making in other bodies. The participation of the
President of the World Bank, the Managing Director of the IMF and the chairs of
the International Monetary and Financial Committee and the Development
Committee in the G-20 meetings ensures that the G-20 process is well integrated
with the activities of the Bretton Woods Institutions. The G-20 also works
with, and encourages, other international groups and organizations, such as the
Financial Stability Board and the Basel Committee on Banking Supervision, in
progressing international and domestic economic policy reforms. In addition,
experts from private-sector institutions and non-government organisations are
invited to G-20 meetings on an ad hoc basis in order to exploit synergies in
analyzing selected topics and avoid overlap.
External
communication
The country currently chairing
the G-20 posts details of the group’s meetings and work program on a dedicated
website. Although participation in the meetings is reserved for members, the
public is informed about what was discussed and agreed immediately after the
meeting of ministers and governors has ended. After each meeting of ministers
and governors, the G-20 publishes a communiqué which records the agreements
reached and measures outlined. Material on the forward work program is also
made public.
FAQ
1. When was the G-20 set up?
The G-20 first meeting was held in Berlin on December 1516,
1999.
2. Why was the G-20 set up?
The G-20 was created as a
response both to the financial crises of the late 1990s and a growing
recognition that key emerging-market countries were not adequately included in
the core of global economic discussion and governance. Prior to the G-20
creation, similar groupings to promote dialogue and analysis had been
established at the initiative of the G-7. The G-22 met at Washington D.C. in
April and October 1998. Its aim was to involve non-G-7 countries in the
resolution of global aspects of the financial crisis then affecting
emerging-market countries. Two subsequent meetings comprising a larger group of
participants (G-33) held in March and April 1999 discussed reforms of the
global economy and the international financial system. The proposals made by
the G-22 and G-33 to reduce the world economy’s susceptibility to crises showed
the potential benefits of a regular international consultative forum embracing
the emerging-market countries. Such a regular dialogue with a constant set of
partners was institutionalized by the G-20 creation in 1999.
3. How does the G-20 differ
from the G-7?
The G-7 was established in 1976
as an informal forum of seven major industrial economies: Canada, France,
Germany, Italy, Japan, the United Kingdom and the United States of America. The
G-7 conducts dialogue and seeks agreement on current economic issues on the
basis of the comparable interests of those countries. The G-20 was established
in 1999 and reflects the diverse interests of the systemically significant
industrial and emerging-market economies. (see: About the G-20). It has a high
degree of representativeness and legitimacy on account of its geographical
composition (members are drawn from all continents) and its large share of
global population (two-thirds) and world GNP (around 90 per cent). The G-20′s
broad representation of countries at different stages of development gives its
consensus outcomes greater impact than those of the G-7.
4. Can all member
countries exert equal influence?
Achieving consensus is the
underlying principle of G-20 activity with regard to comments, recommendations
and measures to be adopted. There are no formal votes or resolutions on the
basis of fixed voting shares or economic criteria. Every G-20 member has one
‘voice’ with which it can take an active part in G-20 activity. To this extent
the influence a country can exert is shaped decisively by its commitment.
5. What are the criteria
for G-20 membership?
In a forum such as the G-20, it
is particularly important for the number of countries involved to be restricted
and fixed to ensure the effectiveness and continuity of its activity. There are
no formal criteria for G-20 membership and the composition of the group has
remained unchanged since it was established. In view of the objectives of the
G-20, it was considered important that countries and regions of systemic
significance for the international financial system be included. Aspects such
as geographical balance and population representation also played a major part.
6. How are the G-20
taking forward work remitted to Finance Ministers by Leaders.
The G-20 Finance Ministers were
tasked from the Pittsburg Summit to take forward work in the following areas;
§ Framework
for Strong, Sustainable, and Balanced Growth
§ Strengthening
the International Financial Regulatory System
§ Modernizing
our Global Institutions to Reflect Today’s Global Economy
§ Reforming
the Mandate, Mission, and Governance of the IMF
§ Reforming
the Mission, Mandate, and Governance of Our Development Banks
§ Energy
Security and Climate Change
§ Strengthening
Support for the Most Vulnerable
§ Putting
Quality Jobs at the Heart of the Recovery
§ An Open
Global Economy.
