Group of 20 (G-20)

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

The Group of 20, also called the G-20, is a group of finance ministers and central bank governors from 19 of the world's largest economies, including those of many developing nations, along with the European Union. Formed in 1999, the G-20 promotes global economic growth, international trade, and regulation of financial markets.

Because the G-20 is a forum, not a legislative body, its agreements and decisions have no legal impact, but they do influence countries' policies and global cooperation. Together, the economies of the G-20 countries represent more than 80% of the gross world product (GWP), 75% of world trade, and 60% of the world population. After its inaugural leaders' summit in 2008, the leaders of the G-20 announced that the group would replace the G-8 as the main economic council of nations.

Key Takeaways

  • The G-20 is a leading forum for global financial issues whose members include major developed and developing economies.
  • Although not a legislative body, its discussions help shape financial policy within each of its member countries.
  • Recent agenda items at G-20 meetings have included cryptocurrency, food security, and trade wars.

Policy Focus of the Group of 20 (G-20)

The agenda and activities of the G-20 are established by its rotating Presidencies, in cooperation with the membership. Initially, the group's discussion had a focus on the sustainability of sovereign debt and global financial stability. Those themes have continued as frequent topics at the G-20's summits, along with discussions about global economic growth, international trade, and the regulation of financial markets.

Under the current Indonesian Presidency, the G-20 is focused on three interconnected pillars of action: global health architecture, digital transformation, and sustainable energy transition. The 2021 summit was held in Rome on Oct. 30 and 31. Some of the topics at this year's summit included: supporting SMEs and women-owned businesses, the role of the private sector in the fight against climate change, and sustainable development.

Previously, the 2019 G-20 Osaka summit focused on the global economy, trade and investment, innovation, the environment and energy, employment, women's empowerment, development, and wellness. In 2018, Argentina proposed a focus on the future of work, infrastructure for development, and a sustainable food future. That meeting also included talks on the regulation of cryptocurrencies and the U.S.-China trade war.

1999

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

The Group of 20 (G-20) vs. the Group of Seven (G-7)

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

Apart from being older than the G-20, the G-7 has sometimes been described as a more political body because all of its meetings have long included not only finance ministers but chief ministers, including presidents and prime ministers. However, the G-20, since the global financial crisis of 2008, has increasingly held summits that include political leaders as well as finance ministers and bank governors.

And where the G-7 exclusively comprises developed countries, many of the additional 12 nations that make up the G-20 are drawn from those with developing economies. Indeed, having a forum at which developed and emerging nations could confer was part of the impetus for creating the G-20.

Russia and the Group of 20 (G-20)

In 2014, the G-7 and G-20 took different approaches to Russia's membership after the country made military incursions into Ukraine and eventually annexed the Ukrainian territory of Crimea. G-7, which Russia had formally joined in 1998 to create the G-8, suspended the country's membership in the group; Russia subsequently decided to formally leave the G-8 in 2017.

Though Australia, host of the 2014 G-20 summit in Brisbane, proposed to ban Russia from the summit over its role, Russia has remained a member of the larger group, in part because of strong support from Brazil, India, and China, who together with Russia are collectively known as the BRIC nations.

Membership of the Group of 20 (G-20)

Along with the members of the G-7, 12 other nations currently comprise the G-20: Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, and Turkey.

In addition, the G-20 invites guest countries to attend their events. Spain is invited permanently as is the current chair of the Association of Southeast Asian Nations (ASEAN); two African countries (the chair of the African Union and a representative of the New Partnership for Africa's Development) and at least one country invited by the presidency, usually from its own region.

International organizations such as the International Monetary Fund, the World Bank, the United Nations, the Financial Stability Board, and the World Trade Organization also attend the summits.

The work of ensuring the continuity of the G-20 is handled by a "Troika," represented by the country that holds the Presidency, its predecessor, and its successor. The current Troika countries include Italy, Indonesia, and India.

The G-20 has been criticized for lack of transparency, encouraging trade agreements that strengthen large corporations, being slow to combat climate change, and failing to address social inequality and global threats to democracy.

Criticism of the Group of 20 (G-20)

Since its inception, some of the G-20's operations have drawn controversy. Concerns include transparency and accountability, with critics calling attention to the absence of a formal charter for the group and the fact that some of the most important G-20 meetings are held behind closed doors.

Some of the group's policy prescriptions have also been unpopular, especially with liberal groups. Protests at the group's summits have, among other criticisms, accused the G-20 of encouraging trade agreements that strengthen large corporations, of being delinquent in combating climate change, and in failing to address social inequality and global threats to democracy.

The G-20's membership policies have come under fire, too. Critics say the group is overly restrictive, and its practice of adding guests, such as those from African countries, is little more than a token effort to make the G-20 reflective of the world's economic diversity. Former U.S. President Barack Obama noted the challenge of determining who can join such a powerful group: "Everybody wants the smallest possible group that includes them. So, if they're the 21st largest nation in the world, they want the G-21, and think it's highly unfair if they have been cut out."

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