The G20 is an international forum for the governments and central bank governors from 19 countries and the European Union
The Group of Twenty, more commonly referred to as G20, is a collection of Central Bank Heads and Finance ministers to discuss important global economic issues.
The Group of Twenty (G20), a collection of twenty of the world’s largest economies formed in 1999, was conceived as a bloc that would bring together the most important industrialized and developing economies to discuss international economic and financial stability.
Its annual summit, a gathering of G20 leaders that debuted in 2008, has evolved into a major forum for discussing economics as well as other pressing global issues.
While not an official regulatory body, the G20 has formidable power when it comes to international finance. Its agenda often leads to reform, defining the path of the global economic and monetary systems.
In times of prosperity or crisis, the G20 is viewed as a pillar of the world’s financial community and a premier decision-making body.
Composition And Mission
The G20 is made up of the world’s economic superpowers, financial leaders, and developing nations.
As a whole, G20 members represent every continent (except Antarctica).
|Australia||Germany||Korea, Republic of||Turkey|
|China||Italy||Saudi Arabia||European Union|
The nations of the G20 account for around 80 percent of global economic output, nearly 75 percent of all global trade, and about two-thirds of the world’s population.
The G20 is officially made up of 19 member nations, the European Union (EU), and permanent guest country Spain.
Below is a list of the individual member nations by region:
- Africa: South Africa
- Asia: China, India, Indonesia, Japan, South Korea
- Americas: Argentina, Brazil, Canada, Mexico, United States
- Europe: France, Germany, Italy, Russia, United Kingdom, EU members
- Middle East: Saudi Arabia, Turkey
- Oceania: Australia
The G20 is not a permanent institution with a headquarters, offices, or staff.
Instead, its leadership rotates on an annual basis among its members, its decisions are made by consensus, and implementation of its agenda depends on the political will of the individual states.
Serving as a non-partisan and independent think tank, the G20’s formal mission statement is as follows:
- “Act as a facilitator and mediator for expert discourse, with a focus on innovation-driven communication.”
- “Initiate and coordinate communication between governments, business, academia, and youth, in an effort to create a sustainable win-win situation for all involved.”
History of the G20
Its creation dates back to the late 1990s and a decision to expand the existing Group of Seven (G7).
The G20 was formed in 1999, in the wake of the Asian financial crisis, to unite finance ministers and central bankers from twenty of the world’s largest established and emerging economies.
Citing a need to “broaden the dialogue on key economic and financial policy issues” while “promoting co-operation and achieve sustainable global economic growth for all,” acting G7 ministers sought to extend the reach of the group.
The result was the inclusion of the world’s most influential economies, both advanced and emerging.
One of the inspirations behind the G20’s foundation was the framework put forth by the Bretton Woods Accords.
In December 1999, acting G7 heads summoned “counterparts from a number of systemically important countries from regions around the world” to Berlin, Germany.
Their task was to engage challenges facing the international economic and financial environment, and the invitees included leading global powers and developing nations.
In addition, the meeting in Berlin featured representatives from several Bretton Woods holdovers such as the IMF and World Bank.
A decade later, at the height of the global economic crisis, the G20 was elevated to include heads of state and government.
One of the G20’s founding principles was to recognize the growing importance of developing nations and foster full integration of the global economy.
These objectives were outlined in the G20’s mandate:
- Help shape the international agenda.
- Debate economic and financial issues that lack consensus opinion.
- Prevent and resolve international financial crises.
- Strengthen financial systems through transparency.
The G20 Leaders Summit
A key function of the G20 is the annual Leaders Summit where heads of state, central bankers, and various civil and business leaders are invited to share ideas regarding global economic health.
Every year, the leaders of G20 members meet to discuss mainly economic and financial matters and coordinate policy on some other matters of mutual interest
It is held over a two-day period and is the culmination of the year’s work.
The G20 initially focused largely on broad macroeconomic policy, but it has expanded its focus.
Economic and financial coordination remains the centerpiece of each summit’s agenda, but issues such as the future of work, terrorism, and global health are recurring focuses as well.
Following the Leaders Summit, the G20 issues a formal statement regarding its official recommendations crafted throughout the year.
The inaugural Leaders Summit was held in 2008 in Washington D.C., United States. Since that time, the periodic meeting has been held in various international locations.
Future venues are announced ahead of time, in a similar fashion to those of the Olympic Games.
G20 Member nations rotate the honor of entertaining the Leaders’ Summit, and host cities are nominated by leadership of the president nation.
The annual G20 Leaders’ Summit is attended by the most powerful heads of state and business in the world.
Often, news breaking from the conference enhances the pricing volatility in equities, futures, and currency markets.
More recent summits have struggled to cope with a U.S. shift toward unilateralism under President Trump.
These gatherings have avoided using previously standard language about rejecting protectionism and promoting international cooperation.