The G20 (or G-20 or Group of Twenty) is an international forum for the governments and central bank governors from Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russian Federation, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States, and the European Union. Founded in 1999, the G20 aims to discuss policy pertaining to the promotion of international financial stability. It seeks to address issues that go beyond the responsibilities of any one organization. The G20 heads of government or heads of state have periodically conferred at summits since their initial meeting in 2008, and the group also hosts separate meetings of finance ministers and foreign ministers due to the expansion of its agenda in recent years.
Membership of the G20 consists of 19 individual countries plus the European Union (EU). The EU is represented by the European Commission and by the European Central Bank. Collectively, the G20 economies account for around 85% of the gross world product (GWP), 80% of world trade (or, if excluding EU intra-trade, 75%), two-thirds of the world population, and approximately half of the world land area.
With the G20 growing in stature after its inaugural leaders' summit in 2008, its leaders announced on 25 September 2009 that the group would replace the G8 as the main economic council of wealthy nations. Since its inception, the G20's membership policies have been criticized by numerous intellectuals, and its summits have been a focus for major protests by left-wing groups and anarchists.
The heads of the G20 nations met semi-annually at G20 summits between 2009 and 2010. Since the November 2011 Cannes summit, all G20 summits have been held annually.
Video G20
History
Founding
The G20 is the latest in a series of post-World War II initiatives aimed at international coordination of economic policy, which include institutions such as the "Bretton Woods twins", the International Monetary Fund and the World Bank, and what is now the World Trade Organization.
The G20 was foreshadowed at the Cologne Summit of the G7 in June 1999, and formally established at the G7 Finance Ministers' meeting on 26 September 1999 with an inaugural meeting on 15-16 December 1999 in Berlin. Canadian finance minister Paul Martin was chosen as the first chairman and German finance minister Hans Eichel hosted the inaugural meeting.
A 2004 report by Colin I. Bradford and Johannes F. Linn of the Brookings Institution asserted the group was founded primarily at the initiative of Eichel, the concurrent chair of the G7. However, Bradford later described then-Finance Minister of Canada (and future Prime Minister of Canada) Paul Martin as "the crucial architect of the formation of the G-20 at finance minister level," and as the one who later "proposed that the G-20 countries move to leaders level summits." Canadian academic and journalistic sources have also identified the G20 a project initiated by Martin and then-US Treasury Secretary Larry Summers, as has Dawn Nakagawa of the Berggruen Institute. All acknowledge, however, that Germany and the United States played a key role in bringing their vision into reality.
Martin and Summers conceived of the G20 in response to the series of massive debt crises that had spread across emerging markets in the late 1990s, beginning with the Mexican peso crisis and followed by the 1997 Asian financial crisis, the 1998 Russian financial crisis, and eventually impacting the United States, most prominently in the form of the collapse of the prominent hedge fund Long-Term Capital Management in the autumn of 1998. It illustrated to them that in a rapidly globalizing world, the G7, G8, and the Bretton Woods system would be unable to provide financial stability, and they conceived of a new, broader permanent group of major world economies that would give a voice and new responsibilities in providing it.
The G20 membership was decided by Eichel's deputy Caio Koch-Weser and Summers' deputy Timothy Geithner. According to the political economist Robert Wade:
Geithner and Koch-Weser went down the list of countries saying, Canada in, Portugal out, South Africa in, Nigeria and Egypt out, and so on; they sent their list to the other G7 finance ministries; and the invitations to the first meeting went out.
Early topics
The G20's primary focus has been governance of the global economy. Summit themes have varied from year to year. The theme of the 2006 G20 ministerial meeting was "Building and Sustaining Prosperity". The issues discussed included domestic reforms to achieve "sustained growth", global energy and resource commodity markets, reform of the World Bank and IMF, and the impact of demographic changes due to an aging world population.
In 2007, South Africa hosted the secretariat with Trevor A. Manuel, South African Minister of Finance as chairperson of the G20.
In 2008, Guido Mantega, Brazil's Minister of Finance, was the G20 chairperson and proposed dialogue on competition in financial markets, clean energy, economic development and fiscal elements of growth and development.
On 11 October 2008 after a meeting of G7 finance ministers, US President George W. Bush stated that the next meeting of the G20 would be important in finding solutions to the burgeoning economic crisis of 2008.
Maps G20
Summits
The G20 Summit of the G20 Finance Ministers and Central Bank Governors, who prepare the leaders' summit and implement their decisions, was created as a response both to the financial crisis of 2007-2010 and to a growing recognition that key emerging countries were not adequately included in the core of global economic discussion and governance. Additionally, the G20 Summits of heads of state or government were held.
After the 2008 debut summit in Washington, DC, G20 leaders met twice a year: in London and Pittsburgh in 2009, and in Toronto and Seoul in 2010.
Since 2011, when France chaired and hosted the G20, the summits have been held only once a year. The 2016 summit was held in China, and 2017 summit was held in Hamburg, Germany.
A number of other ministerial-level G20 meetings have been held since 2010. Agriculture ministerial meetings were conducted in 2011 and 2012; meetings of foreign ministers were held in 2012 and 2013; trade ministers met in 2012 and 2014, and employment ministerial meetings have taken place annually since 2010.
In March 2014, the Australian foreign minister Julie Bishop, as host of the 2014 G20 summit in Brisbane, proposed to ban Russia from the summit over its role in the 2014 Crimean crisis. The BRICS foreign ministers subsequently reminded Bishop that "the custodianship of the G20 belongs to all Member States equally and no one Member State can unilaterally determine its nature and character."
In July 2017, Germany hosted the 2017 Summit. The 2018 Summit will be in Argentina, 2019 in Japan, and 2020 in Saudi Arabia.
List of summits
Chair rotation
To decide which member nation gets to chair the G20 leaders' meeting for a given year, all 19 sovereign nations are assigned to one of five different groupings. Each group holds a maximum of four nations. This system has been in place since 2010, when South Korea, which is in Group 5, held the G20 chair. The table below lists the nations' groupings:
Organisation
The G20 operates without a permanent secretariat or staff. The group's chair rotates annually among the members and is selected from a different regional grouping of countries. The chair is part of a revolving three-member management group of past, present and future chairs, referred to as the "Troika". 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 G20's work and management across host years. The current chair of the G20 is Germany, which hosted the 2017 Summit in Hamburg.
Proposed permanent secretariat
In 2010, President of France Nicolas Sarkozy proposed the establishment of a permanent G20 secretariat, similar to the United Nations. Seoul and Paris were suggested as possible locations for its headquarters. Brazil and China supported the establishment of a secretariat, while Italy and Japan expressed opposition to the proposal. South Korea proposed a "cyber secretariat" as an alternative. It has been argued that the G20 has been using the OECD as a secretariat.
List of members
As of 2017 there are 20 members of the group. These include, at the leaders' summits, the leaders of 19 countries and of the European Union, and, at the ministerial-level meetings, the finance ministers and central bank governors of 19 countries and of the European Union.
In addition each year, the G20's guests include Spain; the Chair of ASEAN; two African countries (the chair of the African Union and a representative of the New Partnership for Africa's Development) and a country (sometimes more than one) invited by the presidency, usually from its own region. The first of the tables below lists the member entities and their heads of government, finance ministers and central bank governors. The second table lists relevant statistics such as population and GDP figures for each member, as well as detailing memberships of other international organisations, such as the G7, BRICS and MIKTA. Total GDP figures are given in millions of US dollars.
Leaders
Member country data
In addition to these 20 members, the chief executive officers of several other international forums and institutions participate in meetings of the G20. These include the managing director and Chairman of the International Monetary Fund, the President of the World Bank, the International Monetary and Financial Committee and the Chairman of the Development Assistance Committee.
The G20's membership does not reflect exactly the 19 largest national economies of the world in any given year. The organization states:
In a forum such as the G20, 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 G20 membership and the composition of the group has remained unchanged since it was established. In view of the objectives of the G20, 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.
All 19 member nations are among the top 33 economies as measured in GDP at nominal prices in a list published by the International Monetary Fund (IMF) for 2014. Not represented by membership in the G20 are Switzerland (ranked 20th by the IMF), Nigeria (21), Taiwan (26), Norway (27), the United Arab Emirates (29), Iran (30), Colombia (31), and Thailand (32), even though they rank higher than some members. The Netherlands (17), Sweden (22), Poland (23), Belgium (25), and Austria (28) are included only as part of the EU, and not independently. Spain (14) is a permanent guest member.
When the countries' GDP is measured at purchasing power parity (PPP) rates, all 19 members are among the top 29 in the world for the year of 2014, according to the IMF. Iran (18), Taiwan (20), Nigeria (21), Thailand (22), Egypt (25), Pakistan (26), and Malaysia (28) are not G20 members, while Spain (16), Poland (23) and the Netherlands (27) are only included by virtue of being EU members. However, in a list of average GDP, calculated for the years since the group's creation (1999-2008) at both nominal and PPP rates, only Spain, the Netherlands, Nigeria, Poland, Taiwan, Iran and Thailand appear above any G20 member in both lists simultaneously.
Spain, being the 14th largest economy in the world and 5th in the European Union in terms of nominal GDP, has been a "permanent guest" of the organization, and the Spanish government's policy is to not request official membership. A Spanish delegation has been invited to, and has attended, every G20 heads of state summit since the G20's inception.
Role of Asian countries
A 2011 report released by the Asian Development Bank (ADB) predicted that large Asian economies such as China and India would play a more important role in global economic governance in the future. The report claimed that the rise of emerging market economies heralded a new world order, in which the G20 would become the global economic steering committee. The ADB furthermore noted that Asian countries had led the global recovery following the late-2000s recession. It predicted that the region would have a greater presence on the global stage, shaping the G20's agenda for balanced and sustainable growth through strengthening intraregional trade and stimulating domestic demand.
Invitees
Typically, several participants that are not permanent members of the G20 are extended invitations to participate in the summits. Each year, the Chair of the Association of Southeast Asian Nations; the Chair of the African Union; and a representative of the New Partnership for Africa's Development are invited in their capacities as leaders of their organisations and as heads of government of their home states. Additionally, the leaders of the Financial Stability Board, the International Labour Organization, the International Monetary Fund, the Organisation for Economic Co-operation and Development, the United Nations, the World Bank Group and the World Trade Organization are invited and participate in pre-summit planning within the policy purview of their respective organisation. Spain is a permanent non-member invitee.
Other invitees are chosen by the host country, usually one or two countries from its own region. For example, South Korea invited Singapore. International organisations which have been invited in the past include the Asia-Pacific Economic Cooperation (APEC), the Basel Committee on Banking Supervision (BCBS), the Commonwealth of Independent States (CIS), the Eurasian Economic Community (EAEC), the European Central Bank (ECB), the Food and Agriculture Organization (FAO), the Global Governance Group (3G) and the Gulf Cooperation Council (GCC). Previously, the Netherlands had a similar status to Spain while the rotating presidency of the Council of the European Union would also receive an invitation, but only in that capacity and not as their own state's leader (such as the Czech premiers Mirek Topolánek and Jan Fischer during the 2009 summits).
As of 2017, leaders from the following nations have been invited to the G20 summits: Azerbaijan, Benin, Brunei, Cambodia, Chad, Chile, Colombia, Egypt, Equatorial Guinea, Ethiopia, Guinea, Kazakhstan, Laos, Malawi, Malaysia, Mauritania, Myanmar, the Netherlands, New Zealand, Nigeria, Norway, the Philippines, Poland, Senegal, Singapore, Spain, Switzerland, Thailand, the United Arab Emirates, Vietnam, and Zimbabwe.
Permanent guest invitees
G20 Agenda
Financial focus
The initial G20 agenda, as conceived by US, Canadian and German policy makers, was very much focused on the sustainability of sovereign debt and global financial stability, in an inclusive format that would bring in the largest developing economies as equal partners. During a summit in November 2008, the leaders of the group pledged to contribute trillions to international finance organizations, including the World Bank and IMF, mainly for reestablishing the global financial system.
Since inception, the recurring themes covered by G20 summit participants have related in priority to global economic growth, international trade and financial market regulation.
Inclusive growth
After the adoption of the UN Sustainable Development Goals and the Paris Climate Agreement in 2015 more "issues of global significance" were added to the G20 agenda: migration, digitisation, employment, healthcare, the economic empowerment of women and development aid.
Wolfgang Schäuble, German Federal Minister of Finance, has insisted on the interconnected nature of the issues facing G20 nations, be they purely financial or developmental, and the need to reach effective, cross-cutting policy measures: "Globalization has lifted hundreds of millions out of poverty, but there is also a growing rise in frustration in some quarters [...] development, [national] security and migration are all interlinked"
Criticisms
Exclusivity of membership
Although the G20 has stated that the group "economic weight and broad membership gives it a high degree of legitimacy and influence over the management of the global economy and financial system," its legitimacy has been challenged. A 2011 report for the Danish Institute for International Studies, criticised the G20's exclusivity, highlighting in particular its under-representation of the African continent and the G20's practice of inviting observers from non-member states as a mere "concession at the margins", which does not grant the organisation representational legitimacy. With respect to the membership issue, U.S. President Barack Obama noted the difficulty of pleasing everyone: "everybody wants the smallest possible group that includes them. So, if they're the 21st largest nation in the world, they want the G21, and think it's highly unfair if they have been cut out." Others stated in 2011 that the exclusivity is not an insurmountable problem, and proposed mechanisms by which it could become more inclusive.
Norwegian perspective
In a 2010 interview with Der Spiegel, the Norwegian foreign minister Jonas Gahr Støre called the G20 "one of the greatest setbacks since World War II." Although Norway is a major developed economy and the seventh-largest contributor to UN international development programs, it is not a member of the EU, and thus is not represented in the G20 even indirectly. Norway, like the other 173 nations not among the G-20, has little or no voice within the group. Støre characterized the G20 as a "self-appointed group", arguing that it undermines the legitimacy of international organizations set up in the aftermath of World War II, such as the IMF, World Bank and United Nations:
The G20 is a self-appointed group. Its composition is determined by the major countries and powers. It may be more representative than the G7 or the G8, in which only the richest countries are represented, but it is still arbitrary. We no longer live in the 19th century, a time when the major powers met and redrew the map of the world. No one needs a new Congress of Vienna.
Norway, under the government of Erna Solberg, attended the 2017 G20 Summit in Hamburg, Germany.
Spanish position on membership
As previously stated, the Spanish government's policy is to not request official membership. Despite being hit hard by the economic crisis after 2008, Spain is still the world's fourteenth largest economy by nominal GDP (the 5th in the European Union) and sixteenth largest by purchasing power parity, clearly exceeding the numbers of several current members of the G20 such as Argentina or South Africa. In addition, since the 1990s several Spanish companies have gained multinational status, often expanding their activities in culturally close Latin America, where Spain is the second biggest foreign investor after the United States and keeps an important influence. These facts have reinforced the idea that Spain should seek permanent membership of the G20. On the other hand, Spain, which is a European country, is not a representation of Latin America, therefore some observers think another country from South America should be included as well as Argentina.
Polish aspirations
Contrary to Spain, the Polish government has repeatedly asked to join the G20. During a 2010 meeting with foreign diplomats, former Polish president Lech Kaczy?ski said:
Polish economy is according to our data an 18th world economy. The place of my country is among the members of the G20. This is a very simple postulate: firstly - it results from the size of Polish economy, secondly - it results from the fact that Poland is the biggest country in its region and the biggest country that has experienced a certain story. That story is a political and economic transformation.
(Note: as of 2016/2017, the Polish economy is not in the top 20 nominally or by PPP criteria.)
Before the 2009 G20 London summit, the Polish government expressed an interest in joining with Spain and the Netherlands and condemned a "organisational mess" in which a few European leaders speak in the name of all the EU without legitimate authorisation in cases which belong to the European Commission.
In 2012 Forbes wrote that swapping Argentina for Poland should be considered, claiming that the Polish economy was headed toward a leadership role in Europe and its membership would be more legitimate. Similar opinions have been later expressed by American magazine Foreign Policy, Wall Street Journal and by Mamta Murthi from the World Bank. In 2014 consulting company Ernst & Young published its report about optimal members for G20. After analyzing trade, institutional and investment links Poland was included as one of the optimal members.
G20 membership has been part of Poland's Law and Justice party and President Andrzej Dudas political program. In March 2017, Deputy Prime Minister of Poland Mateusz Morawiecki took part in a meeting of G20 financial ministers in Baden-Baden as the first Polish representative.
Global Governance Group (3G) response
In June 2010, Singapore's representative to the United Nations warned the G20 that its decisions would affect "all countries, big and small", and asserted that prominent non-G20 members should be included in financial reform discussions. Singapore thereafter took a leading role in organizing the Global Governance Group (3G), an informal grouping of 30 non-G20 countries (including several microstates and many Third World countries) with the aim of collectively channelling their views into the G20 process more effectively. Singapore's chairing of the 3G was cited as a rationale for inviting Singapore to the November 2010 G20 summit in South Korea, as well as the 2011, 2013, 2014, 2015, 2016 and the recently concluded 2017 summits.
Foreign Policy critiques
The American magazine Foreign Policy has published articles condemning the G20, in terms of its principal function as an alternative to the supposedly exclusive G8. It questions the actions of some of the G20 members, and advances the notion that some nations should not have membership in the first place. Furthermore, with the effects of the Great Recession still ongoing, the magazine has criticized the G20's efforts to implement reforms of the world's financial institutions, branding such efforts as failed.
Wider concerns
The G20's prominent membership gives it a strong input on global policy despite lacking any formal ability to enforce rules. There are disputes over the legitimacy of the G20, and criticisms of its organisation and the efficacy of its declarations.
The G20's transparency and accountability have been questioned by critics, who call attention to the absence of a formal charter and the fact that the most important G20 meetings are closed-door. In 2001, the economist Frances Stewart proposed an Economic Security Council within the United Nations as an alternative to the G20. In such a council, members would be elected by the General Assembly based on their importance to the world economy, and the contribution they are willing to provide to world economic development.
The cost and extent of summit-related security is often a contentious issue in the hosting country, and G20 summits have attracted protesters from a variety of backgrounds, including information activists, opponents of fractional-reserve banking and anti-capitalists. In 2010, the Toronto G20 summit sparked mass protests and rioting, leading to the largest mass arrest in Canada's history.
See also
- Big Four (Western Europe)
- Pacific Alliance
- Emerging power
- Group of Ten (economics)
- Group of Eight or G8
- Group of Seven or G7
- BRICS
- MIKTA
- Great power
- Middle power
- Regional power
- Global governance
- List of countries by GDP (nominal)
- List of countries by GDP (PPP)
- List of country groupings
- List of multilateral free-trade agreements
Notes
References
Footnotes
Bibliography
Further reading
External links
- Official website
- G20 website of the OECD
- G20 Information Centre from the University of Toronto
- A Guide To Committees, Groups, And Clubs from the International Monetary Fund
- G20 Special Report from The Guardian
- "G20 Special Report". Inter Press Service.
- The G20's role in the post-crisis world by FRIDE
- The Group of Twenty--A History, 2007
- Economics for Everyone: G20 - Gearing for Growth
Source of the article : Wikipedia
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