Why the G20?
The G20 was created in December 1999 in response to the financial crises affecting the emerging countries in the late 1990s. The initial aim was to have the finance ministers and
central bank governors of the industrialised and emerging countries meet once a year to facilitate international economic policy cooperation.
Confronted with the deepest economic and financial crisis since World War II, the G20 went into high gear in late 2008 at the initiative of France, the holder of the rotating EU
presidency at the time. What emerged was an economic steering body that brought together the world's major political leaders at the highest level. At the pioneering Washington
Summit in November 2008, heads of States and governments agreed on an extraordinary plan of action to prevent the financial system and the global economy from collapsing.
Since then, the G20 has convened on a regular basis: in London in April 2009, Pittsburgh in September 2009, Toronto in June 2010, and Seoul in November 2010. The G20 has become the
premier forum for economic and financial cooperation, able to provide world growth with more stable, sustainable foundations.
To learn more about G20, please click on the videoplayer below :
Who are its members?
Together, the G20 countries
account for 85 percent of global output and two thirds of the world's population.
Its members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the
United Kingdom, the United States and the European Union.
Every year, the G20 members are entitled to invite a limited number of other countries and regional organisations to their summits.
In carrying out its work, the G20 draws on the technical expertise of international organisations, chiefly the International Monetary Fund (IMF), the World Bank, the Organisation
for Economic Cooperation and Development (OECD), the International Labour Organisation (ILO), the World Trade Organization (WTO), the United Nations (UN) and the Financial Stability
Board (FSB).
How does the G20 work?
The G20
operates with an annually rotating chair under a relatively informal system. Each year, a member country is given responsibility for organising the summits of heads of States and
governments and ensuring that the preparatory negotiations move ahead as planned. France has the honour of taking on this weighty responsibility in 2011.
Given that the G20 primarily addresses economic issues, finance-related units play a key role in G20 negotiations. The finance ministers and central bank governors hold several
meetings a year to lay the groundwork for decision-making by the heads of States and governments.
The G20 chair can also call special thematic meetings. In 2011, France will be organising a meeting of the G20 labour and employment ministers and a meeting of the G20 agriculture
ministers.
What has the G20 accomplished?
Concerted action by the G20 lessened the
impact of the crisis on growth and employment and helped restore confidence even earlier than many analysts predicted it would.
The G20 countries took drastic steps to support the global economy. Massive, coordinated fiscal stimulus programmes were implemented; central banks injected vast amounts of
liquidity into the economy; lending by banks was stimulated; and the means available to international organisations to assist the emerging and developing countries were greatly
expanded.
But the G20 also tackled the root causes of the crisis: mounting global macro-economic imbalances and the inadequacies of financial regulation.
To reduce global imbalances, the G20 created a Framework for Strong, Sustainable and Balanced Growth (Framework) designed to
realign national policies more fully with the needs of the world economy.
The G20 further agreed on an unprecedented financial regulation plan to deal with an equally unprecedented financial crisis. The results accomplished so far have been extremely
significant (Financial regulation). The scope of financial oversight and supervision has been broadened to include
participants, financial products and risky activities and behaviour that had previously been subject to little or no control.
Last of all, the G20 has engineered a major overhaul of the international economic decision-making process, above all by promoting governance reform at the IMF and the World Bank.
It is now up to the G20 to withstand the test of the post-crisis period and prove itself able to coordinate economic policy among the leading countries, even though the current
recovery may encourage some countries to fall back into non-cooperative practices.
