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What Is the Group of 20?

By , About.com Guide

G-20

G-20

(Photo: Getty Images)

What Is the G-20?:

The G-20 was formed in 1999 to give developing countries a more powerful voice in forming the global economy. Together these countries represent two-thirds of the world's people, and 85% of the its economy. The meetings started as an informal get-together of finance ministers and central bankers.

During the 2008 financial crisis, the first ever G-20 summit was held on November 16-17 in Washington, DC. The leaders of the G-20 countries agreed to regulate hedge funds and debt-rating companies such as Standard & Poor's. They also sought to strengthen standards for accounting and derivatives. Insufficient regulations and standards were blamed for the crisis that turned into a global recession. For more, see U.S. Resists G-20 Summit Call for Global Financial Regulation.

The G-20 finance ministers and central bank governors continue to meet twice a year, usually in coordination with meetings of the International Monetary Fund, the World Bank, and the G-20 summits themselves. (Source: University of Toronto, Munk School of Global Affairs, G-20 Information Centre)

Significant G-20 Summit Meetings:

2012 Meeting:

In June 18-19, 2012, the G-20 meeting was held in Los Cabos, Mexico. It focused on the eurozone debt crisis. The G-20 leaders pressured German Chancellor Angela Merkel to work with other European Union leaders to develop a more sustainable Grand Plan to resolve the Greece debt crisis. Germany does not want to continue to bail out Greece without continued austerity programs. That's because German taxpayers will ultimately face higher costs to fund the bailout, and Germany itself is already highly indebted.

In return for continued bailout funds, Germany would like a fiscal union to support the EU's monetary union. This means EU members would give up political control of their budgets to an EU-wide approval process. This is necessary before she would support Euro-wide bonds. (Source: Reuters, G-20 to Press Europe for Lasting Crisis Fix, June 18, 2012)

G-20 Member Nations:

Its members include:
  • The eight leading industrialized nations - U.S., Japan, Germany, UK, France, Italy, Canada and Russia. This group of countries also meets on their own, and are known as the G-8).
  • Eleven emerging market and smaller industrialized countries: Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Saudi Arabia, South Africa, South Korea, Turkey, plus the EU.

Why Is the G-20 Important?:

The growth of Brazil, Russia, India and China (the BRIC countries) has driven the growth of the global economy. The G-8 countries grow slower. Therefore, the BRIC countries are critical for ensuring continued global economic prosperity.

In the past, the leaders of the G-8 could meet and decide on global economic issues without much interference from the BRIC countries. However, these countries have become more important in providing the needs of the G-8 countries: Russia provides most of the natural gas to Europe, China provides much of the manufacturing for the U.S., and India provides high tech services.

G-20 Protests:

G-20 meetings are usually the site of protests. Protesters say the G-20 leaders focus on economic and financial interests and globalization. During the 2010 meeting in Toronto Canada, the protesters wanted the G-20 leaders to focus on these issues:
  • Poverty - The Ontario Coalition Against Poverty (OCAP) leader, John Clarke, said “The whole process of putting together this grouping has been about impoverishing people, and benefiting the richest members of society.” Protesters were against the G-20's focus on fiscal responsibility and austerity at the cost of social programs. They also were opposed to the $1 billion cost of the meeting itself, which was borne by Canadian taxpayers.
  • Climate Change - Protesters wanted the G-20 to refocus on global warming as a priority.
  • Gender Equality - G-20 countries need to pay more attention to rights for homosexuals and provide funding for family planning, including abortions.
  • Immigration - Protesters sought more open borders for immigrants fleeing "humanitarian and climate crisis. (Source: Alixandra Gould, The Faster Times, "What the G-20 Protests Are Really About", June 27, 2010)
Article updated June 18, 2012

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