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. The next meeting is November 15 -16 November in Brisbane, Queensland, Australia. It's expected that 4,000 delegates and 3,000 members of the media will attend. (Source: University of Toronto, Munk School of Global Affairs, G-20 Information Centre)
2013 Summit Meeting:
The September 5-6 meeting was hosted by President Vladimir Putin in St. Petersburg, Russia. It was unofficially dominated by discussions over how to respond to Syria's chemical weapons attack. President Obama sought support for a U.S. strike, while others argued for economic sanctions. Russia supports the Syrian government with arms and trade, while China is concerned about an increase in oil prices. France, Turkey and Saudi Arabia support an air strike.
Officially, the leaders focused on spurring global economic growth. The BRIC countries sought G-20 action to reinvigorate their economies, which have been pummeled by a withdrawal of foreign direct investment. (Source: USA Today, G-20 Summit)
Previous Summit Meetings:
- June 18-19, 2012 - Los Cabos: 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 did not want to continue to bail out Greece without continued austerity programs. That's because German taxpayers ultimately face higher costs to fund the bailout, and Germany itself is already highly indebted. In return for continued bailout funds, Germany pushed for a fiscal union to support the EU's monetary union. This meant EU members would give up political control of their budgets to an EU-wide approval process. This was necessary before she would support Euro-wide bonds. (Source: Reuters, G-20 to Press Europe for Lasting Crisis Fix, June 18, 2012)
- November 2-4, 2011 - Cannes: The summit was dominated by discussions about addressing the Greek debt crisis. They also agreed on plans to create jobs. For more, see EU Satisfied with Achievements of G20 Summit
- November 11-12, 2010 - Seoul: In advance of the G-20 meeting, Finance Ministers pledged to stop the currency wars, primarily between China and the U.S., that threatens worldwide inflation in food, oil prices and other commodities. The result? Treasury Secretary Tim Geithner pledged that the U.S. would not flood the market with Treasuries, driving down the value of the dollar, while emerging markets agreed to let the forex market determine their currency values (i.e., let them rise, if necessary). So, why did this drive the dollar down, anyway, and the stock market up? First, forex traders were hoping for a more solid pledge by the U.S. and China to keep their currencies strong. They anticipate that the Federal Reserve will continue buying more Treasuries, to keep interest rates low. However, this means an expansion of the money supply, which lowers the dollar. It is a shell game that fools no one, but it is a desperate attempt by the Fed to use monetary policy to offset irresponsible fiscal policy. Forex traders sold dollars, driving its value down .66% against a basked of currencies. In response, the Dow rose one percent - a falling dollar value makes U.S. stocks cheaper to foreigners. For an example of how this works, last Wednesday a 1,000 euros could buy $1,370 in stocks. This morning, that same 1,000 euros could buy $1,405 in stocks. Here's another amazing thing - members agreed to transfer 6% of voting power in the International Montary Fund (IMF) to emerging market countries, another shift in the balance of global economic power away from the old G-7 developed countries. (Source: Reuters)
- June 26-27, 2010 - Toronto: Leaders agreed to cut their budget deficits in half by 2013, and eliminate deficits altogether three years later. For more, see G-20 Summit Focuses on Debt Reduction.
- April 1-2, 2009 - London: G-20 leaders pledged $1 trillion to the IMF and World Bank to help emerging market countries ward off the effects of the recession. For more see G-20 Global Plan Will Shorten Recession.
- September 24-25, 2009 - Pittsburgh: Leaders established a Financial Stability Board that would implement financial reforms. They agreed to increase banks' capital requirements, regulate hedge funds, tax havens and executive pay. For more, see G-20 Summit Start of New World Order?
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 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 September 6, 2013