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G-20 : World's Major Economies

What is G-20?


The G-20 is a global conference of the world's largest economies. Its members account for almost 80% of global GDP, 75% of global trade, and 60% of the global population.





Origins and Evolution of the G-20


The G-20 was founded in September 1999 in the aftermath of the East Asian Crisis of 1997. It was formed as a group of Finance Ministers and Central Bank Governors from the 19 major nations and the EU. 

Better Representation of Emerging Economies: Despite their growing influence in the international financial system, several of the world's most important emerging economies are not given adequate opportunities to engage in discussions and decision-making on global economic issues. As a result, the G7, a group of seven major industrial countries, founded the conference to improve discussion and collaboration with emerging and developing economies.



Summit Level Meeting: It is now the most important international forum for cooperation on the world's most critical financial and economic concerns. Since 1999, the forum has met annually, and in 2008 the G-20 was elevated to the summit level to deal with the global financial and economic crisis of 2008. This Annual Summit is attended by the Heads of State and Government of the member countries.


Since then, Finance Ministers and Central Bank Governors have met once a year. The G-20 Finance Ministers and Central Bank Governors met in India in 2002.


What are the objectives of G-20?

The G-20 is working together to achieve its objectives, which include policy coordination among members to assure global economic stability and growth, financial legislation to reduce risks and prevent future financial crises, and the creation of a new international financial infrastructure.


The G-20's key concern right now is to ensure that international policy coordination is maintained and enhanced in a coordinated and business-cycle-friendly manner.





Who are the members of the G-20?

Argentina, Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the United States are among its 20 members.


Spain has also been invited as a permanent guest to the 2021 Summit



What is the importance of G-20?

In recent years, the Group of Twenty (G-20) has come to prominence as the primary forum for its members to engage in international economic cooperation and decision-making. It is now regarded as a global decision-making platform on major global issues critical to long-term growth and stability.


The following are the important factors that have contributed to its global prominence:


  • The G-20 is a one-of-a-kind gathering in that it brings both developed and emerging economies.

  • The G-20 is in charge of 90% of the global economy and two-thirds of the worldwide population.

  • The summit is open to non-members in addition to its vast membership. The presidents of the African Union, ASEAN, APEC, and other regional conferences are all invited.

Because of its diverse membership, the G-20 works closely with international organisations like the International Monetary Fund (IMF), World Bank (WB), Financial Stability Board, Organisation for Economic Cooperation and Development (OECD), World Trade Organization (WTO), United Nations, UNCTAD, and International Labour Organization (ILO) (ILO).


The G-20 is working to enhance the financial system and increase financial inclusion in order to improve international financial architecture in an interconnected world, improve food security, and control commodity price volatility, as well as progress the fight against climate change.

Working of G-20


The G-20 has no permanent secretariat or personnel. During the past five years of its existence, the G-20 has developed a workable structure and methodology.


To grasp the G-20's inner workings, we must first grasp the

  1. Troika

  2. Sherpa Tracks, and

  3. Finance Tracks.


Chair: Every year, a new geographical grouping of countries is chosen for the chair, which rotates among the members. As a result, 19 countries have been classified into the following five regional groups:


Group Number

Members

1

Australia, Canada, Saudi Arabia, and the United States of America

2

India, Russia, South Africa, and Turkey.

3

Argentina, Brazil, and Mexico.

4

France, Germany, Italy, and the United Kingdom

5

China, Indonesia, Japan, and South Korea.


A maximum of four countries can be included in each group. Each year, one country from each group is chosen to sit in the chair, which is rotated among the groupings.


Troika is a three-person management group made up of previous, current, and future chairs that meet on a rotating basis. The Troika now consists of Saudi Arabia, Italy and Indonesia.


The Sherpa and Finance tracks, which prepare and follow up on the challenges and pledges made during the summits, are in charge of the G-20 Summit preparations.


The 'Sherpas Track' is concerned with non-economic and financial issues like as development, anti-corruption, and food security, as well as internal issues such as G-20 process procedural requirements.

The Sherpas are always busy with important planning, negotiation, and execution tasks. Every G-20 member country has appointed a Sherpa to lead the Sherpas channel's development agenda negotiations. The Sherpas have been tasked by their leaders with negotiating the Summit's agreements on their behalf.


The 'Finance Track,' which consists of Finance Ministers and Central Bank Governors, as well as their deputies, focuses on economic and financial issues.


Many Ministerial Meetings, such as the Joint Meeting of Finance and Development Ministers and the Ministerial Meetings on Labor, Agriculture, and Tourism, help to shape thematic agendas.





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