The Group of Twenty (G-20) Finance Ministers and Central Bank Governors was established in 1999 to bring together systemically important industrialized and developing economies to discuss key issues in the global economy. The inaugural meeting of the G-20 took place in Berlin, on December 15–16, 1999, hosted by German and Canadian finance ministers.
The G-20 is an informal forum that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability. By contributing to the strengthening of the international financial architecture and providing opportunities for dialogue on national policies, international co-operation, and international financial institutions, the G-20 helps to support growth and development across the globe.
The G-20 was created as a response both to the financial crises of the late 1990s and to a growing recognition that key emerging-market countries were not adequately included in the core of global economic discussion and governance.
Prior to the G-20 creation, similar groupings to promote dialogue and analysis had been established at the initiative of the G-7. The G-22 met at Washington D.C. in April and October 1998. Its aim was to involve non-G-7 countries in the resolution of global aspects of the financial crisis then affecting emerging-market countries. Two subsequent meetings comprising a larger group of participants (G-33) held in March and April 1999 discussed reforms of the global economy and the international financial system. The proposals made by the G-22 and the G-33 to reduce the world economy's susceptibility to crises showed the potential benefits of a regular international consultative forum embracing the emerging-market countries. Such a regular dialogue with a constant set of partners was institutionalized by the creation of the G-20 in 1999.
The members of the G-20 are the finance ministers and central bank governors of 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States of America. The European Union is also a member, represented by the rotating Council presidency and the European Central Bank. To ensure global economic fora and institutions work together, the Managing Director of the International Monetary Fund (IMF) and the President of the World Bank, plus the chairs of the International Monetary and Financial Committee and Development Committee of the IMF and World Bank, also participate in G-20 meetings on an ex-officio basis.
The G-20 thus brings together important industrial and emerging-market countries from all regions of the world. Together, member countries represent around 90 per cent of global gross national product, 80 per cent of world trade (including EU intra-trade) as well as two-thirds of the world's population. The G-20's economic weight and broad membership gives it a high degree of legitimacy and influence over the management of the global economy and financial system.
The G-20 has progressed a range of issues since 1999, including agreement about policies for growth, reducing abuse of the financial system, dealing with financial crises, and combating terrorist financing.
At the 2004 meeting in Berlin, members agreed to the G-20 Accord for Sustained Growth (the Accord) and the G-20 Reform Agenda. The Accord lays out the guidelines that members' experience suggests can foster sustainable economic growth and development, both nationally and globally. The Reform Agenda sets out the steps being taken by each country to implement the Accord. The G-20 countries have committed to reviewing progress in implementing the Accord, and regular publication of an updated Reform Agenda.
The G-20 also aims to foster the adoption of internationally recognized standards through the example set by its members in areas such as the transparency of fiscal policy and combating money laundering and the financing of terrorism.
In 2004, G-20 countries committed to new higher standards of transparency and exchange of information on tax matters. This aims to combat abuses of the financial system and illicit activities including tax evasion.
The G-20 has also aimed to develop a common view among members on issues related to further development of the global economic and financial system. This includes providing political momentum for reform of, and strategic direction to, key international economic and financial institutions, like the IMF and World Bank. It also provides support for clear analytic work on key issues, such as demographic change, progress toward regional integration, and understanding international markets, including markets in goods and services, finance, and energy and resource commodities.
Unlike international institutions such as the Organization for Economic Co-operation and Development (OECD), IMF or World Bank, the G-20 (like the G-7) has no permanent staff of its own. The G-20 chair rotates between members, and is selected from a different regional grouping of countries each year.
In 2008 the G-20 chair is Brazil, and in 2009 it will be the United Kingdom. The chair is part of a revolving three-member management Troika of past, present and future chairs. 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 G-20's work and management across host years.
6. Meetings and activities
The G-20 finance ministers and central bank governors meet once a year. The last meeting of ministers and governors was held in Cape Town, South Africa on 17–18 November 2007. This year's meeting will be held in S緌 Paulo, Brazil on 8–9 November 2008.
The ministers' and governors' meeting is preceded by two deputies' meetings and extensive technical work. This work, which takes the form of workshops, reports and case studies on specific subjects, aims to provide ministers and governors with contemporary analysis and insights, to better inform their consideration of policy challenges and options.
7. Interaction with other international organizations
The G-20 cooperates closely with various other major international organizations and fora, as the potential to develop common positions on complex issues among G-20 members can add political momentum to decision-making in other bodies.
The participation of the President of the World Bank, the Managing Director of the IMF and the chairs of the International Monetary and Financial Committee and the Development Committee in the G-20 meetings ensures that the G-20 process is well integrated with the activities of the Bretton Woods Institutions. The G-20 also works with, and encourages, other international groups and organizations, such as the Financial Stability Forum, in progressing international and domestic economic policy reforms. In addition, experts from private-sector institutions are invited to G-20 meetings on an ad hoc basis in order to exploit synergies in analyzing selected topics and avoid overlap.
8. External communication
The country currently chairing the G-20 posts details of the group's meetings and work program on a dedicated website. Although participation in the meetings is reserved for members, the public is informed about what was discussed and agreed immediately after the meeting of ministers and governors has ended.
After each meeting of ministers and governors, the G-20 publishes a communiquéwhich records the agreements reached and measures outlined. Material on the forward work program is also made public.