G-20 major economies

The Group of Twenty (also known as the G-20 or G20) is an international forum for the governments and central bank governors from 20 major economies. The members, shown highlighted on the map at right, include 19 individual countriesâ€"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 Statesâ€"along with the European Union (EU). The EU is represented by the European Commission and by the European Central Bank.

The G-20 was founded in 1999 with the aim of studying, reviewing, and promoting high-level discussion of policy issues pertaining to the promotion of international financial stability. It seeks to address issues that go beyond the responsibilities of any one organization. Collectively, the G-20 economies account for around 85% of the gross world product (GWP), 80% of world trade (or, if excluding EU intra-trade, 75%), and two-thirds of the world population. The G-20 heads of government or heads of state have periodically conferred at summits since their initial meeting in 2008.

With the G-20 growing in stature after the 2008 Washington summit, its leaders announced on 25 September 2009, that the group would replace the G8 as the main economic council of wealthy nations. Since its inception, the G-20's membership policies have been criticized by numerous intellectuals, and its summits have been a focus for major protests by anti-globalists, nationalists and others.

The heads of the G-20 nations met semi-annually at G-20 summits between 2008 and 2011. Since the November 2011 Cannes summit, all G-20 summits have been held annually. In December 2014, Turkey took over the presidency of the G-20 from Australia, and will host the group's 2015 summit in Antalya.

History

The G-20 is the latest in a series of post-World War II initiatives aimed at international coordination of economic policy, which include institutions such as the "Bretton Woods twins", the International Monetary Fund and the World Bank, and what is now the World Trade Organization. The G-20 superseded the G33 (which had itself superseded the G22), and was foreshadowed at the Cologne Summit of the G7 in June 1999, but was only formally established at the G7 Finance Ministers' meeting on 26 September 1999. The inaugural meeting took place on 15â€"16 December 1999 in Berlin. Canadian finance minister Paul Martin was chosen to be the first chairman and German finance minister Hans Eichel hosted the inaugural meeting.

According to researchers at the Brookings Institution, the group was founded primarily at the initiative of Eichel, who was also concurrently chair of the G7. However, some sources identify the G-20 as a joint creation of Germany and the United States. According to University of Toronto professor John Kirton, the membership of the G-20 was decided by Eichel's deputy Caio Koch-Weser and then US Treasury Secretary Larry Summers' deputy Timothy Geithner. In Kirton's book G20 Governance for a Globalised World, he claims that:

"Geithner and Koch-Weser went down the list of countries saying, Canada in, Spain out, South Africa in, Nigeria and Egypt out, and so on; they sent their list to the other G7 finance ministries; and the invitations to the first meeting went out."

Though the G-20's primary focus is global economic governance, the themes of its summits vary from year to year. For example, the theme of the 2006 G-20 meeting was "Building and Sustaining Prosperity". The issues discussed included domestic reforms to achieve "sustained growth", global energy and resource commodity markets, reform of the World Bank and IMF, and the impact of demographic changes due to an aging world population. Trevor A. Manuel, the South African Minister of Finance, was the chairperson of the G-20 when South Africa hosted the Secretariat in 2007. Guido Mantega, Brazil's Minister of Finance, was the chairperson of the G-20 in 2008; Brazil proposed dialogue on competition in financial markets, clean energy and economic development and fiscal elements of growth and development. In a statement following a meeting of G7 finance ministers on 11 October 2008, US President George W. Bush stated that the next meeting of the G-20 would be important in finding solutions to the burgeoning economic crisis of 2008. An initiative by French President Nicolas Sarkozy and British Prime Minister Gordon Brown led to a special meeting of the G-20, a G-20 Leaders Summit on Financial Markets and the World Economy, on 15 November 2008. Spain and the Netherlands were included in the summit by French invitation.

Despite lacking any formal ability to enforce rules, the G-20's prominent membership gives it a strong input on global policy. However, there remain disputes over the legitimacy of the G-20, and criticisms of its organisation and the efficacy of its declarations.

Summits

The G-20 Summit was created as a response both to the financial crisis of 2007â€"2010 and to a growing recognition that key emerging countries were not adequately included in the core of global economic discussion and governance. The G-20 Summits of heads of state or government were held in addition to the G-20 Meetings of Finance Ministers and Central Bank Governors, who continued to meet to prepare the leaders' summit and implement their decisions. After the 2008 debut summit in Washington, D.C., G-20 leaders met twice a year in London and Pittsburgh in 2009, Toronto and Seoul in 2010.

Since 2011, when France chaired and hosted the G-20, the summits have been held only once a year. Russia chaired and hosted the summit in 2013; while the summit was held in Australia in 2014, with Turkey hosting it in 2015.

A number of other ministerial-level G20 meetings have been held since 2010. Agriculture ministerial meetings were conducted in 2011 and 2012; meetings of foreign ministers were held in 2012 and 2013; trade ministers met in 2012 and 2014 and employment ministerial meetings have taken place annually since 2010.

Australian Foreign Minister Julie Bishop, as host of the then-upcoming G20 meeting, proposed on 19 March 2014 to ban Russia over its role in the 2014 Crimean crisis. She was reminded on 24 March by a communique of the BRICS foreign ministers that "The Ministers noted with concern, the recent media statement on the forthcoming G20 Summit to be held in Brisbane in November 2014. The custodianship of the G20 belongs to all Member States equally and no one Member State can unilaterally determine its nature and character."

G-20 leaders' chair rotation

To decide which member nation gets to chair the G-20 leaders' meeting for a given year, all 19 sovereign nations are assigned to one of five different groupings. Each group holds a maximum of four nations. This system has been in place since 2010, when South Korea, which is in Group 5, held the G-20 chair. Australia, the host of the 2014 G-20 summit, is in Group 1. Turkey, which will host the 2015 summit, is in Group 2. The table below lists the nations' groupings:

Organization

The G-20 operates without a permanent secretariat or staff. The group's chair rotates annually among the members and is selected from a different regional grouping of countries. The chair is part of a revolving three-member management group of past, present and future chairs, referred to as the "Troika". 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. The current chair of the G-20 is Turkey; the chair was handed over from Australia after the 2014 G-20 summit. Turkey will host the 2015 summit in Antalya, while China will preside over the 2016 summit.

Proposed permanent secretariat

In 2010, President of France Nicolas Sarkozy proposed the establishment of a permanent G-20 secretariat, similar to the United Nations. Seoul and Paris were suggested as possible locations for its headquarters. Brazil and China supported the establishment of a secretariat, while Italy and Japan expressed opposition to the proposal. South Korea proposed a "cyber secretariat" as an alternative.

List of members

Currently, there are 20 members of the group. These include, at the leaders summits, the leaders of 19 countries and of the European Union, and, at the ministerial-level meetings, the finance ministers and central bank governors of 19 countries and of the European Union. In addition each year, the G20â€™s guests include Spain; the Chair of ASEAN; two African countries (the chair of the African Union and a representative of the New Partnership for Africaâ€™s Development) and a country (sometimes more than one) invited by the presidency, usually from its own region. The first of the tables below lists the member entities and their heads of government, finance ministers and central bank governors. The second table lists relevant statistics such as population and GDP figures for each member, as well as detailing memberships of other international organisations, such as the G7 and BRICS. Total GDP figures are given in millions of US dollars.

Leaders

Member country data

In addition to these 20 members, the chief executive officers of several other international forums and institutions participate in meetings of the G-20. These include the managing director and Chairman of the International Monetary Fund, the President of the World Bank, the International Monetary and Financial Committee and the Chairman of the Development Assistance Committee.

The G-20's membership does not reflect exactly the 19 largest national economies of the world in any given year. The organization states:

All 19 member nations are among the top 33 economies as measured in GDP at nominal prices in a list published by the International Monetary Fund (IMF) for 2014. Not represented by membership in the G-20 are Switzerland (ranked 20th by the IMF), Nigeria (21), Taiwan (26), Norway (27), the United Arab Emirates (29), Iran (30), Colombia (31), and Thailand (32), even though they rank higher than some members. Spain (14), the Netherlands (17), Sweden (22), Poland (23), Belgium (25), and Austria (28) are included only as part of the EU, and not independently.

When the countries' GDP is measured at purchasing power parity (PPP) rates, all 19 members are among the top 29 in the world for the year of 2014, according to the IMF. Iran (18), Taiwan (20), Nigeria (21), Thailand (22), Egypt (25), Pakistan (26), and Malaysia (28) are not G-20 members, while Spain (16), Poland (23) and the Netherlands (27) are only included in the EU slot. However, in a list of average GDP, calculated for the years since the group's creation (1999â€"2008) at both nominal and PPP rates, only Spain, the Netherlands, Nigeria, Poland, Taiwan, Iran and Thailand appear above any G-20 member in both lists simultaneously.

Spain, being the 14th largest economy in the world and 5th in the European Union in terms of nominal GDP, is a "permanent guest" of the organization, although the Spanish government's policy is to not request official membership. As such, a Spanish delegation has been invited to, and has attended, every G-20 heads of state summit since the G-20's inception.

Role of Asian countries

A 2011 report released by the Asian Development Bank (ADB) predicted that large Asian economies such as China and India would play a more important role in global economic governance in the future. The report claimed that the rise of emerging market economies heralded a new world order, in which the G-20 would become the global economic steering committee. The ADB furthermore noted that Asian countries had led the global recovery following the late-2000s recession. It predicted that the region would have a greater presence on the global stage, shaping the G-20's agenda for balanced and sustainable growth through strengthening intraregional trade and stimulating domestic demand.

Invitees

Typically, several participants that are not permanent members of the G20 are extended invitations to participate in the summits. Each year, the Chair of the Association of Southeast Asian Nations; the Chair of the African Union and a representative of the New Partnership for Africa's Development are invited in their capacities as leaders of their organisations and as heads of government of their home states. Additionally, the leaders of the Financial Stability Board, the International Labour Organization, the International Monetary Fund, the Organisation for Economic Co-operation and Development, the United Nations, the World Bank Group and the World Trade Organization are invited and participate in pre-summit planning within the policy purview of their respective organisation. Spain is a permanent non-member invitee.

Other invitees are chosen by the host country, usually one or two countries from its own region. For example, South Korea invited Singapore. International organisations which have been invited in the past include the Asia-Pacific Economic Cooperation (APEC), the Basel Committee on Banking Supervision (BCBS), the Commonwealth of Independent States (CIS), the Eurasian Economic Community (EAEC), the European Central Bank (ECB), the Food and Agriculture Organization (FAO), the Global Governance Group (3G) and the Gulf Cooperation Council (GCC). Previously, the Netherlands had a similar status to Spain while the rotating presidency of the Council of the European Union would also receive an invitation, but only in that capacity and not as their own state's leader (such as the Czech premiers Mirek TopolÃ¡nek and Jan Fischer during the 2009 summits).

As of 2014, leaders from the following nations have been invited to the G20 summits: Azerbaijan, Benin, Brunei, Cambodia, Chile, Colombia, Equatorial Guinea, Ethiopia, Kazakhstan, Malawi, Malaysia, Mauritania, Myanmar, the Netherlands, New Zealand, Nigeria, Senegal, Singapore, Spain, Switzerland, Thailand, the United Arab Emirates, Vietnam, and Zimbabwe.

Permanent guest invitations

Criticisms

Exclusivity of membership

Although the G-20 has stated that the group'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," its legitimacy has been challenged. With respect to the membership issue, U.S. President Barack Obama has noted the difficulty of pleasing everyone: "everybody wants the smallest possible group that includes them. So, if they're the 21st largest nation in the world, they want the G-21, and think it's highly unfair if they have been cut out." A 2011 report for the Danish Institute for International Studies, entitled "The G-20 and Beyond: Towards Effective Global Economic Governance", criticised the G-20's exclusivity, highlighting in particular its under-representation of the African continent. Moreover, the report stated that the G-20's practice of inviting observers from non-member states is a mere "concession at the margins", and does not grant the organisation representational legitimacy. However, Global Policy stated in 2011 that the G-20's exclusivity is not an insurmountable problem, and proposed mechanisms by which it could become more inclusive.

Norwegian perspective

In a 2010 interview with Der Spiegel, Norwegian Foreign Minister Jonas Gahr StÃ¸re called the G-20 "one of the greatest setbacks since World War II." Although Norway is a major developed economy and the seventh-largest contributor to UN international development programs, it is not a member of the EU, and thus is not represented in the G-20 even indirectly. Norway, like the other 173 nations not among the G-20, has little or no voice within the group. StÃ¸re characterized the G-20 as a "self-appointed group", arguing that it undermines the legitimacy of international organizations set up in the aftermath of World War II, such as the IMF, World Bank and United Nations:

The G-20 is a self-appointed group. Its composition is determined by the major countries and powers. It may be more representative than the G-7 or the G-8, in which only the richest countries are represented, but it is still arbitrary. We no longer live in the 19th century, a time when the major powers met and redrew the map of the world. No one needs a new Congress of Vienna.

Polish aspirations

During a 2010 meeting with foreign diplomats former Polish president Lech KaczyÅ„ski expressed an opinion that his country should be included in G-20 group:

"Polish economy is according to our data an 18th world economy. The place of my country is among the members of the G-20. This is a very simple postulate: firstly - it results from the size of Polish economy, secondly - it results from the fact that Poland is the biggest country in its region and the biggest country that has experienced a certain story. That story is a political and economic transformation.

Before the G20 summit in London, Polish government expressed an interest in joining just as Spain or the Netherlands and condemned a 'organisational mess' in which a few European leaders speaks in the name of all the EU without any legitimate authorisation in cases that belongs to the European Commission. In 2012 Tim Fergusson wrote in Forbes that a swap of Argentina for Poland should be actively considered. In his article he claims that Polish economy is headed toward a leadership role in Europe and as a result its membership would be more legitimate. Similar opinions have been later expressed by an American magazine Foreign Policy, Wall Street Journal and also by Mamta Murthi from the World Bank. In 2014 consulting company Ernst & Young published its report about optimal members for G-20. After analyzing trade, institutional and investment links Poland was included as one of the optimal members. Membership in G-20 is also part of a political program of the Law and Justice party and it's presidential candidate for 2015 elections Andrzej Duda.

Global Governance Group (3G) response

In June 2010, Singapore's representative to the United Nations warned the G-20 that its decisions would affect "all countries, big and small", and asserted that prominent non-G-20 members should be included in financial reform discussions. Singapore thereafter took a leading role in organizing the Global Governance Group (3G), an informal grouping of 28 non-G-20 countries (including several micronations and many Third World countries) with the aim of collectively channelling their views into the G-20 process more effectively. Singapore's chairing of the 3G was cited as a rationale for inviting Singapore to the November 2010 G-20 summit in South Korea.

Foreign Policy critiques

The American magazine Foreign Policy has published articles condemning the G-20, in terms of its principal function as an alternative to the supposedly exclusive G8. It questions the actions of some of the G-20 members, and advances the notion that some nations should not have membership in the first place. For example, it has suggested that Argentina should be formally replaced in the group by Poland or Spain. Furthermore, with the effects of the Great Recession still ongoing, the magazine has criticized the G-20's efforts to implement reforms of the world's financial institutions, branding such efforts as failed.

On 14 June 2012, an essay published by the National Taxpayers Union was forwarded to Foreign Policy, espousing a critical view of the application of G-20 membership. The essay's authors, Alex Brill and James K. Glassman, used a numerical table with seven criteria to conclude that Indonesia, Argentina, Russia and Mexico do not qualify for G-20 membership, and that Switzerland, Singapore, Norway and Malaysia had overtaken some of the current members. However, the gap between current members Mexico and Russia and the lower-ranked entries in the authors' list (Malaysia and Saudi Arabia) was only slight. Thus, it was concluded that there is no obvious group of twenty nations that should be included in the G20, and that fair and transparent metrics are essential, as they justify the difficult decisions that will be required in order to differentiate among similarly situated countries.

Wider concerns

The G-20's transparency and accountability have been questioned by critics, who call attention to the absence of a formal charter and the fact that the most important G-20 meetings are closed-door. In 2001, the economist Frances Stewart proposed an Economic Security Council within the United Nations as an alternative to the G-20. In such a council, members would be elected by the General Assembly based on their importance in the world economy, and the contribution they are willing to provide to world economic development.

The cost and extent of summit-related security is often a contentious issue in the hosting country, and G-20 summits have attracted protesters from a variety of backgrounds, including information activists, nationalists, and opponents of Fractional Reserve Banking and crony capitalism. In 2010, the Toronto G-20 summit sparked mass protests and rioting, leading to the largest mass arrest in Canadian history.

References

External links

Official G-20 website
G-20 website of the OECD
G-20 Information Centre from the University of Toronto
A Guide To Committees, Groups, And Clubs from the International Monetary Fund
G-20 Special Report from The Guardian
IPS News â€" G-20 Special Report
The G-20's role in the post-crisis world by FRIDE
The Group of Twentyâ€"A History, 2007
Economics for Everyone: G20 â€" Gearing for Growth

G-20 major economies

Monday, April 27, 2015