Monday, April 6, 2009

Just What is the G-20 and What Do They Do?

The G-20 (more formally, the Group of Twenty Finance Ministers and Central Bank Governors) is a group from 20 economies: 19 of the world's largest national economies, plus the European Union (EU).

The G-20 is a forum for cooperation and consultation on matters pertaining to the international financial system. It studies, reviews, and promotes discussion among key industrial and emerging market countries of policy issues pertaining to the promotion of international financial stability, and seeks to address issues that go beyond the responsibilities of any one organization.

Group of Twenty Finance Ministers and Central Bank Governors

Saudi Arabia
South Africa
South Korea
United Kingdom
United States
Plus the European Union

Also attending :
The International Monetary Fund (IMF) which is an international organization that oversees the global financial system by following the macroeconomic policies of its member countries, in particular those with an impact on exchange rates and the balance of payments. It is an organization formed to stabilize international exchange rates and facilitate development. It also offers financial and technical assistance to its members, making it an international lender of last resort. Its headquarters are located in Washington, D.C., USA.

Also, The World Bank which is an international financial institution that provides financial and technical assistance to developing countries for development programs (e.g. bridges, roads, schools, etc.) with the stated goal of reducing poverty

The G-20 accounts for 60% of the world's population, 70% of its farmers and 26% of world’s agricultural exports.

Its origins date back to June 2003, when foreign ministers from Brazil, India and South Africa signed a declaration known as the Brasilia Declaration in which they stated that ‘major trading partners are still moved by protectionist concerns in their countries’ less competitive sectors and emphasized how important it is that the results of the current round of trade negotiations provide especially for the reversal of protectionist policies and trade-distorting practices.

Nonetheless, the ‘official’ appearance of the G-20 occurred as a response to a text released on 13 August 2003 by the European Communities (EC) and the United States with a common proposal on agriculture for the Cancún Ministerial. On 20 August 2003 a document signed by twenty countries and re-issued as a Cancún Ministerial document on 4 September proposed an alternative framework to that of the EC and the United States on agriculture for the Cancún Meeting. This document marked the establishment of the G-20. The original group of signatories of the 20 August 2003 document went through many changes, being known as such different names as the G-21 or the G-22. The title G-20 was finally chosen, in honor of the date of the group's establishment.

Since its creation, the group has had a fluctuating membership. Previous members have included: Colombia, Costa Rica, Ecuador, El Salvador, Peru, and Turkey. The core leadership of the G-20, known as the G4 bloc, consists of Brazil, China, India, and South Africa.

The G-20 operates without a permanent secretariat or staff. The incumbent chair establishes a temporary secretariat for the duration of its term, which coordinates the group's work and organizes its meetings.

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 has progressed a range of issues including agreement about policies for growth, reducing abuse of the financial system, dealing with financial crises and combating terrorist financing. 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.

I am writing this article because I did not know much about the G-20 and decided to try to learn more. The information above came from various sites on the Internet and I cannot confirm the accuracy.

In London, at the G-20 summit, it was reported that the world's largest economies pledged $1.1 trillion to help boost capital to the International Monetary Fund. This in the same week when the stock market showed glimmers of hope.

It was also reported that developed countries differ in how they think their economies can be revived, while developing countries want an increased role in the decision-making process. I came across a website that I found interesting. Click ahead to see where each of the G20 members stand.

Are they effective? I am not sure. What I do know is, that anytime a diverse group of people sit together around a table in an effort of communication some other things usually start to happen. These include an increased education and understanding of each other’s cultures and history. For this reason alone I am glad that they held the conference.

1 comment:

ajbrownh said...

Thank you Lesley for explaining a little more about the G-20. I understood them to be top financiers.