What Is the Group of 20 (G-20)?

What Is the Group of 20 (G-20)?

I'm going to explain the Group of 20, or G-20, directly to you. It's a group made up of finance ministers and central bank governors from 19 of the world's largest economies, which include many developing nations, along with the European Union. Formed in 1999, the G-20 exists to promote global economic growth, international trade, and the regulation of financial markets.

Remember, the G-20 is a forum, not a legislative body, so its agreements and decisions don't carry legal weight, but they do shape countries' policies and foster global cooperation. Collectively, the G-20 economies account for more than 80% of the gross world product, 75% of world trade, and 60% of the global population. After its first leaders' summit in 2008, the G-20 leaders declared that the group would take over from the G-8 as the main economic council of nations.

Policy Focus of the Group of 20 (G-20)

Let me walk you through how the G-20 sets its agenda. It's determined by its rotating Presidencies, working with the full membership. Originally, the focus was on sovereign debt sustainability and global financial stability, and those remain core topics at summits, alongside global economic growth, international trade, and financial market regulation.

Under the current Indonesian Presidency, the G-20 emphasizes three interconnected pillars: global health architecture, digital transformation, and sustainable energy transition. The 2021 summit in Rome on October 30 and 31 covered supporting small and medium-sized enterprises and women-owned businesses, the private sector's role in fighting climate change, and sustainable development.

Looking back, the 2019 Osaka summit addressed the global economy, trade and investment, innovation, environment and energy, employment, women's empowerment, development, and wellness. In 2018, under Argentina's lead, the focus was on the future of work, infrastructure for development, and a sustainable food future, with additional talks on cryptocurrency regulation and the U.S.-China trade war.

The Group of 20 (G-20) vs. the Group of Seven (G-7)

You should know how the G-20 compares to the G-7. The G-20 includes all G-7 members, which are the European Union and the seven largest developed economies: France, Germany, Italy, Japan, the United States, the United Kingdom, and Canada. The G-7, formed in 1975, meets annually on international issues, including economic and monetary matters.

The G-7 is older and often seen as more political because its meetings have always involved not just finance ministers but also heads of state like presidents and prime ministers. However, since the 2008 global financial crisis, the G-20 has also held summits with political leaders in addition to finance ministers and bank governors.

Unlike the G-7, which consists only of developed countries, the G-20 adds 12 nations from developing economies. This inclusion of both developed and emerging nations was a key reason for creating the G-20.

Russia and the Group of 20 (G-20)

Consider Russia's position in the G-20. In 2014, after Russia's military actions in Ukraine and the annexation of Crimea, the G-7 and G-20 responded differently. The G-7, which Russia had joined in 1998 to form the G-8, suspended Russia, and Russia left formally in 2017.

Australia, hosting the 2014 G-20 summit in Brisbane, suggested banning Russia, but Russia stayed in the G-20 due to support from Brazil, India, and China—the BRIC nations. The debate resurfaced in March 2022 after Russia's invasion of Ukraine, with President Biden calling for expulsion during G-7 and NATO summits, though Russian officials stated Putin would attend the November summit in Indonesia.

Membership of the Group of 20 (G-20)

Here's the makeup of the G-20. Besides the G-7 members, it includes Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, and Turkey.

The G-20 also invites guest countries, with Spain as a permanent invitee, plus the current ASEAN chair, two African representatives (from the African Union and the New Partnership for Africa's Development), and at least one country chosen by the presidency, often from its region.

International organizations like the International Monetary Fund, World Bank, United Nations, Financial Stability Board, and World Trade Organization attend summits. Continuity is managed by a 'Troika' of the current Presidency holder, its predecessor, and successor—currently Italy, Indonesia, and India.

Criticism of the Group of 20 (G-20)

I need to address the criticisms. The G-20 has been criticized for lacking transparency, encouraging trade agreements that favor large corporations, being slow on climate change, and failing to tackle social inequality and threats to democracy.

From the start, controversies have surrounded its operations, including concerns over transparency and accountability due to no formal charter and closed-door meetings. Policy prescriptions have drawn ire from liberal groups, with protests accusing the G-20 of prioritizing corporate interests over broader issues.

Membership policies are also criticized as overly restrictive, with guest invitations seen as token gestures for diversity. Former President Obama highlighted the challenge: everyone wants the smallest group that includes them, so the 21st largest nation pushes for a G-21 and views exclusion as unfair.