What is the G-20?

The Group of 20, often referred to as the G-20, is a group of highly industrialized and emerging economies that meets to discuss important economic issues. Its members - 19 nations plus the European Union - represent 90 percent of the world's gross national product, 80 percent of world trade and two-thirds of the entire world's population.

The G-20 was established in 1999 in response to the Asian financial crisis. It aims to integrate key emerging markets into the “core of global economic discussion and governance,” according to the group's website.

The group meets annually but will convene more frequently if circumstances demand. G-20 leaders gathered for an emergency meeting in Washington DC last year, for example, to discuss the diminishing worldwide flow of credit that resulted from the sub-prime mortgage crisis.

The G-20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom and the United States of America. The European Union is represented by whichever EU country holds the rotating presidency at the time of the meeting.

What has the G-20 accomplished?

At the last meeting in London on April 2, leaders from the G-20 nations pledged a combined $1.1 trillion to aid the global economy and help it recover from the financial crisis. Many experts believe this aid package saved the modern financial system from a complete and immediate meltdown. Billions of dollars from the same package are also to be channelled to the world’s poorest countries.

G-20 leaders have continually called for more regulation on the global financial industry and control of tax havens. The leaders want banks to be more transparent and have promised more cross-border cooperation when it comes to catching financial criminals. Because many experts have said lax financial regulations helped plunge the world into the current crisis, G-20 leaders have met recently to rethink the rules governing international finance in the hope of preventing another worldwide financial catastrophe.

“We've learned many things from this crisis, and these lessons must be implemented,” said Luis Garicano, a professor at the London School of Economics. "We need advisory boards that aren’t afraid to taken action and push legislation that’s legally binding.”

One of the G-20’s most significant accomplishments - though difficult to measure in concrete terms - is the confidence it fosters among member nations. The G-20 aims to keep dialogue and trade among nations open - even in difficult times - to increase the overall strength of the world economic system and avoid panic and protectionism.

The upcoming G-20 meetings

The economic crisis is sure to be the overwhelming focus of the summit in Pittsburgh, Pennsylvania, on September 24-25. Reforming the rules of global finance is expected to be high on the agenda, too.

French President Nicholas Sarkozy and German Chancellor Angela Merkel have been vocal in their recent criticism of bankers’ pay. Sarkozy in particular wants a cap on the hefty bonuses that he believes promotes the kind of risky behaviour that helped precipitate the sub-prime mortgage crisis.

“Sarkozy has always been interested in reform, so he’s going to forcefully raise the issue and see whether he gets an international echo,” said Nicolas Veron, an analyst at the Brussels research firm Bruegel.

Report: Chad Smith
Editor: Sam Edmonds