The G20, or Group of 20, was formed in 1999. It comprises 19 countries with the world’s richest or fastest developing economies, as well as the European Union. Its members are 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. Spain is a permanent guest. The group’s finance ministers and central bank governors meet annually to discuss and develop ways to address financial issues of global concern.
In November 1975, leaders from the six countries with the world’s largest economies (West Germany, France, Italy, Japan, the United Kingdom and the United States) met in France to discuss global economic challenges. It was agreed that they would meet every year. The informal organization was called the Group of Six, or G6. Canada joined in 1976, making it the G7. Russia joined in 1997 to make it the G8 but was expelled in 2014. The group again became the G7.
When the G7 was formed, its economies represented about 70 per cent of the world’s gross domestic product (GDP). By the 1990s, the group’s economies still comprised 64–67 per cent of global GDP. However, the economies of many countries — particularly China, India and Indonesia — were on the rise. It was increasingly felt that dialogue between advanced and emerging economies was required as emerging markets’ share of global trade increased. Another incentive to form a larger group was the 1997 Asian Financial Crisis. It began when Thailand devalued its currency; within a year, economies across Asia, Latin America and Eastern Europe had become destabilized. This led to calls for annual consultations among a larger group of countries.
At a September 1999 meeting of G7 finance ministers and central bank governors, it was announced that a new, larger group of rich and developing countries would be formed. The new group would augment the work of what was then the G8, but would not replace it. The announcement marked the beginning of the G20.
It was agreed that the group needed to be large enough to legitimately represent the world’s largest economies and regions but small enough to allow for open and frank discussions. It was decided that the new group would comprise 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. The European Union would belong as a regional representative. Spain would be a permanent invited guest. Also invited to G20 meetings would be representatives from the World Bank, the International Monetary Fund (IMF), the International Labour Organization, the World Trade Organization and the United Nations.
Structure and Function
Like the G7, the G20 has no constitution, permanent office or staff. It cannot create laws and it cannot bind member states to decisions or policies. Its purpose is to bring countries together to discuss issues of concern and to encourage members and other nations to address them in a coordinated manner.
While the G7 is attended by government leaders, G20 meetings are attended by each member’s finance minister, central bank governor (see Bank of Canada) and one additional representative. The host country rotates with each annual, autumn meeting. Each two-day summit concludes with the publication of a communiqué that outlines the outcomes of the discussions.
The G20 chair serves a one-year term. A three-person management team consisting of the previous, current and upcoming chairs proposes agendas, selects speakers and establishes meeting locations. The host country provides secretariat services. Group of 20 deputies meet at least twice a year to do more detailed planning. Study groups do analytic work between meetings. The G20 also invites international engagement groups from each member country to present recommendations. Engagement groups represent the concerns of business, the civil service, labour, the sciences, women and youth. They also include two informal engagement groups: The Young Entrepreneurs’ Alliance; and Fora, previously called G(irls)20.
The G20’s first meeting was held in Berlin, Germany, in December 1999. Its inaugural chair was Canada’s finance minister, Paul Martin. He had strongly advocated for the creation of the group. It was established that the G20’s mandate would be to promote “co-operation to achieve stable and sustainable world economic growth that benefits all.”
Notable G20 Initiatives
Standards and Codes
At the first two G20 summits in Berlin (1999) and Montreal (2000), it was agreed that all member countries should adopt sound macroeconomic policies and regulations regarding exchange rates and debt management. This would reduce vulnerability to financial instability. To do so, each member observes internationally accepted standards and codes established by the IMF and the World Bank. It was agreed that each member should be transparent in reporting its progress in the adoption of standards and codes to the IMF and the World Bank.
In Montreal in 2000, G20 members expressed support for globalization — the increasing integration of national economies resulting from the greater international mobility of goods, services, capital, people and ideas. It was agreed that all members would report on case studies demonstrating how they were working to ensure that globalization’s benefits were sustainable and widely shared. (See also Sustainable Development.)
Following the 9/11 terrorist attacks in the United States in 2001, G20 members established an Action Plan on Terrorist Financing. It stated that heightened security measures should be adopted in a manner that allowed the continuation of trade in goods and services. It also stated that member countries were committed to fighting terrorism by denying terrorist groups the opportunity to fund their operations through access to financial systems.
The G20 met in Washington, DC, at the height of the 2008 global financial crisis. Members committed to reform the global financial system to help countries recover from the effects of the crisis and to avoid another. It also determined that each member country should establish stronger regulations in its financial sector to enhance stability, transparency, accountability and integrity.
As with the G7, the efforts of the G20 have reflected the growing international interdependence brought about by globalization. However, globalization has also inspired resistance and protests on the grounds that it has lowered environmental, labour and living standards. In 1998, approximately 70,000 protesters formed a human chain around the site of the G7 summit in Birmingham, England. In July 2001, 200,000 protesters gathered at the G7 meeting in Genoa, Italy. Confrontations between police and protesters led to many injuries and arrests. One protester was shot and killed.
The anti-globalization protests at G7 meetings mirrored the even more violent protests at other multilateral meetings; most notably the 1999 World Trade Organization (WTO) meeting in Seattle and the 2001 Summit of the Americas meeting in Quebec City. The G20 summit in Toronto on 26 and 27 June 2010 was the site of a violent clash between about 7,000 protesters and between 19,000 and 21,000 police. It resulted in insurance claims for at least $11.2 million in damages. There were also more than 1,100 arrests, making it the largest mass arrest in Canadian history. In the settlement for a class-action lawsuit, Toronto Police Services paid $16.5 million to those who were wrongfully detained.
The G20 has been criticized by those opposed to the effects of globalization, which have included worsening income inequality and environmental degradation. The group has also been rebuked for its inaction on the climate crisis and for failing to play a significant role in the distribution of vaccines during the COVID-19 pandemic.