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About G-20
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The inaugural meeting of the G-20 (Group of Twenty) took place in Berlin
on 15-16 December 1999; it was hosted by the German finance minister Hans Eichel
and chaired by the Canadian finance minister Paul Martin. The G-20 had been set
up on the recommendation of the G-7 finance ministers (in their report to the
economic summit in Cologne on strengthening the international financial
architecture) and was confirmed by them and the central bank governors in their
joint communiqu¨¦ in September 1999.
1. Mandate
The G-20 is an
informal forum which seeks to promote an open and constructive dialogue between
industrial nations and emerging-market countries on key issues relating to the
international monetary and financial system and, in the process, to help
strengthen the international financial architecture. In addition, it provides
its members from a range of major countries at varying stages of development
with a platform for discussing current international economic
questions.
In practice the G-20 develops a common stance on issues
relating to the further development of the international currency and financial
systems, aiming to provide stimuli both for national economic policies and for
decisions in the Bretton-Woods institutions (International Monetary Fund and
World Bank). At the same time the G-20 countries try to foster the establishment
of internationally recognized standards in practice through leading by example
in the form of, for instance, transparent fiscal policy or combating money
laundering and the financing of terrorism.
2. Genesis
A
high-level informal dialogue among actors who have a special responsibility for
the world economy has proved an effective instrument for shaping globalization.
For example, since 1986 the meetings of the G-7 (Group of Seven) countries have
provided a forum for informal and substantive discussion of important
international economic issues which has led to greater understanding and more
effective cooperation among policy makers in the G-7 countries.
However,
G-7 membership is limited to the world's seven largest western economies
(Canada, France, Germany, Italy, Japan, the United Kingdom and the United
States). Emerging-market countries are not involved in this dialogue. But
without the emerging-market countries the G-7's legitimacy and influence are
constrained when dealing with issues which relate to development in the overall
international economic and financial system. Moreover, the financial balance of
payments crises in the mid and late 1990s revealed the shortcomings of the
existing procedures for crisis prevention and resolution. The creation of the
G-20 was designed to meet the need for closer cooperation between industrial and
emerging-market countries.
Prior to the creation of the G-20, similar
groupings to promote dialogue and analysis had been set up at the initiative of
the G-7 in 1998 (G-22) and 1999 (G-33). The G-22 met in Washington in April and
October 1998. Its aim was to involve non-G-7 countries in the resolution of
global aspects of the financial crisis in the emerging-market countries. Two
subsequent meetings comprising a larger group of participants (G-33) held in
March and April 1999 discussed reforms of the global economy and the
international financial system. The proposals made by the G-22 and G-33 to
reduce the world economy's susceptibility to crises showed the potential
benefits of a regular international consultative forum embracing the
emerging-market countries. Such a regular dialogue with a constant set of
partners was institutionalized by the creation of the G-20 in 1999.
3. Membership
The members of the G-20 are the finance
ministries and central banks of 19 countries: Argentina, Australia, Brazil,
Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico,
Russia, Saudi-Arabia, South Africa, Turkey, the United Kingdom and the United
States. Another member is the European Union, represented by the Council
presidency and the European Central Bank. To ensure that the G-20's activities
are closely aligned with those of the Bretton-Woods institutions, the managing
director of the IMF and the president of the World Bank, plus the chairpersons
of the International Monetary and Financial Committee and Development Committee
of the IMF and World Bank, also participate in the talks as ex-officio members.
The G-20 thus brings together important industrial and emerging-market
countries from all regions of the world. Together the member-countries represent
around 90% of global gross national product, 80% of world trade (including EU
intra-trade) as well as two-thirds of the world's population. Owing to its
economic weight and broad membership, the G-20 enjoys a high degree of
legitimacy and far-reaching influence.
4. Chair
Unlike
international organizations such as the OECD or the IMF, the G-20 (like the G-7)
has no permanent staff of its own. Therefore the current chairing country sets
up a temporary secretariat for the duration of its chairmanship which
coordinates the group's work and organises its meetings. The first chairman of
the G-20 was the Canadian finance minister Paul Martin, who presided over the
first three meetings held in Berlin in December 1999, Montreal in October 2000
and Ottawa in November 2001. In March 2002 India's finance minister Jaswant
Singh took over this function. In 2003 the chairmanship passed to the Mexican
finance minister Francisco Gil Diaz. In 2004, German finance minister Hans
Eichel chaired the group. In 2005 China assumed the presidency of the G-20.The
finance minister Jin Renqing will chair the Group until the end of this year.
5. Meetings and activities
The G-20 finance ministers and
central bank governors, plus their deputies, meet once a year. Additional
participants are the finance minister of the country currently holding the
presidency of the European Union and the president of the European Central Bank.
The managing director of the IMF, the president of the World Bank as well as the
finance ministers of the countries chairing the International Monetary and
Financial Committee and Development Committee of the IMF and World Bank also
attend the meetings.
The last meeting of ministers and governors was held
on 20-21November 2004 in Berlin/Germany. This year's meeting of ministers and
governors will take place in Xianghe,Hebei Province in October.
The
ministers' and governors' meetings are prepared by a committee comprising the
ministers' and governors' deputies. As a rule the deputies meet twice a year.
Since January 2002 a three-member troika consisting of the current, past and
future chair coordinates the G-20's ongoing work.
However, the G-20's
activities are not confined to the meetings of the ministers and governors and
of their deputies. They also include organising technical seminars as well as
compiling reports and case-studies on specific subjects.
6. Interaction
with other international organisations
The G-20 group cooperates
closely with various organisations and fora, as the potential to develop common
positions on complex issues among G-20 members facilitates the acceleration of
decision-making in other bodies.
¡¤ The participation of the president
of the World Bank, the managing director of the IMF and the chairpersons of the
International Monetary and Financial Committee and the Development Committee in
the G-20 meetings, ensures that the G-20 process is well integrated with the
activities of the Bretton-Woods institutions.
¡¤ The G-20 supports other
international groups and organisations, such as the Financial Stability Forum,
in implementing economic policy reforms.
¡¤ In addition, experts from
private-sector institutions are invited to G-20 events on an ad hoc basis so as
to exploit synergies in the dialogue on selected topics.
7. External
communication
The country currently chairing the G-20 posts details
of the group's meetings and work programme on a dedicated website. Although
participation in the meetings is reserved for members, the public is informed
about what was discussed and agreed immediately after the meeting of ministers
and governors has ended.
After each meeting of ministers and governors
the G-20 publishes a communiqu¨¦ which records the agreements reached and
measures outlined and ensures the continuity of the work.
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(Editor:Farah Song) (From:WWW.G20.org)
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