The G-20-Part I

Introduction:  The G-20, or the Group of 20, is a group of both developed and developing countries, that play an important role in international economic and financial matters, and are hence considered to be systemically important at the global level.

The member countries of the group are Argentina, Australia, Brazil, Canada, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States of America, and the European Union.   The member countries are represented by their Finance Ministers and Governors of their Central Banks.   Apart from these countries, the International Monetary Fund and the World Bank are also represented in the group, on ex-officio basis.   The G-20 does not have a permanent Secretariat.

Origin:  The G-20 came into being in the year 1999.   The late nineteens saw a lot of turbulence in the financial markets of the world(that has now assumed the dimensions of a full blown recession).   It was felt, at the time, by the industrialized nations, that the earlier exclusive groups like the G-7 may not be sufficient to deal with the myriad challenges thrown up by the chaotic markets.   They then decided, albeit grudgingly, to give more scope for the developing world to play a role in discussing and debating key issues relating to the global economy.

Purpose of G-20:  The basic purpose of the G-20 is to promote and accelerate the process of development throughout the world, through a process of dialog and discussion between the industrialized world, and the emerging market economies.

The G-20 seeks to strengthen the international financial structures and frameworks through co-operation between the developed and the developing economies, and to institutionalize this process to ensure long term growth and development.   It gives voice to the less developed and emerging market economies, about their aspirations and concerns.

The G-20 seeks to understand the dynamics of an integrated global economy, and the problems and prospects of individual components of this global economy, and how to ensure a peaceful and profitable partnership betweeen these often competing forces.  

Many a time the interests of the developed and the developing economies are divergent and even conflicting with each other.   The G-20 forum promotes a dialog to resolve such issues, so that the process of development extends through the length and breath of the world.  

Historically, the marginalization of the developing world in the process of global economic governance, and the appropriation of the levers of development by the developed world led to the alienation of a good chunk of the world population.   This in turn led to the developed economies losing out on the opportunities in the emerging markets.

By seeking to include the developing economies in the formulation of international economic and financial policies, and also in the role of international financial institutions, the G-20 hopes to reduce, if not eliminate, friction between the developing and the developed world, and replace it with co-operation between the two sides.

                                                                                                              To be concluded.