Introduction to the G-20
Adapted from the pamphlet "Twenty People Commanding 6.7 Billion"
The G-20 is an abbreviation for the "Group of Twenty Finance Ministers and Central Bank Governors." It is a loose formation that brings together the finance ministers and the heads of the central banks from the world's most powerful countries. Together, the G-20 countries account for 85 percent of the global gross national product at about 80 percent of world trade.
The G-20 is comprised of the finance ministers and central bank governors of 19 powerful countries and the presidency of the European Union (EU). Also at the table are the heads of the European Central Bank, the Managing Director of the International Monetary Fund, the President of the World Bank, the President of the International Monetary and Finance Committee and the Chairman of the Development Committee.
While most of the world's largest economies are represented at the G-20, the G-20 does not actually include the world's 20 largest economies by any measure. The group interestingly excludes some major economic powerhouses while including some countries with smaller economies.
Looking purely at GDP at nominal prices, Taiwan, Switzerland, Norway, Iran, Spain, the Netherlands, Poland, Belgium, Sweden, Austria, Greece, Denmark and Iran all have economies larger than G-20 member countries South Africa and Argentina. Looking at another measure, purchasing power parity rates, Taiwan, Iran, Thailand, Spain, the Netherlands and Poland are all excluded even though they outrank G-20 member country South Africa by that metric as well. Some European countries including Switzerland, Norway, Spain, the Netherlands, Poland and Belgium are partially represented at the G-20 through their membership in the EU, but they are still excluded from a full seat at the table.
Part of this discrepancy can be attributed to changes in the global economy. The G-20 first met in 1999 and the global economy has significantly shifted in the decade since its inception, however the G-20 has not changed its membership. Additionally, we might assume that some countries are included or excluded for political reasons. Because of Iran's assertive military stance in the Middle East, the existing economic powers are likely reluctant to invite the emerging economic powerhouse into the forum. At the same time, South Africa, which ranks 35th on the nominal GDP rate list and 25th on the PPP GDP list, has historically been a strong political player in bringing developing countries together to combat neoliberal policies from the global north, so it is likely that the larger economies are apprehensive about pushing out of the process such a politically powerful country and the only G-20 member country.
The actual operations of the G-20 happen behind closed doors. Only the member countries and invited guests (from major international financial institutions) are invited into the room. There is no public agenda, no opportunity for public comments or input, and no public minutes from the proceedings. The public's only insight into what happens inside the G-20 meetings is a brief press statement that the member countries make at the conclusion of the summit. While we have no idea what actually happens behind the closed doors of the G-20 summits, we can imagine that the more economically and politically powerful countries control the process and use their economic, political and military leverage over delegates from emerging economies to corral them into line. The policy prescriptions coming out of the G-20 generally end up supporting the economic interests of major commercial banks, financiers and multinational corporations, without addressing the serious economic troubles that developing countries are facing.
Throughout its existence, the G-20 has been an aggressive and unapologetic supporter of free trade policies that require countries to open their markets to cheap imports and that generate violent and rapid restructuring and instability as local economies are steamrolled by global production shifts and market fluctuations. In the face of economic instability, the G-20 has generally advocated the use of temporary loans from international financial institutions that lock developing nations, struggling to respond to economic fluctuations, into a subservient debtor relationship with the world's wealthier, more powerful, nations.
Since its inception, the G-8 had been plagued by critiques from developing countries and civil society organizations asserting that the group was too exclusive, controlled too much power over the rest of the world, and failed to incorporate voices from the global south. In response to these critiques, and in hope of convincing developing economies to participate in some of the G-8's free trade schemes, global leaders convened a meeting of 22 of the world's largest economies in Washington, D.C. in 1998. The next year, a similar meeting was held incorporating leaders from 33 countries from around the world, and later in 1999, the Group was whittled back down to 20. That group of 20 countries became what is now known as the G-20 and has been meeting every year since.
In April of 2009, the G-20 convened a special summit in London that brought together the heads of state from each member country, in addition to the finance ministers and central bank heads who typically participate in G-20 summits.
Following the summit, which occurred behind closed doors amid huge street demonstrations, leaders emerged to announce a $1.1 trillion package to attempt to bail out the global economy. The global bailout package included up to $750 billion for the International Monetary Fund, a trade finance package worth $250 billion and at least $100 billion in additional lending by the Multilateral Development Banks.
In September of 2009, the Group will meet again, this time in Pittsburgh, Pa., and they will surely be met with street demonstration as clamorous as those of London's summit.
For more information, visit the Pittsburgh G-20 Resistance Project.