Definition
The Group of 20, or G-20, is an international forum comprising 19 countries and the European Union designed to discuss policy issues related to global economic stability. The G-20 members represent about 80% of the world’s economic output, two-thirds of the global population, and three-quarters of international trade. The organization discusses and promotes major economic and financial policy issues, including global economic growth, international trade, and the regulation of financial markets.
Phonetic
The phonetics of the keyword: Group of 20 (G-20) is:/ɡruːp ʌv ‘twɛnti/ (G-20)
Key Takeaways
G-20 Key Takeaways:
- The Group of 20, or G-20, is an international forum for the governments and central bank governors from 19 countries and the European Union.
- The primary purpose of the G-20 is to review, discuss, and promote high-level discussion of policy issues pertaining to the promotion of international financial stability.
- G-20 member countries account for around 85% of the world’s economic output, 75% of global trade, and two-thirds of the world’s population.
Importance
The Group of 20 (G-20) is a vital international forum for the governments and central bank governors from 19 countries and the European Union. Its significance lies in the collective economic influence of these members, which account for roughly 80% of global Gross Domestic Product (GDP), 75% of global trade, and 60% of the world’s population. Therefore, the G-20’s decisions and policies have significant global economic implications. The group was designed to enhance cooperation and promote international financial stability, focusing on major issues such as sustainable economic growth and financial market regulation. As a key platform for economic dialogue and policy coordination, the significance of the G-20 extends far beyond its member states.
Explanation
The Group of 20 (G-20) is a forum of the world’s major economies aimed at fostering global economic growth, stability, and increased multilateral collaboration. Essentially serving as a governing board of the global economy, the G-20 was formed to discuss and coordinate strategies to tackle international economic challenges and issues that go beyond the capacities of individual nations. It includes representatives from both developed nations and emerging economies, consisting of 19 countries and the European Union, accounting for nearly 80% of world trade and two-thirds of the world’s population. The major value of the G-20 lies in its function as a platform for informal dialogue between major economies on key issues related to global economic stability and expansion. The G-20 conducts meetings at several levels, from finance ministers to central bank governors. However, the focal point of the G-20’s activities is the annual leaders’ summit, where the world’s leading political figures discuss and devise policies to address global economic issues. Through its collaborative actions, the G-20 strives to shape the global economic agenda, making it an essential part of the international landscape.
Examples
1. Financial Crisis of 2008: When the global economy faced a serious downturn due to the financial crisis in 2008, the G-20 took an active role in spearheading the response to the crisis. The group coordinated fiscal stimulus packages and acted to strengthen the international financial architecture, making efforts to regulate the banking sector more stringently and promote financial transparency.2. COVID-19 Economic Impact: Amidst the COVID-19 pandemic, the G-20 members convened, not just at the leaders’ level, but also via finance ministers and central bank governors’ meetings, to discuss global economic impacts and recovery measures. In April 2020, the G20 finance ministers agreed to a timeout on debt repayments from 77 of the world’s poorest countries to help them deal with the economic fallout from the COVID-19 pandemic.3. Taxation: In a significant move in 2021, the G-20 finance ministers endorsed a global minimum tax of 15% on multinational companies. This decision was made to stop corporations from leveraging low tax countries to avoid paying taxes, hence ensuring these companies pay their “fair share” in every country they operate in.
Frequently Asked Questions(FAQ)
What is G-20?
G-20 or Group of 20 is an international forum for the governments and central bank governors from 19 countries and the European Union.
Which countries are included in G-20?
The G-20 membership comprises a mix of the world’s largest advanced and emerging economies, including Argentina, Australia, Brazil, Canada, China, Germany, France, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the United States, and the European Union.
What is the main purpose of G-20?
The G-20 aims to discuss policy issues pertaining to the promotion of international financial stability and seeks to address issues that go beyond the responsibilities of any one country.
How often does the G-20 meet?
The G-20 leaders meet annually at a summit. Additionally, there are several ministerial-level G-20 meetings held throughout the year.
What topics are generally covered in G-20 meetings?
The topics are extensive but primarily include global economic growth, international trade and financial market regulation. Additionally, the G-20 has started to focus on a broad agenda that includes issues such as climate change, development, energy, and anti-corruption.
What power does G-20 have?
The G-20 isn’t a legislative body, and its agreements and decisions have no legal impact. Instead, it depends on the persuasive and political power of its declarations and the willingness of individual member countries to follow through on the agreed strategies.
How does G-20 differ from G-7?
G-7 is a group of the world’s seven largest advanced economies plus the European Union, while the G-20 includes both advanced and emerging economies and represents about 80% of global GDP, 75% of international trade, and 60% of the population of the world.
Related Finance Terms
- Economic Policy
- International Monetary Fund (IMF)
- Financial Stability Board (FSB)
- Global Economic Governance
- Sustainable Development Goals (SDGs)
Sources for More Information
