What Is The G20?

In a similar vein as the International Monetary Fund (IMF) and World Bank, the Group of 20 (G20) is an international financial authority. However, instead of engaging in lending or the provision of financial assistance to member nations, the G20 is a consortium tasked with addressing the premier global economic challenges of the day.

Composition And Mission

The G20 is made up of the world’s economic superpowers, financial leaders and developing nations. As a whole, G20 members represent every continent (except Antarctica), two-thirds of the world’s population and 85% of global economic output. The G20 is officially made up of 19 member nations, the European Union (EU) and permanent guest country Spain. Below is a list of the individual member nations by region:

Africa: South Africa
Asia: China, India, Indonesia, Japan, South Korea
Americas: Argentina, Brazil, Canada, Mexico, United States
Europe: France*, Germany*, Italy*, Russia, United Kingdom*, EU members
Middle East: Saudi Arabia, Turkey
Oceania: Australia

*Featured EU economies, with the United Kingdom scheduled to depart in March 2019

While the G20 has no permanent headquarters or physical residence, its bodies convene on a regional basis throughout the year. Serving as a non-partisan and independent think tank, the G20’s formal mission statement is as follows:

1. “Act as a facilitator and mediator for expert discourse, with focus on innovation-driven communication.”

2. “Initiate and coordinate communication between governments, business, academia and youth, in an effort to create a sustainable win-win situation for all involved.”


The creation of the G20 dates back to the late 1990s and a decision to expand the existing Group of Seven (G7). Citing a need to “broaden the dialogue on key economic and financial policy issues” while “promoting co-operation and achieve sustainable global economic growth for all,” acting G7 ministers sought to extend the reach of group. The result was the inclusion of the world’s most influential economies, both advanced and emerging.

One of the inspirations behind the G20’s foundation was the framework put forth by the Bretton Woods Accords. In December 1999, acting G7 heads summoned “counterparts from a number of systemically important countries from regions around the world” to Berlin, Germany. Their task was to engage challenges facing the international economic and financial environment, and the invitees included leading global powers and developing nations. In addition, the meeting in Berlin featured representatives from several Bretton Woods holdovers such as the IMF and World Bank.

One of the G20’s founding principles was to recognise the growing importance of developing nations and foster full integration of the global economy. These objectives were outlined in the G20’s mandate:

1. Help shape the international agenda.
2. Debate economic and financial issues that lack consensus opinion.
3. Prevent and resolve international financial crises.
4. Strengthen financial systems through transparency

Over the roughly two decades of its existence, the G20 has made special accommodation in times of extraordinary trials.

1. Following the terrorist attacks in the U.S. on 11 September 2001, an emergency meeting of G20 members was held in Ottawa, Canada. At the conference, an unprecedented set of controls was put forth to cease the international financing of terrorist activities. In the years that followed, the guidelines were adopted by all members of the G20.

2. During the height of the Global Economic Crisis of 2008-10, the G20 took action by holding a special meeting in the spring of 2009. Following the collapse of lending giant Lehman Brothers, real questions surrounded the future viability of the global economy. At the spring summit in London, United Kingdom, then-U.K Prime Minister Gordon Brown negotiated a deal that called for a US$1.1 trillion stimulus package to be injected into the global economy. This stimulus is credited with staving off a world-wide depressionary cycle, as well as being the first step in rectifying the “too big too fail” problem facing commercial banking institutions.

While the accomplishments of the G20 are often lauded as being a calming influence in the world of finance, they do not come without criticism. Detractors deem efforts as being “exclusive,” arguing that the G20 has strengthened the power of corporations, ignored climate change, turned a blind eye to social injustice and been tolerant of authoritarian regimes.[7] These claims have been put forth periodically by leading opposition bodies such as Greenpeace and Oxfam Germany. Subsequently, organised protests are commonplace for the annual Leaders’ Summit, with one of the largest in history occurring in 2017 at Hamburg, Germany.

Form And Function

Over the course of each calendar year, the G20 carries out an extensive agenda. More than 50 regional conferences of member representatives, known as “sherpas,” are held to address any pressing issues stemming from global finance. The focus of these meetings is categorised as adhering to one of two “tracks”:

Finance Track: The finance classification includes all meetings involving G20 finance ministers, central bank authorities and affiliates. The issues they tackle are rooted in finance and economics, and topics such as monetary policy, exchange rate volatility, financial regulation and infrastructure development are frequently discussed.

Sherpa Track: Each member nation’s representative, or “sherpa,” is commissioned with addressing broader societal matters. Politics, trade, energy and gender equality are a few of the subjects regularly scrutinised by working groups at scheduled sherpa functions.

Each year, a select member nation is given the opportunity to act as president of the G20. To ensure a seamless execution of the annual agenda, the acting presidency works in tandem with the previous and succeeding administrations. This collective is referred to as the “troika.”

Upon the year’s work being completed, the annual Leaders’ Summit is held to issue the G20’s joint declaration. The troika works together to ensure the consistency of the Leaders’ Summit and to promote the official agenda of the meeting.

The G20 Leaders Summit

A key function of the G20 is the annual Leaders Summit where heads of state, central bankers and various civil and business leaders are invited to share ideas regarding global economic health. It is held over a two-day period and is the culmination of the year’s work. Following the Leaders Summit, the G20 issues a formal statement regarding its official recommendations crafted throughout the year.


While not an official regulatory body, the G20 has formidable power when it comes to international finance. Its agenda often leads to reform, defining the path of the global economic and monetary systems. In times of prosperity or crisis, the G20 is viewed as a pillar of the world’s financial community and a premier decision making body.