The G20 (Group of 20) is an annual meeting for the leaders of the world's biggest economies (technically 19 countries plus the EU). Together these countries account for 85% of the world economy and two-thirds of its population.
The G20 is the new kid on the block of international organizations. It was founded to create a bigger economic club than what existed at the time – the G7 – when more countries were needed to help respond to the financial crisis in East Asia in 1999.
Back then, the G20 was a fairly uneventful annual meeting of finance ministers and central bankers. The global financial crisis in 2008, kicked it into action, turning the organization into an economic emergency council for presidents and prime ministers. To keep things moving as the global economy was slipping into crisis mode, the G20 quickly organized for $1.1trillion to be injected into countries around the world, allowing businesses to continue operating despite what was going on.¹
The reason why the G20 were the ones to do this was because, in contrast to bigger organizations like the UN, the World Bank, orthe IMF, they could much more easily sit around the same table and come to quick agreements in a way that larger international bodies couldn’t. In some ways, the G20 is now the world's premier economic crisis-management organization.
But the small size of the G20 is a curse as well as blessing. As it only represents 19 countries (plus the EU), it excludes a pretty huge chunk of the world from discussions about big economic decisions (about 172 countries are not invited to the meetings). The idea of top leaders quickly deciding things around a table can also create sticky political situations; a lot of national governments aren’t set up for one leader to make big changes overnight without consulting a congress or parliament.
Since 2010, the G20 has suffered a slight ‘what have you done lately’ problem. The group was pretty helpful for crisis management, but without the threat of impending financial doom it’s been harder to get big decisions out of the annual meetings. Some suggest we should start thinking now about a more formal, and inclusive, replacement for the G20 that will be in place when the next crisis strikes so we’re not scrambling to get all the relevant leaders together at the last minute.²