G20
in Rome
A challenging Agenda
by Stefano Riela
T
he G20 is a gathering of the leaders of 19 countries and one institution, the European Union (EU). This year it will take place in Rome on October 30th and 31st . It represents 80 per cent of the world economy, gathered together in the eternal city. States are part of international institutions that manage and coordinate policies, like the World Bank and the International Monetary Fund (IMF). These institutions have grown to encompass almost every country of the world. However, the major industrialised countries of the West found the need to meet in smaller and more homogenous “Groups”, hence, the “G”. It all started in the early 1970s when the Bretton Woods system of quasi-fixed exchange rates collapsed and the first oil crisis was about to begin. The US organised a group with Germany, France and the UK (G4) to share macroeconomic initiatives between its members. The (G4) later expanded with the entry of Japan (G5), Italy (G6) and Canada (G7). The EU has attended the G7 since the
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late seventies as a non-enumerated participant. The club opened its doors to Russia after the dissolution of the Soviet Union, and in 1998 the G8 was created. Russia, however, quit the G8 in 2017 following the annexation of Crimea. The G20 was created in 1999 after a series of financial crises: the Mexican peso crisis, the Asian and Russian crisis, and the collapse of Long-Term Capital Management. This unveiled the interconnection of capital markets and the need to involve other big economies along those of G7. Following the 2008 financial crisis, the G20 went beyond a gathering of finance ministers to involve heads of state and government. In 2008, the economic weight of G7 countries was 52 per cent of the world GDP, well below the 70 per cent of 1992 and, since then, the G7 has lost even more to reach 45 per cent in 2021. Meanwhile, the 12 countries that complement the G7 in the G20 – China, India, Korea, Russia, Australia, Brazil, Mexico, Indonesia, Saudi Arabia, Turkey, Argentina and South Africa have increased their overall weight from 12 per cent in 1992 to 33 per cent in 2021.
Segmento Issue XXIII • June-August 2021
