Author Name: Ashutosh Singh Rawat

Introduction The G20 is a collaborative effort of 20 finance ministers and central bank governors from 19 economies of the world along with the European Union formed to cooperate and consult on matters relating to international financial system. Along with the European union the G20 group includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, Korea, Turkey, the United Kingdom, United States, which together constitute 90 percent of the global GNP and 80 percent of world trade. The G20 is an organisation that promotes discussion, after studying and reviewing policy issues among the industrial and emerging markets of the economy. The basic aim behind this discussion is to promote international financial stability.

Why G20? Since 1986, the G7 has been performing effectively for informal and substantive discussions of the important international economic issues. This group created a better understanding and co-ordination among policy makers. But the G7 lacked the emerging market representation. This restricted G7’s ability to deal with certain issues pertaining to international economy and financial system. Thus, to overcome this problems and failures in G7, the finance minister of this group announced about the G20 group on September 25, 1999, in Washington, D.C. he believed that the G20 will fulfill the needs of representation from the emerging markets.

Characteristics of G20 The industrialized countries along with the key emerging markets broadly participated in the G20 and represent an array of viewpoints. The G20 group functions without any permanent secretariat or staff. The structure and size of the group encourages the informal exchange of viewpoints and formation of agreement on various international issues. The world is looking forward to the G20 in hope of some constructive solutions and results that may affect the world economy on a whole.