The G-20 Pittsburgh Summit
The G-20 heads of government and finance ministers met in Pittsburgh last week. Officially named “The Group of Twenty Finance Ministers and Central Bank Governors,” the organization was established in 1999. According to their website the G-20’s purpose is “to bring together systematically important industrialized and developing economies to discuss key issues in the global economy.”
The G-20 promotes global cooperation between the largest economies in the world. Although decisions are officially non-binding on the member states, members consult each other on major economic decisions. The group has loose ties to the World Bank, the International Monetary and Finance Committee, the Financial Stability Forum, and other international institutions.
G-20 economies comprise 85% of global production, 80% of world trade, and two-thirds of the world’s population. Current member states are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States, and the European Union.
One of the more significant results of the Pittsburgh meeting was the announcement that the G-8 is no longer the primary international economic forum. On Friday, G-20 leaders declared the G-8 has been superseded by the G-20 as the main economic council of wealthy nations. This illustrates the ascent of emerging markets. China will soon overtake Japan as the world’s 2nd largest economy while Russia, Brazil, India, and other ‘2nd tier’ economies are growing quickly.
Another event relates to a two-word declaration in the event’s final statement. Speaking on the global financial crisis and how the G-20 responded to it, leaders inserted a blunt “it worked.” They may have spoken too soon. Continued high unemployment, banking sector instability, and the injection of trillions in economic stimulus into the global economy could create more problems. Of their seemingly premature conclusion, one former chief economist of the International Monetary Fund said, “it’s hubris.”
Finally, the G-20 wanted to be seen as moving past the global recession. They addressed global climate change. President Obama spoke about a “transition to a 21st-century clean energy economy.” No timetables were set and no decisions made. However, the fact that G-20 leaders addressed the topic underscored current momentum for action on cap-and-trade, carbon restrictions, and other green initiatives. Worldwide action on these goals, for better or worse, is gaining momentum