The Group of 20 is a worldwide financial diplomatic venture of 19 of the most prosperous countries in the world plus one representative from the European Union. Their members include financial leaders from these countries. Officials from the World Bank and IMF are also invited to attend the summits. These are completely devoted to world-wide financial stability. There's a G-8, also, with less territorial diversity. In these expanded, pluralistic times, the G-8 is ceding decision power to the G-20. Quite simply, the "money majority" requires more members and more locations to fine-tune the global economy.
Right now, they are talking about rising national deficits in this world-wide recession.
A bunch of suits talking about important things. (Boston.com)
Member countries include the U.S., Canada, Mexico, China, Saudi Arabia, Republic of Korea, South Africa, Brazil, and Australia. All big economies that can move money or act in concert when there is a money supply crisis. All regions have immediate reportage. All races, creeds, continents, faith traditions are represented. In short, everybody's moving up.
The start of the G-20:
Asian Financial Crisis
About the time the USSR was financially failing--the 'Golden Tigers' of Asia were mopping up on the international manufacturing scene. A big wave of speculation ran through Asia. This big mess, dubbed the Asian Financial Crisis (1997), started in Thailand which was in huge government debt. This created a local panic and recession, which quickly spread through Asia for various reasons (still being argued). It then proceeded to panic financial markets around the world. The G-20 was created in response to a less Euro-centric model of world money movement.
Russian Financial Crisis
In 1999, Russia had their financial crisis, a result of huge debt on the part of all those emerging nations, and a lack of business organization. The fact that their neighbor region of Asia was hip-deep in crisis was also no help, because money exchanges between Asia and Russia were already stunted. But Russia had bigger problems. People were getting shelled; people were starving; schools were closing; manufacturers could not get raw materials nor hospital supplies; and the ruble and other currencies were inflating rapidly. In Azerbaijan, for example, the banks were just printing notes with nothing to back them: neither gold, nor confidence, nor things to buy with that currency. Inflation rose to 400% a year from various factors. Nothing good can happen under such conditions.
Into the breach rose the G-20 and those previously not-so-spotlighted organizations such as the IMF and World Bank. In general, all of these groups (plus the other regional development banks) worked to stabilize currencies and provide business opportunities, back shaky governments, and also teach government officials what to do in order to Grow an Economy.
Unfortunately, this kind of teaching was all new to them too. While they had the correct elements of development, they only had laboratory models--not practical experience. In many cases, their timelines were too stringent. Places such as Azerbaijan were flooded with refugees from war, non-production, stress and a lack of jobs. That does not look, to a besieged government or its populace, like a time to cut spending.
In time, the IMF and World Bank, the G-20 and the regional development banks helped cut corruption, provide capital for business start ups, forced new countries to prioritize their dreams and bank their resource wealth. By doing this, they provided a chance for lasting investment (such as education, infrastructure) for these emerging and poorer countries. Since the major economies are the most likely lenders to the Development Banks, and the Development Banks work together, it facilitates an orderly rate of growth for these countries, supplementing small dreams and helping refine and fund bigger ones.
Why the demonstrations, then?
Photo: UK, 1999. Blah, blah, blah. (queerinthecity.com)
Well, it depends on which group is protesting.
1. They are seen by some as a precursor to world government--the G-20 is kind of like a world-wide Federal Reserve. It's a system that doesn't leave countries alone to fail or succeed on their own. It's about cooperation in money policy, not survival of the fittest. Of course in a world-wide economy with export and import, we do need our customers and suppliers to survive.
2. They are sometimes seen as a place where the rich countries make rules for the poor.
It is true that sometimes poor countries need to incubate their own small business before letting in major corporations in every industry. Other times, they can't develop it on their own.
For industries like oil or mining, those countries do not have the technical savvy nor the money to develop alone. When international industry does come in, the World Bank funds partner investment--so that the country gets a stake in production besides the rents of the land--and pushes for this money to be invested in the country.
In other industries, such as the insurance business or farming, small operators are sometimes considered necessary to grow a home economy--and can be pushed out of business by larger, international insurance or agribusiness firms.
In general, a mix of world-opportunity and home opportunity is good for any country. Developed countries by definition have grown a home economy and are looking for international trade. Therefore these developed countries do tend to emphasize international opportunities. Individual nations sometimes erect tariffs or restraints of trade in defense.
3. Whatever the G-20, IMF, or World Bank do, it's not enough.
There are always calls for the World Bank, the IMF, and the G-20 to Fund More, so that everybody always gets a fair shake. Sometimes, in international relations, I get the feeling that international financial institutions are supposed to dispense perfect justice. They now have a spotlight, and other actors (such as Presidents and Dictators) do not get the same scrutiny.
I don't say the G-20 is perfect, or the IMF or the World Bank--they're damned good at hardball, and they do have biases. Yet nobody else can do what they do, which is, create a space that evens out the cycles of failure and speculation into something less disastrous. We are too linked to other countries to be isolated any more. It matters what Saudi Arabia does, what Tanzania does, what happens in Thailand or Costa Rica.
Those that consider the G-20 as a form of world government should realize that the nations involved are actually performing complicated country-to-country negotiations. Furthermore, as a student of international relations, I have seen that many times their advice is not taken.
The international financial institutions help the poor, not with handouts, but with loans. They teach the poor how to prosper--they don't hand stuff over for nothing. They serve an absolutely essential function in the realm of charity as well as finance. They create business environments and therefore chances for prosperity.
The G-20 is good for everybody who wants to hold onto their money in a reasonable fashion and prosper the permanent way. With twenty different countries, and twenty different national agendas, they make a pretty good watchdog between themselves, too.
And my prayers and best wishes to the first responders in Toronto.
This Black Bloc demonstration will never help the world's poor,
and maximizes the amount of misery everywhere. (ynet news.)
Wikipedia, G-20. and Republic of Korea-G-20 site.