What the G20 Is, and What It Does

The G20, or Group of Twenty, is an informal forum in which the world’s largest economies coordinate on economic and financial policy. It brings together 19 individual countries plus the European Union and the African Union, and its members together account for roughly 85% of global output, about three-quarters of world trade and around two-thirds of the planet’s population. It is not a government or a treaty organisation; it is a table where powerful economies try to agree on how to manage shared problems.

Why was the G20 created?

The G20 grew out of financial turmoil. It was established in 1999 as a forum for finance ministers and central bank governors, in the wake of the Asian financial crisis that had swept through emerging markets in the late 1990s. The idea was that the established club of wealthy nations was too narrow to manage a globalised economy, and that fast-growing emerging economies needed a seat at the table.

For its first decade the G20 operated at ministerial level. That changed in 2008, when the global financial crisis threatened the world’s banking system. Leaders decided that finance ministers alone could not coordinate a response of the scale required, so the group was upgraded to a summit of heads of state and government. Since then it has described itself as the premier forum for international economic cooperation.

Who belongs to the G20?

The G20 has 19 member countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Türkiye, the United Kingdom and the United States. Alongside them sit two regional bodies. The European Union has been a member from the start, and in 2023 the African Union was admitted as a permanent member at the New Delhi summit, becoming the second regional bloc to hold that status.

The membership deliberately mixes long-established advanced economies with large emerging ones. That combination is the source of both the G20’s strength and its difficulty: it is more representative than smaller clubs, but agreement among such a diverse group can be hard to reach.

What does the G20 actually do?

The G20’s core work is policy coordination. Members discuss and try to align on questions such as fiscal and monetary policy, financial regulation, international trade, debt relief for poorer countries, and the stability of the global banking system. The forum was designed for exactly these tasks, and its clearest successes have come during crises, when leaders needed to signal that they would act together rather than at cross-purposes.

Over time the agenda has widened well beyond banking. Recent summits have taken in climate change, global health, food security, digital policy, taxation of multinational companies and development. Much of the detailed work happens before leaders ever meet, in tracks run by finance officials and by other ministries, often supported by international institutions such as the International Monetary Fund, the World Bank and the OECD.

How is the G20 organised?

One of the most distinctive features of the G20 is what it lacks. There is no permanent headquarters, no standing staff and no charter. Instead, a different member holds the presidency each year on a rotating basis. That country hosts the leaders’ summit, chairs the many preparatory meetings and helps set the agenda for its term. Continuity is maintained through an informal grouping of the past, present and future presidencies, sometimes called the troika.

The negotiations themselves run along two main tracks. The finance track, led by finance ministers and central bank governors, handles the economic core of the agenda, from monetary and fiscal questions to financial regulation and international taxation. The sherpa track, named after the personal envoys who represent each leader, covers wider issues such as development, climate, energy, health and anti-corruption. Beneath both sit numerous working groups and a network of engagement groups representing business, labour, civil society, think tanks, women and young people, which feed recommendations into the process. By the time leaders arrive at the summit, most of the text has already been negotiated by officials.

Because the G20 produces statements rather than laws, its conclusions are not legally binding. A summit typically ends with a communiqué setting out shared commitments, which members are then expected to implement through their own national policies and through other bodies. The forum’s power is political and reputational: its influence rests on the fact that the leaders around the table govern most of the world’s economy.

How does the G20 differ from the G7?

The G20 is often confused with the older G7, but the two differ mainly in size and composition. The G7 is a smaller group of advanced economies, while the G20 adds major emerging economies such as China, India, Brazil and Indonesia. The table below sets out the broad contrasts.

Feature	G7	G20
Members	Seven advanced economies plus the EU	19 countries plus the EU and the African Union
Founded as a leaders’ forum	1970s	2008
Main focus	Shared concerns of wealthy democracies	Broad global economic and financial challenges
Representation	Narrower, more like-minded	Broader, more diverse and harder to align

Supporters of the G20 argue that its wider membership gives its agreements greater legitimacy, because they reflect the views of both rich and rapidly developing nations. Critics counter that its very breadth makes consensus slow and its statements vague. Both points can be true at once. In practice the two groups overlap and complement each other, with the G7 often coordinating positions ahead of wider G20 meetings.

What has the G20 achieved?

The G20’s most cited achievement remains its response to the 2008 financial crisis, when coordinated stimulus, support for the banking system and a strengthening of global financial regulation helped prevent a deeper collapse. The group also expanded the resources of the International Monetary Fund and pushed reforms to make banks more resilient. In later years it has been a forum for agreeing principles on issues such as the taxation of multinational companies, debt relief for the poorest countries and coordination during the COVID-19 pandemic. Progress is uneven and commitments are not always fully met, but the G20 provides a venue where such deals can be struck.

What are the main criticisms of the G20?

The G20 is regularly criticised on several grounds. Because it is self-selected, it can be seen as an exclusive club that leaves out most of the world’s nearly 200 countries, even as it makes decisions affecting them. Its lack of enforcement means commitments made at summits are not always kept once leaders return home. And deep political rifts among members, on issues ranging from trade to war, can leave summits struggling even to agree on the wording of a final statement.

Even so, the G20 remains one of the few venues where the leaders of rival and cooperating powers sit at the same table each year. Its value lies less in binding rules than in the habit of dialogue and the coordination it can produce when major economies decide that acting together serves their interests better than acting alone.

Sources

• G20 official website — About the G20
• World Economic Forum — What is the G20 and why does it matter?
• OECD — The OECD and the G20
• NPR — G20 makes the African Union a permanent member

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