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A BRIEF HISTORY OF THE G20

The G20 was created in September 1999 by the finance ministers and central bank governors of the Group of Seven (G7 - comprising Canada, France, Germany, Italy, Japan, United Kingdom, and the United States). Their idea was to establish “a new mechanism for informal dialogue” with a view to “broaden the dialogue on key economic and financial policy issues among systemically significant economies and promote co-operation to achieve stable and sustainable world economic growth that benefits all”. The G7 chose Paul Martin, Canada’s finance minister at the time, to be the G20’s first chairman.

The creation of the G20 came in response to the Asian financial crisis of 1997 which started off in Thailand and rapidly spread to other Asian countries before spilling over to Russia and Latin America in 1998. By the end of 1999, large parts of Asia had already bounced back but it was clear that efforts to restore global financial stability would require increased cooperation between advanced and emerging economies. The crisis, and its rapid spread from one region to another, revealed important vulnerabilities in the international financial system and exposed the risks associated with the increasing integration of global economic and financial markets.

The first meeting of the G20 took place in Berlin on 15-16 December 1999 and brought together the finance ministers and central bank governors of 19 countries, including all G7 countries, Australia, Russia and 10 emerging countries which had been identified as “systemically significant economies” (Argentina, Brazil, China, India, Indonesia, Korea, Mexico, Saudi Arabia, South Africa and Turkey). A first priority for the group was to identify ways to prevent new financial crises. A consensus emerged that countries could substantially reduce their vulnerability to crises by implementing sound national policies in key areas such as exchange rate arrangements, public and private sector debt management, and financial sector regulation and supervision.

Over the years, the G20 gradually shifted its focus from crisis prevention and resolution to longer-term economic and financial issues. In the early 2000s, the G20 finance ministers looked into the challenges raised by globalization and the liberalization of financial markets. In 2002, they started to include aid and development matters in their work programme. In 2003, the group focused on
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sovereign debt restructuring, a key area in the relationship between advanced and emerging economies. In 2005, the G20 took up the issue of improving the voice and representation of fast-growing emerging economies in the governance structure of the International Monetary Fund (IMF) and the World Bank.

In its 12 years of existence, the G20 grouping of finance ministers and central bank governors has claimed a number of accomplishments³. One important achievement is the role it has fulfilled in helping advanced and large developing countries reach a better understanding of the growing interactions between their economies. The G20, while not a decision-making body, has also steered the adoption by G20 countries of substantive policy measures at national and intergovernmental level:

• In line with the G20’s recommendations, emerging economies have increasingly pursued prudent macroeconomic policies and have taken measures to strengthen their domestic financial systems.
• The G20 played a key role in popularizing the use of collective action clauses in sovereign bond contracts issued by emerging economies.
  These clauses provide a framework that facilitates the process of debt restructuring in the event the debtor country cannot honour its commitments.
• The G20 endorsed the Action Plan on Terrorism Financing aimed at cutting access to financial resources for terrorist organizations.
• The G20 played a decisive role in the IMF’s 2006 quota reform to increase the participation of most seriously under-represented developing countries.

The ability of the G20 to foster greater international cooperation in areas such as improving exchange rate arrangements and reducing global macroeconomic imbalances has proven more limited. In particular, the action of G20 finance ministers did not prevent the global financial crisis of 2008-2009, which ironically began in the world’s most advanced economy, the United States. However, the relative resilience of emerging economies to the crisis can be partly attributed to the reforms which they have undertaken under the impulse of the G20 over the last 10 years.

In October 2008, US President George W. Bush invited the political leaders of the G20 countries to a summit in Washington D.C. to explore ways to resolve
[Page18:] the worst economic and financial crisis since the 1930s. While the invitation originated from the White House, the idea of a “leaders summit” initially came from UK Prime Minister Gordon Brown and French President Nicolas Sarkozy. The two European leaders thought that the risk of a global economic meltdown warranted political action at the highest possible level. Based on their assessment of the causes of the crisis, Brown and Sarkozy made calls for the advent of a “new Bretton Woods”, in reference to the historic economic and monetary conference of 1944 which gave birth to the post-World War II international economic and financial system.

The first G20 summit, entitled the Summit on Financial Markets and the World Economy, took place on 15 November 2008. At the meeting, the G20 leaders agreed on a common response to stabilize the financial system and established a roadmap for the reform of financial markets. This was the third international gathering in less than six weeks entirely dedicated to the financial crisis. On 10 October, finance ministers and central bankers of the G7 had met in Washington D.C. On 8-9 November, the finance ministers of the G20 had held their annual meeting in Sao Paulo, Brazil.

The rationale for organizing a G20 summit in addition to the regular meetings of G7 and G20 finance ministers was both political and strategic in nature.

First, only a meeting at heads of state and government level could provide the necessary political impetus for G20 nations to take bold policy measures in response to the crisis. By nature, heads of state and government possess a political legitimacy and a capacity for domestic agenda-setting which finance ministers alone do not have.

Second, participation at the highest political level gave a strong signal to international markets that the world’s major economies were acting in concert and were determined to take all necessary action, including unconventional policy measures, to stem the financial crisis and restore economic growth.

Third, convening a G20 summit was seen as a way to avoid a the “free rider” situation which threatened to paralyze action by G20 nations during the crisis. Without certainty about their economic partners’ response to the crisis, G20 governments were hesitant at first to introduce their own stimulus measures. Their fear was that such measures, financed by their taxpayers’ money, would benefit other economies, including those which had abstained from taking any stimulus action. In a global economy where markets are increasingly interdependent, the G20 fostered international coordination and helped create the conditions for all G20 countries to synchronize their actions and mutually benefit from each other’s rescue measures.
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In his invitation to the first G20 summit in Washington D.C., US President George W. Bush assigned two main tasks to his counterparts from G20 nations: to “discuss” the financial crisis and to “agree on a common set of principles for reform” of the world’s financial sectors.

The Leaders Declarations from the Washington Summit (November 2008) and the London Summit (April 2009) placed clear emphasis on the group’s prime mission to restore financial stability and market confidence in the global economy. To fulfil their common mission, G20 leaders agreed to meet every six months and review progress made in implementing their commitments.

The Pittsburgh Summit (September 2009) marked a turning point in the G20’s mandate. At Pittsburgh, G20 leaders strengthened the group’s institutional foundation by extending its remit to longer-term macroeconomic issues. They agreed to meet twice in 2010 and to meet annually thereafter. The G20, in its current form, was born.

By designating itself in Pittsburgh as the “premier forum for our international economic cooperation”, the G20 provided further clarity about its institutional role:

• As the “premier” forum, the G20 acts as a global leadership group which sets direction but operates in close association with international rulemaking bodies, such as the Bretton Woods institutions.
• By calling itself a “forum”, the G20 emphasized its informal nature, in which members discuss on an equal and cooperative basis, and where decisions are reached by consensus and not by voting.
• By choosing to focus on “international economic cooperation”, it broadened its agenda to long-term economic and financial issues, while making it clear that it will stay away from global political and security affairs, which remain the prerogative of traditional institutions such as the United Nations Security Council and the G8 (the G7 plus Russia).
• By specifying that it would act as a forum for “our” international economic cooperation, the G20 stressed that its members do not speak on behalf of anyone other than themselves⁴.

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At the Cannes Summit (November 2011), the G20 clearly proclaimed its nature to be a “Leader-led and informal group” which is “part of the overall framework of international governance”. The Cannes Declaration reaffirmed the group’s focus on “broad global economic challenges” and its overall objective to “generate the political agreement necessary to tackle the challenges of global economic interdependence”.

THE G20 MEMBERSHIP

The members of the G20 are 19 countries and one regional grouping, the European Union:

The current composition of the G20 was determined at the time of its creation in 1999 by G7 finance ministers, and has not evolved since then. While there were no formal criteria for selecting the countries that would be invited to join the group, the G7 took three broad considerations into account when drawing up the list of G20 members.

First, the original mandate of the G20 specifically indicated that its members should be “systemically significant economies”. Systemically significant economies can be defined as those whose macroeconomic and financial conditions have a large impact on the world economy and the global financial system because of their size, structure and regional influence.

Second, the decision to have 20 members in the group was the result of a careful balancing act between the advantages of a small and manageable body – to encourage frank and open discussion and a speedy decision-making process – and the need for the group to be legitimate and representative of the global economy.
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Third, the G20 should be geographically balanced in its composition. Every region of the globe should be represented and the group’s regional distribution should broadly reflect the economic weight of each region.

Out of the 19 countries that make up the G20:

• Three are from North America (Canada, Mexico and the United States)
• Two are from South America (Argentina and Brazil)
• Four are from Europe (France, Germany, Italy and the United Kingdom)
• One is from the Middle East (Saudi Arabia)
• One is from Africa (South Africa)
• One is from Oceania (Australia)
• Two are from South and South East Asia (India and Indonesia)
• Three are from East Asia (China, Japan and South Korea) and
• Two have territories that span Europe and Asia (Russia and Turkey).

The Group’s 20th member is the European Union, which is represented at G20 summits by the President of the European Council and the President of the European Commission.

Contrary to popular perception, the G20 does not exactly represent the world’s biggest 20 economies. Only 16 of the 19 countries in the G20 actually belong to the top 20 world economies, whether measured by nominal GDP or by GDP adjusted for purchasing power parity (PPP). Three G20 nations - Saudi Arabia, Argentina, and South Africa - are currently out of the top 20 league and respectively rank 23rd, 27th and 28th in terms of nominal GDP (see tables 1 and 2).

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Nor can the G20 be described as the club of the 20 richest countries of the world. A look at the ranking of G20 members by GDP per capita, or according to the Human Development Index, reveals the wide variance of living standards across G20 countries (see table 3 and 4). Many small states, such as Qatar, Luxembourg or Singapore, enjoy higher GDP per capita than all G20 countries but are not G20 members precisely because their overall GDP is too small for their economies to be considered “systemically significant” on a global scale.

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Several large economies are missing from the G20. The biggest one is Spain, which is not a member of the G20 despite being the world’s 13th largest economy in 2010 and home to some of the world’s largest financial institutions. However, Spain has benefited from a status of “permanent invitee” to the G20, and the Prime Minister of Spain has participated in all G20 summits to date.

The Netherlands is the second largest economy not to be a formal member of the G20. While the Dutch Prime Minister participated in the first four G20 summits as a guest, South Korea decided not to extend an invitation to the Netherlands for its Seoul Summit in November 2010 on the grounds that Europe was already well represented in the G20. In addition, the European Union (EU),
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which has a permanent seat at the G20 table, is considered to represent the collective interests of all EU member states.

Other economic heavyweights which are not in the G20 include Switzerland, a major financial center, Taiwan, whose participation in the G20 would be unacceptable for China, and Norway, one of the world’s largest energy exporters and a major provider of official development assistance.

Saudi Arabia, Argentina and South Africa earned their seat at the G20 at the time of its formation in 1999. The decision to invite Saudi Arabia and South Africa to the G20 was largely the result of the G7’s desire to have all the world’s economic regions represented in the group. Saudi Arabia, as the largest economy in the Arab world, was a natural choice for the Gulf and Middle East. Its status as the world’s second largest oil producer and the world’s fourth largest holder of foreign exchange reserves makes its participation in G20 discussions particularly relevant. South Africa, for its part, is Africa’s largest economy and the continent’s largest financial market.

When Argentina was invited to join the G20 in 1999, the country was undergoing a severe economic crisis which culminated at the end of 2001 in the government’s decision to freeze bank deposits and to default on its external debt in 2002. Argentina’s ability to borrow from international debt markets remains extremely constrained to this day. Some voices have criticized Argentina’s inclusion in the G20 membership, noting that Argentina is the only G20 nation which has failed to fulfill its obligations towards international investors. However, Argentina is still South America’s second largest economy and has managed to restructure a significant portion of its debt. It is also a major exporter of agricultural commodities and a key partner in G20 discussions on global food price volatility.

The following intergovernmental organizations play an active role in the G20 process and take part in G20 summits on an ex officio basis:

• The International Monetary Fund (IMF), represented by its Managing Director. The IMF is the intergovernmental organization which is the most directly concerned with the G20’s deliberations and decisions. As an economic forecaster and a policy adviser, the IMF has helped G20 governments shape their fiscal and monetary response to the 2008-2009 global financial and economic crisis. As a global lender and a liquidity provider, the IMF has supported countries affected by the crisis and contributed to stop the propagation of the global credit crunch. As a monitoring body, the IMF provides technical analysis for
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  the implementation of the Framework for Strong, Sustainable and Balanced Growth, a major G20 initiative launched at the 2009 Pittsburgh Summit to help G20 nations evaluate the collective consistency of their domestic economic policies.
• The World Bank, represented by its President. The World Bank played a central role in the G20’s global response to the economic crisis by significantly expanding its financial and technical support to developing and least-developed countries. The World Bank’s expertise in pro-growth macroeconomic policies, agricultural development, infrastructure, climate change, and poverty reduction, largely contributes to the G20’s work on its long-term agenda. Together with the IMF, the World Bank also runs the Financial Sector Assessment Program (FASP), which the G20 has designated a key instrument to assess the health and stability of its member countries’ financial sector.
• The United Nations (UN), represented by its Secretary-General. The participation of the UN in the G20 process is essential to provide a voice to the 173 UN member states that are not directly represented in the G20. In an interview for the Canadian press ahead of the Toronto Summit in June 2010, the UN Secretary-General described his role at G20 summits as “the defender of the defenseless, and the voice of the voiceless”⁵. The UN’s universal membership and its leading role in support of the Millennium Development Goals give the organization a natural authority to represent the interest of low-income countries in G20 deliberations. Through its specialized agencies, the UN also contributes expertise in key areas of the G20 agenda, including green growth, food security, and global trade and investment.
• The Financial Stability Board (FSB), represented by its Chairman. The FSB was established by the G20 at the London Summit in 2009 as a successor to the Financial Stability Forum. The FSB brings together the national financial authorities of 24 countries (namely, treasuries, central banks and supervisory agencies), international standard-setting bodies (such as the Basel Committee on Banking Supervision and the International Accounting Standards Board), and international financial institutions (including the Bank for International Settlements and the IMF). With a mandate to assess vulnerabilities affecting the global financial system and to promote co-ordination among authorities responsible for financial stability, the FSB works in close coordination with the IMF on the implementation of the various G20 decisions aimed at reforming the financial sector.
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• The World Trade Organization, represented by its Director-General. The WTO has participated in all G20 leaders summits since the London Summit of 2009. As the guardian of the multilateral trading system, the WTO feeds into G20 discussions on maintaining an open global economy, fighting protectionism, and ensuring the availability of trade finance. At the request of the G20, the WTO - in collaboration with the Organization for Economic Cooperation and Development (OECD) and the UN Conference for Trade and Development (UNCTAD) - monitors and reports publicly on G20 countries’ adherence to their undertakings on resisting protectionism and promoting global trade and investment.
• The Organisation for Economic Development and Cooperation (OECD), represented by its Secretary-General. The OECD, as an international organization of 34 advanced economies, provides analysis and policy recommendations to the G20 and has participated in all G20 summits since the London Summit in April 2009. The OECD contributes to G20 discussions on improving employment and social policies, combating tax evasion, fighting corruption and money laundering, phasing out fossil fuel subsidies, mitigating food price volatility, and increasing the effectiveness of development assistance. The OECD also provides a channel for non-G20 industrialized countries, such as Switzerland, the Czech Republic and New Zealand, to participate in the G20 process.
• The International Labour Organization (ILO), represented by its Director-General. The ILO, as a specialized and tripartite UN agency with representatives of governments, employers and workers from 183 countries, plays a key role in advising the G20 on its commitment at the Pittsburgh Summit in September 2009 to put “quality jobs at the heart of the recovery”. At its London Summit in April 2009, the G20 recognized “the human dimension to the crisis” and called upon the ILO to report on employment and social protection policies of G20 members. At their Pittsburgh Summit, G20 countries committed themselves to adopt key elements of ILO’s Global Jobs Pact, a set of measures which countries can take to ease the impact of the crisis and accelerate recovery in employment. The ILO is also closely involved in the work and meetings of G20 labour and employment ministers.

In addition, the following regional organizations are now routinely invited to G20 summits:

• The Association of South East Asian Nations (ASEAN): Founded in 1967, ASEAN is a political and economic regional organization comprising 10 member states: Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. ASEAN is represented at G20 summits by its rotating Chair (Vietnam in
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  2010, Indonesia in 2011) and its Secretary General. ASEAN has a lot of experience to share with the G20. The region overcame a severe financial crisis in 1997-1999 and restored high levels of growth through a mix of government support and market-based policies. The G20 also benefits from ASEAN’s experience in developing innovative policy instruments, such as the Chiang Mai Initiative, a regional financial safety mechanism which ASEAN established together with China, Japan and South Korea, and the ASEAN Infrastructure Fund, which is aimed at supporting infrastructure projects in the region.
• The African Union (AU): Launched in 2002 as a successor to the Organization of African Unity, the AU supports the political and economic integration of its 53 member states. Among its key missions, the AU promotes peace and security in Africa, defends the sovereignty and independence of its member states, and works to increase Africa’s regional and global economic integration. The AU is represented at G20 summits by its Chair, who is chosen every year by the AU Assembly and serves a one-year term. The AU Chair for 2011 is the President of Equatorial Guinea.
• The New Partnership for Africa’s Development (NEPAD): NEPAD is a programme of the African Union aimed at promoting economic development in Africa and increasing trade and investment within Africa, and between Africa and the rest of the world. It was launched in 2001 at the initiative of South Africa, Algeria, Egypt, Nigeria and Senegal. NEPAD is represented at G20 summits by the President of its Heads of State and Government Orientation Committee, a function currently held by the Prime Minister of Ethiopia.
• The Gulf Cooperation Council (GCC): Created in 1981, the GCC is a political and economic union of six Arab states from the Arabian Peninsula: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Also known by its official name, the Cooperation Council for the Arab States of the Gulf, the GCC promotes coordination and integration between its member states on a wide range of economic and scientific issues. The GCC is represented at G20 summits by the President of its Supreme Council, a function currently held by the President of the United Arab Emirates.

Together, the G20 nations represent the lion’s share of the world economy. They account for 85% of global GDP, about 80% of global trade, and two thirds of the world’s population. The G20 includes 13 of the 20 nations with the largest foreign exchange reserves in the world. The presence of several emerging
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economies with large populations among G20 members also means that the majority of the world’s extreme poor (who live on less than USD 1.25 per day) live in G20 countries⁶.

The G20 can be said to be representative of the world economy in the sense that its composition broadly reflects the relative economic weights of each of the world’s major regions and that each of those regions is represented in the group. In addition, the G20 systematically invites to its summits the representatives of several regional and international organizations whose memberships far exceed that of the G20.

The G20’s representativeness is far from absolute, however. Several parts of the world, such as Central Asia, North Africa and the Caribbean, are almost absent from the G20 process. None of the world’s 48 least-developed countries (LDCs) are formally represented in the G20, although the African Union and the Association of South East Asian Nations, whose memberships include a large number of LDCs, are now regularly invited to G20 summits.

The G20’s representation deficit has steered debate over its legitimacy as the “premier forum” for international economic cooperation. Criticism of the G20’s legitimacy has mainly focused on the “input” dimension of the G20 process. For a number of academic scholars⁷, the G20’s “input” legitimacy is challenged by the fact that members of the G20 were hand-picked by the G7 without any explicit criteria, and that formal G20 members and non-G20 invited guests (who collectively represent the world’s remaining 173 countries) do not participate in G20 deliberations on an equal footing. The inability of the G20 to embrace the views and interests of the entire global community is seen by some as problematic since the actions and decisions of the G20 have implications beyond its membership.

Other concerns which have been expressed about the G20 include its lack of accountability and the risk of undermining other global and more inclusive processes, such as the UN and the Bretton Woods institutions, where small and poor countries have a bigger voice and influence on issues that directly affect them. In an interview with the German press in 2010, Norway’s foreign affairs minister, Jonas Gahr Støre, voiced the concern of smaller nations by describing the G20 as “the greatest setback for the international community since World War II”⁸.
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Promoters of the G20 have instead focused on the “output” dimension of the G20 process. By involving a few major actors in an informal setting, the G20 provides a useful platform to help advance policy discussions and tackle political gridlocks on global issues, such as financial sector reform and climate change. Rather than undermining or supplementing multilateral institutions, the G20 is seen by its supporters as a much-needed source of political leadership and energy to promote international economic cooperation within the broader framework of the UN, the WTO, and the Bretton Woods institutions. Advocates of the G20 process also stress the G20’s adaptive capability and its ability to engage with relevant international and regional organizations in the pursuit of global policy objectives. In their view, the G20’s legitimacy does not derive from its composition but from its capacity to promote and support multilateralism.

NON-G20 PARTICIPATION IN THE G20 PROCESS

The G20 responded to allegations of lack of legitimacy and representativeness by introducing and institutionalizing a flexible “G20+5” arrangement at the Seoul Summit in November 2010:

Excerpt from the Seoul Leaders’ Declaration, November 2010

“Bearing in mind the importance of the G20 being both representative and effective as the premier forum for our international economic cooperation, we reached a broad consensus on a set of principles for non-member invitations to Summits, including that we will invite no more than five non-member invitees, of which at least two will be countries in Africa.”

The host country of the G20 summit is charged with drawing up the list of the five non-G20 guests. The practice has been to convene the heads of state and government of the countries which currently hold the presidency or chairmanship of the four main regional organizations associated with the G20 process, in addition to the Prime Minister of Spain who has benefited from a status of “permanent invitee” so far.

Over time, the heads of government and state of the following non-G20 nations have been invited to participate in G20 summits:

• The Prime Minister of Spain has participated in all G20 summits to date.
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• The Prime Minister of the Netherlands participated in the first four G20 summits in Washington, London, Pittsburgh and Toronto.
• The Prime Minister of the Czech Republic participated in the London Summit in his capacity as rotating President of the European Council of the European Union.
• The President of Ethiopia participated in the London Summit and subsequent G20 summits as Chair of NEPAD.
• The President of Malawi represented the African Union at the Toronto Summit.
• The President of Equatorial Guinea represented the African Union at the Cannes Summit in November 2011.
• The President of Vietnam represented the Association of South East Asian Nations at the Toronto and Seoul summits.
• The Prime Minister of Singapore represented the Global Governance Group at the Seoul and Cannes summits.
• The United Arab Emirates represented the Gulf Cooperation Council at the Cannes Summit.

In parallel to the “G20+5” arrangement, several initiatives have been taken by individual non-G20 countries and groups of non-G20 countries that seek to play a bigger role in the G20 process.

In 2009, a new coalition - the Global Governance Group (3G) - was formed to help non-G20 nations engage in the G20 process. Established at the United Nations Headquarters in New York, and created on the initiative of Singapore, 3G is an informal gathering of 28 smaller non-G-20 nations which channel their views on global governance matters to the G20. Since the Seoul Summit in November 2010, the Prime Minister of Singapore has been invited to represent 3G at G20 summits.

The member states of the 3G are:

• Six countries from South East Asia and Asia Pacific (Singapore, Malaysia, Brunei, the Philippines, New Zealand and Vietnam)
• Three from the Middle East (Bahrain, Qatar and the United Arab Emirates)
• Three from Africa (Rwanda, Senegal and Botswana);
• Eight from Europe (Sweden, Belgium, Ireland, Luxembourg,Switzerland, Liechtenstein, Monaco and San Marino);
• Two from South America (Uruguay and Chile); and
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• Six from Central America and the Caribbean (Costa Rica, Guatemala, Panama, Jamaica, Barbados and Bahamas).

In March 2010, 3G issued a statement to the UN Secretary-General entitled Strengthening the Framework for G20 Engagement of Non-Members. In the document, 3G welcomes the swift and decisive actions of the G20 to address the financial crisis but calls for the development of “appropriate mechanisms” for the G20 to become “more consultative, inclusive and transparent”. 3G reaffirms the supremacy of the UN as “the only global body with universal participation and unquestioned legitimacy” and pleads for a G20 process which complements and strengthens the UN.

Two other examples of initiatives aimed at reforming the G20 process or expanding its membership include a call by former senior ministers of Chile, Columbia and Peru to introduce rotating seats at the G20 table for underrepresented regions and sub-regions⁹, and a proposal by the Dominican Republic for emerging economies that are members of the G20 to consult with their regional partners in advance of G20 summits¹⁰.

The role of business in the G20 process is explicitly acknowledged by the G20 and has gained further prominence since the decision to hold an official G20 Business Summit (B20 or “Business 20”) in conjunction with the Seoul Summit of heads of state and/or government in November 2010. A second B20 summit took place on 2-3 November 2011 on the occasion of the Cannes Summit¹¹.

Excerpt from the Seoul Summit Document, November 2010

“Recognizing the importance of private sector-led growth and job creation, we welcome the Seoul G20 Business Summit held on November 10 and 11 that convened global business leaders under the theme “The Role of Business for Sustainable and Balanced Growth”. We look forward to continuing the G20 Business Summit in upcoming Summits.”

In addition to the role of business as a stakeholder in the G20 process, the G20 has stressed on several occasions the important function of business in
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supporting growth and job creation and in restoring confidence. At the London Summit in April 2009, the G20 encouraged the “corporate responsibility of all firms” and called for the development of sustainable compensation schemes for corporate executives. At the Pittsburgh Summit in September 2009, the G20 stressed the need “to shift from public to private sources of demand” and recognized the role of businesses “to support the efficient allocation of resources for sustainable economic performance”.

With the G20’s increased focus on long-term economic issues, business is expected to play a growing part in shaping the G20 agenda and helping to identify practical solutions to global economic challenges which the G20 has decided to address, such as fostering job creation, addressing infrastructure deficits, combating corruption and mitigating food price volatility.

In addition to business, G20 leaders have recognized the need to reach out to broader constituencies, including trade unions and representatives of civil society.

Excerpt from the Seoul Leaders’ Declaration, November 2010

“We recognize, given the broad impact of our decisions, the necessity to consult with the wider international community. We will increase our efforts to conduct G20 consultation activities in a more systematic way, building on constructive partnerships with international organizations, in particular the UN, regional bodies, civil society, trade unions and academia.”

Under the umbrella of the International Trade Union Confederation (ITUC) and the Trade Union Advisory Committee (TUAC) to the OECD, labour leaders from G20 countries and beyond have issued “Global Unions’ statements” to G20 leaders to press their views on employment, development, climate and financial regulation.

On the margins of the G20 summit in Cannes, trade union representatives from G20 countries (increasingly referred to as L20 or Labour 20) and business organizations participating in the B20 summit published for the first time a joint statement¹² to express their shared concern over the employment situation and their joint interest in the strengthening of social protection floors and the protection of fundamental rights at work.
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Non-governmental organizations (NGOs) from global civil society have also taken an active role in seeking to influence the G20 agenda and decisions. Leading voices include the Global Call to Action against Poverty, a coalition of NGOs and trade unions from over 100 countries, the ONE campaign, which focuses on Africa, and the UNCAC Coalition, which brings together over 240 NGOs with an interest in the fight against corruption.

While the NGO community is extremely diverse in its approaches and advocacy strategies, a number of key messages and proposals have emerged from prominent civil society campaigns:

• A call for the G20 to introduce a coordinated financial transactions tax - also referred to as the “Robin Hood tax” - to finance development aid, protect public services and fight climate change¹³.
• The need for the G20 to tackle the global food price crisis by taking measures to curb speculation in commodities markets, ending biofuel subsidies, and investing in small-scale food production.
• A request for further G20 action to end tax haven secrecy by requiring companies to report on the profits made and taxes paid in countries in which they operate¹⁴.

In addition, several G20 summits have been met by massive street demonstrations. A march for “jobs, justice and climate” organized by an alliance of trade unions and environment, charity and faith groups attracted 35, 000 people ahead of the London Summit in April 2009. Under the slogan “People First, Not Finance”, trade unions and activists have organized protests and counter-summits ahead of the Toronto, Seoul and Cannes summits to denounce cuts in public spending and call for alternative policies on jobs, labour rights, financial regulation and climate change.

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