Bigger Role for G-20 Elevates Emerging Market Nations

There was a major development at last week's G-20 meeting in Pittsburgh, and it wasn't the protests or pronouncements on climate change. Perhaps the most significant development to come from the meeting was the recognition that this group, the G-20, is now the most relevant forum in the world for coordinating world economic policy. This bigger group, including major "emerging market" countries, thus supplants the more restricted G-8 that covered only the biggest industrial nations.

Specifically, the G-8 consists of Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States. The European Commission (EC) attends as well, but in an advisory capacity. In sharp contrast, the G-20 contains those countries, plus

Argentina
Australia
Brazil
China
India
Indonesia
Mexico
Saudi Arabia
South Africa
South Korea
Turkey

There are thus 19 countries, plus the EC. With the latter, a number of smaller European countries have representation. Now we have the most populous countries added to the discussions as well as several major resource producers. During the meeting, the group also decided to increase the role of these countries in the International Monetary Fund, the IMF, which provides financial support to needy nations. For a time during recent years, it appeared that the IMF might be fading, as it looked like fewer countries were subject to foreign exchange and other financial crises. Those conditions, of course, have changed dramatically and now the focus is on making the IMF's structure and work more responsive to the needs that are weighing on the world financial system.

It seems strange to congratulate a country. But this seems to us like a graduation of sorts, where the newly promoted countries are finally recognized for the stake they have in the world's welfare, as both recipients and providers of economic benefits. We're glad they're to be included in these deliberations.