G5 and G20
G5 and G20
The G5 consists of India, China, South Africa, Brazil and Mexico. It was a U.S backed European initiative and was formed to give more representation to developing countries. These countries were called as guests to G8 meetings and it was understood that this process would ultimately result in the G8 expanding to a G13. However, the global economic crisis that shrunk the growth of developed nations, powered the G20 into prominence and the consequently the G5 was discontinued. The G20 is crucial due to the growing importance of the economies of its member nations such as India, China, Brazil and South Africa.
The G20 was established as a finance ministers’ grouping in 1999, in response, mainly, to the Asian financial crisis of 1997-98. In particular, the G20 London summit of April 2009 is widely viewed as a success in terms of concrete agreements, including the expansion of IMF (international Monetary Fund) resources, a $250 billion fresh allocation of SDRs (Special Drawing Rights) and the inclusion of G20 countries in the freshly mandated Financial Stability Board (earlier Forum). Perhaps equally important, developing country leaders found the G20 summit meetings much more participatory and equal than G8+ summits.
Recently, the Finance Ministers of the G20 countries met in South Korea, three weeks before the G20 summit that is scheduled this year (2010). The ministers backed Indian Finance Minister, Pranab Mukherjee’s proposal to regulate banks instead of imposing a tax to fund future bailouts. Increasing environmental concerns might also play out better at the G20 summit with the participation of China, India and Brazil, countries that are largely responsible for growing number of emissions.
