The G-20 was established in the late 1990s comprises of twenty central bank governors and finance ministers. It systematically brings together significant developing and industrialized economies to a forum from which they can be able to discuss important issues affecting the global economy. The foundational meting of the group of twenty was held in Berlin, back in the year 1999. It was hosted by both Canadian and German finance ministers. The group of twenty is basically a forum which is informal that seeks to promote constructive and open discussions between countries that are emerging as viable markets and the industrial nations.
The forum enables the members to issues concerning the stability of the global economy. They achieve this particular objective by contributing significantly to the strengthening of the structures of the international financial institutions. They also provide numerous opportunities for open dialogue on issues various national policies, financial institutions which are international and international cooperation, the group of twenty assists in supporting development and growth across the entire world (Hajnal, 2007).
Benefits of G 20 to the member countries The economies of the developing countries benefit significantly from G 20; they are usually assisted to expand their economies so that they can be in a position to appropriately counter the policies which are cyclical. The G 20 has in several instances injected trillion of dollars to the economy of the entire globe through the countries involved in an attempt to assist the middle and the low income nations.
The bulk of such money is channeled through the international monetary fund which in turn distributes the same to the developing nations according to their needs which are in line with the intended growth and development as per the standards of the G 20 and IMF. Funds channeled through the IMF account for about seventy percent of all the funds that are injected to these countries by the G 20. The rest of the funds will be injected into the world economy only if the countries that are members to the G 20 make use of such funds (Kirton, 2008).
In order to respond appropriately to the global economic challenges, the G 20 usually injects additional funds to the developing countries and the emerging markets during such hard economic periods so as to prevent them from having their economies being adversely affected by such economic hardships. The countries involved in the G 20, are also helped by it to counter spending which is cyclical, infrastructure, bank recapitalization, support in balance of payments, trade finance, rollover of debts and other social support programs (Kirton, 2008).
The economies of the countries involved in the G 20 are usually assisted through international financial institutions. The G 20 assists the world financial markets during periods when they are faced with serious challenges which are of a global nature and in cases where the crisis is very severe and the uncertainties involved in such crisis indicate the need to take actions urgently in order to arrest the situation.
Such assistance enables the countries involved to be in a position to recover from global economic challenges and thus be able to secure growth and development that is sustainable in the long run (Samans, Uzan, Claros, & World Economic Forum, 2007). The economies of the countries under the G 20 umbrella benefit a lot from it since they are usually assisted in ensuring that their economies are stable and that they are not shaken and destabilized adversely global economic cycles especially during the periods of global recession.
The G 20 also offers financial stability to the financial institutions of various institutions and offers more macro economic assistance to the member countries. At the same time the group of twenty has committed itself towards maintaining investments and open trade so as to prevent instances of retreating to protectionism. The G 20 directs any support that is very necessary to the developing nations and emerging markets so as to ensure that they continue playing a significant role in the global economy (Hajnal, 2007).
In order to move beyond certain economic crisis the G 20 has laid a good foundation for the member countries so that they can be capable of over coming economic challenges such as global recession. Such a foundation enables the member nations to recover safely from the difficult periods of economic challenges and thus be able to grow and develop economically in a manner which is sustainable both in the short run and long run. G 20 develops certain proposals that assist the member countries to restore their economic growth and also that of the entire globe in the medium term.
Such proposals include the emergency unwinding of measures that should be taken during periods of crisis (Kirton, 2008). Conclusion G 20 is a very important forum for the member countries that include the industrial nations, developing countries and the emerging markets. It helps the member countries significantly especially during periods of global economic crisis by injecting substantial amounts of funds to their economies during the periods of global recession or other financial difficulties.
This enables the member countries to realize economic growth and development that is sustainable. Reference: Hajnal, P. I. (2007): The G8 system and the G20: evolution, role and documentation; ISBN 0754645509, Ashgate Publishing, Ltd. Kirton, J. (2008): What Is the G20? Retrieved on 3rd June 2009 from, http://www. g7. utoronto. ca/g20/g20whatisit. html. Samans, R. , Uzan, M. , Claros, A. L. & World Economic Forum (2007): The international monetary system, the IMF, and the G-20: a great transformation in the making? ISBN 0230524958, Palgrave MacmillanSample Essay of RushEssay.com