The 10 year-old G20 group of countries is an attempt by the world financial community to include more governments in the discussion of global economic events.
The G7 group of industrialized countries, which still holds meetings, was expanded after Argentina and Mexico suffered through a currency and financial meltdown in the last years of the last decade.
At that time, public officials recognized that economic woes in developing countries could threaten the stability of the industrialized world.
Big players, big stakes
The larger group includes the usual economic suspects, such as the United States and Canada, and some still emerging — but important — players like China and India.
But in an organization that does not vote by a show of hands, consensus can only be reached by convincing countries of a proper course of action. With more voices at the discussion table, however, stalemate can become common as different economic interests collide.
International observers traced parallels between the G20 and the Doha round of trade talks at the World Trade Organization. Those trade discussions have gone nowhere for seven years as agricultural nations blocked attempts to open their markets to farm imports.
Still, if you want to figure out where the world economy is headed, listening to whatever comes out of any G20 meeting is not a bad place to start.
The answer to that question depends upon which indicator one uses.
Here, the G20's inclusion of India and China means that one out of every three people on the planet are in this group.
Of more interest, however, are the growth rates of those populations.
One economic theory is that long-term economic growth correlates closely with population increases. Thus, the faster one's population expands, the bigger the potential payoff in terms of economic growth.
For example, India's population is expanding twice as fast as China's, implying under this theory that India's economy could begin to overtake its Asian rival in short order.
The G20 includes 90 per cent of the globe's gross domestic product.
A number of the G20 countries, including Russia, India and Brazil, have passed the $1 trillion US mark in terms of economic output.
The size of an economy is dependent upon two main factors: a country's productiveness and its population.
Nations like Brazil are mildly productive but have huge populations.
|GDP (2007)||(US$ billion)|
In terms of overall economies, comparisons are tricky, since countries measure their national incomes in different currencies. Sometime, things get lost in the currency translation.
One way around this estimation problem is to use the most recent figures available and turn them into U.S. dollar amounts. Using the International Monetary Fund's estimates, the range of per-capita income is wide.
|2008 GDP per capita||(US$)|
France, Canada, the U.S. and the U.K. are at the top end of the scale. Down at the bottom of this list are China, with output per person at $3,180 US, and India, at $1,043.
Measuring the productiveness of a nation, however, is fraught with statistical danger.
Output per capita is a measure of an economy at a single point in time, whereas some economists argue that the important indicator is growth rate in productivity per capita.
In that category, American business usually pounds its international competitors.
Here is where the non-voting nature of the G20 can run into trouble in future meetings.
So far, the usual G8 players are driving the debate. In the coming years, however, developing countries are set to grow faster than Canada, the United States and northern European nations. The influence of these rapidly growing nations within this organization might increase as well.
|GDP growth rate||2009 (%)|
With such differing growth, different nations might approach economic problems from different angles.
China, for example, just instituted a $586 billion US stimulus package for building domestic infrastructure. China's growth profile for next year, however, could indicate a country less concerned about falling GDP growth in 2009 than perhaps Canada, at 1.1 per cent, or the United States, at 0.06 per cent.