The G20, with its membership of developed and emerging economies, aims to promote constructive discussion between industrial and emerging-market countries on key issues related to global economic and financial stability.
At the Pittsburgh Summit in September 2009, leaders endorsed the G20 as the premier forum for their international economic cooperation.
The statement said: "This decision brings to the table the countries needed to build a stronger, more balanced global economy, reform the financial system and lift the lives of the poorest."
Global recession
The G20 has had a major role in helping to address the impact of the worldwide financial crisis on low income countries.
At the London Summit in 2009, G20 leaders made commitments to assist the low income countries through the crisis including $50 billion in finance from the International Financial Institutions such as the World Bank and the International Monetary Fund and commitments on social protection.
At the Pittsburgh Summit, commitments were made to increase access to food, fuel and finance among the world’s poorest and ensure that the development needs of low income countries continue to be addressed during the crisis.
Preparing for future shocks
The G20 also agreed on measures to ensure that the International Financial Institutions are prepared to respond effectively to future economic crises in the poorest countries, including exploring the benefits of a new crisis support facility at the World Bank to help get funds through to poorer countries more quickly in times of economic emergency.
The financial, food, and fuel crises which dominated 2008-2009 have had a detrimental impact on the poorest countries. Available evidence suggests that recent gains towards achieving the Millennium Development Goals (MDGs) are under threat. Due to the impact of the crisis:
- 89 million more people will be living on less than $1.25 a day by the end of 2010
- there will be 30-50,000 additional infant deaths in Sub-Saharan Africa in 2009
- anecdotal evidence suggests that the crisis may limit the planned expansion of health programmes, adversely affecting the fight against HIV and AIDS and tuberculosis, and threaten the gains made over the last few years
- there are expected to be 25 million more hungry people in Sub-Saharan Africa in 2009 compared to 2008 – an 11.8% increase
Low income countries still continue to suffer the consequences of the global recession.
The economic shock that hit low income countries was not uniform, differing substantially across countries and regions. This has had clear implications for the prospects for reducing poverty and returning to strong economic growth.
Road to recovery
It is important that the focus on the impact of the crisis in low income countries remains a high profile issue within the G20.
This means following up the commitments made at the London and Pittsburgh summits.
2010 is an important year. The G20 Summits provide opportunities to revitalise progress towards the MDGs and to reposition development within the context of building a more sustainable economy.
In Pittsburgh, G20 leaders committed to ensuring that their efforts to achieve strong, global, balanced and sustained growth also promote development and poverty reduction. Progress in low income countries will be important for fulfilling this commitment.