The developing countries will now play a more significant role in the economic policies of the world. The ultra-elite club of the richest industrial nations known as G7 will relinquish its top level global economic forum to the much broader G20 that includes the emerging economies and developing countries such as China, Brazil, and India.

The recent development is in recognition of the ‘growing economic importance of Asia and some Latin American countries, particularly since the United States and many European countries have found their banking systems crippled by an economic crisis originating in excesses in the American mortgage market.’

Over the past thirty years, the G7, composed of the countries of the United States, Britain, Canada, France, Germany, Italy and Japan, was the main economic group. Russia was eventually added to the short roster.

The move is a much-needed break for the emerging economies whose main concerns have been monumental, an example of which is eliminating trade barriers especially in politically sensitive sectors like agriculture.

There are criticisms to the move: ‘Proponents of the smaller group say the friendships it fosters are important when friction arises in the group or outside it in one-on-one policy disputes between nations. They also point to complications that arise when 20 countries with vastly different economies try to reach agreement on setting exchange rates or other complex financial questions.’

On the other hand, those who support the broadening of the global economic forum say that ‘the emerging nations, and the huge slice of the world’s population that they represent, must have a seat at the table to debate not only economic issues, but also environmental issues like climate change.’

Via The New York Times