Friday, September 25, 2009

G8 and G20

The announcement that G-20 will supplant the G8 as the main international economic forum is a historic shift in geo-political and economic sense. Though geographically the center of gravity shifted slightly (moved into Eastern Hemisphere – see map), the key players will still have undue influence on the total Group. G8 controlled 60% of the world GDP. By embracing G20, the membership went up by 150% but the contribution of GDP went up only by a marginal 33%. Is this a tactical move played by the G8 countries to further fuel growth in their own economies? We can’t say. But one thing is sure – the Group is now more representative. G20 represents more than 66% of the world’s population vis-à-vis G8’s 14%.

We have to see how successful the G20 would be – with more members the group dynamics change and it would be difficult to building consensus.

(M represents Center of Mass)

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