WHAT IS THE G20?
The creation of the G20 dates back to the late 1990s and a decision to expand the existing Group of Seven (G7). Citing a need to “broaden the dialogue on key economic and financial policy issues” while “promoting co-operation and achieve sustainable global economic growth for all,” acting G7 ministers sought to extend the reach of group. The result was the inclusion of the world’s most influential economies, both advanced and emerging.
One of the inspirations behind the G20’s foundation was the framework put forth by the Bretton Woods Accords. In December 1999, acting G7 heads summoned “counterparts from a number of systemically important countries from regions around the world” to Berlin, Germany. Their task was to engage challenges facing the international economic and financial environment, and the invitees included leading global powers and developing nations. In addition, the meeting in Berlin featured representatives from several Bretton Woods holdovers such as the IMF and World Bank.
THE G20 LEADERS SUMMIT
key function of the G20 is the annual Leaders Summit where heads of state, central bankers and various civil and business leaders are invited to share ideas regarding global economic health. It is held over a two-day period and is the culmination of the year’s work. Following the Leaders Summit, the G20 issues a formal statement regarding its official recommendations crafted throughout the year.
The inaugural Leaders Summit was held in 2008 in Washington D.C., United States. Since that time, the periodic meeting has been held in various international locales.
The 2018 Leaders Summit was held from 30 November to 1 December in Buenos Aires, Argentina, and more than 5,000 delegates participated in more than 100 meetings focused on industry and finance.
Future venues are announced ahead of time, in a similar fashion to those of the Olympic Games. G20 Member nations rotate the honor of entertaining the Leaders’ Summit, and host cities are nominated by leadership of the president nation. For 2019, Japan was nominated to host the summit, and in 2020 the duty falls to Saudi Arabia.
WHAT IS OPEC?
OPEC stands for the Organisation of the Petroleum Exporting Countries, which is a cartel of some of the largest oil-producing nations in the world. In its early years, OPEC was able to a large degree dictate the world price of oil, making it a major political and economic player.
OPEC was created in September 1960 at the Baghdad Conference in Iraq. The five founding members were Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.
They were subsequently joined by Qatar (1961), Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Angola (2007) and Equatorial Guinea (2017). Ecuador, which joined in 1973, suspended its membership in December 1992 then rejoined in 2007. Gabon, which joined in 1975, quit 20 years later but then rejoined in 2016. Indonesia, which joined in 1962, suspended its membership in January 2009, reactivated it in January 2016, but then suspended its membership once again later that same year. As a result, the group had 14 members as of April 2018.
According to its Statute, “any country with a substantial net export of crude petroleum, which has fundamentally similar interests to those of Member Countries, may become a Full Member of the organisation, if accepted by a majority of three-fourths of Full Members, including the concurring votes of all Founder Members.”
The group’s mission “is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilisation of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.”
Although no European countries are members of OPEC, the group’s headquarters are in Vienna, where it moved in 1965 after spending its first five years in Geneva.
According to OPEC, the group’s members hold 81.5% of the world’s proven crude oil reserves (i.e., petroleum in the ground) as of 2016, or an estimated 1.2 trillion barrels. The lion’s share of that, or about two-thirds of OPEC’s total proven reserves, is in the Middle East.
Many of the world’s biggest oil producers have never belonged to OPEC, including Canada, China, Mexico, Norway, Oman, Russia, and the U.S. Many of them have responded to OPEC’s attempts to control world oil prices by exploring for and pumping more oil themselves and achieving greater market share and energy independence, which has greatly diminished OPEC’s power.