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The G20 Montreal Ministerial Meeting:
A Report on Globalization

Aaron Gairdner
G8 Research Group
Montreal, October 25, 2000

The G20 - an international political forum comprising the finance ministers and central bank governors of the world's leading industrialized countries and emerging markets - is evolving into a strong institution parallel to more insular G7/8 summit. Long seen as a key centre of global governance, the G7/8 has suffered from criticism that it does not represent the global community. In contrast, the small but highly representative G20 brings a new sense of legitimacy to the G7/8 centre of global governance for the international financial and economic system. This new sense of legitimacy is borne out in the G20's full engagement with issue of globalization.

The G20 consists of 20 "systematically significant" countries from every continent, plus the European Union and representatives from the IMF and World Bank. They account for roughly 85% of the world's GNP, 65% of the world's population, and 60% of the world's poor. At the G20 meeting in Montreal on October 24 and 25, 2000, finance ministers and central bank recognized that "the increasing integration of national economies resulting from the greater international mobility of goods, services, capital, people, and ideas" provides both opportunities and challenges for countries. Furthermore, although the process of globalization "has deep historical roots, it has been accelerated in recent years by unprecedented technological change, the increasing universality and acceptance of market-based economic systems, and the liberalization of international trade and capital movements."

The benefits of globalization were viewed as "providing people and societies around the world with an unparalleled opportunity to achieve sustained and broad-based improvements in living standards through participation in world trade, further trade liberalization by all countries, including improved access for developing countries' exports to advanced economies' markets, access to cheaper consumption and capital goods, integration into international capital markets, and openness to technological change and innovation." Finance ministers and central bank governors further reaffirmed the view that "the economic integration that is at the heart of globalization can continue to be an enormously powerful force contributing to improving the lives of hundreds of millions of people in industrial, transition, and developing countries alike, giving them greater access to goods, capital and ideas - and thus a much greater capacity to achieve rapid and enduring growth in the living standards of their citizens, and to attack income inequalities and reduce poverty."

The challenges of globalization, on the other hand, were viewed as the "rise to economic difficulties and social dislocations." Finance ministers and central bank governors stressed that "governments have an important role to play in formulating and implementing policies to promote financial and economic stability and harness the benefits of globalization." They noted "that putting in place the right frameworks and policies for promoting a globalization process that works well for all of its participants will be the key challenge for the international community in the 21st century."

The G20 chair, Canada's Paul Martin, noted that the 2000 meeting was "unique" because the free-flowing dialogue "dealt with areas that have not been the usual subject of discussion among finance ministers and central bank governors." This was a recognition that financial issues and global issues such as the environment are intricately linked in what Martin labelled the Montréal Consensus. In summary, the G20 tackled the difficult subject of globalization, albeit on a simplified and general level. However, the G20 has pioneered a significantly broader agenda far beyond financial management, likely laying the foundation for an enhanced G20 role in global governance. The potential of this increased global role is ideally suited to the G20's small membership and its representative quality.

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