International organizations, even those with an intended global reach, not always have global universal membership. Among economic and financial organizations there are, beyond pure regional organizations, formal and important institutions that include only a subset of countries. Among those is clearly the OECD, a club of developed nations to which lately a number of emerging countries with a good track record have been added. Similarly, the Bank for International Settlement in Basel, a relatively old organization that sometimes is referred to as the “central bank for central banks,” has limited membership that is not necessarily based on objective criteria. The World Trade Organization is closer to universal membership, but does not have one.

At the center of the current structure of multilateralism are the two pillars of the post Second World War system: the International Monetary Fund and the World Bank. These two organizations constitute the vertebral column of the global international relationships and one of its prominent features is indeed its global, i.e., universal membership. All independent countries in the world have the right of membership in both organizations. In that sense they follow the nature of the United Nations organization to whom they formally belong. There are however two very important, perhaps crucial, differences between the membership structure in the United Nations and these financial organizations. These differences can be summarized in the concept of “constituency” and “weighted voting rights”. While in the United Nations all countries are directly represented by a delegation of each countries and all countries have their own representatives in the General Assembly, in the International Monetary Fund only a few selected countries are directly present with their own Executive Director while the majority belong to constituencies where clusters of countries are organized in groups with a single representative of the group being the Executive Director for each for the whole. Leadership of the constituency can rotate or be fixed to some extent – without clear criteria. The World Bank is similarly organized.

The second difference has to do with the weighted nature of the vote. While in the United Nations the system is one country one vote, in the financial organizations the vote of each member is supposed to represent its relative importance in the system (based on quotas that are subject to revisions from time to time). This also gives veto power to the largest member, the United States of America which has close to 20% of the vote and many decisions require 85% of the vote.

When the number of countries for membership increased in the aftermath of decolonization, nationalism that split up countries, and later the fall of the Berlin Wall, the pressure for more representation increased too. It was difficult to make decisions in real time and the risks increased that real power was slipping from the existing multilateral system and returning to bilateral or ad-hoc arrangements. To formalize the situation, or in fact to give it more credibility and in some sense more transparency, a ‘non-organization” was created back in 1975/76 that admitted to have the real power without a formal procedure but with formalised dues and duties. It was called the G7 and gathered the powers of the West (the USA, UK, France, Italy, Canada, Germany and Japan). Later on it was expanded to include (although with some limitations) also Russia to become G8, but only temporarily and Russia was “disinvited” (suspended) as part of the sanctions around the Ukraine conflict in 2014.

If you have noticed the real absent here, you are right: the emerging global giant, China, was outside the new global club and never invited even as its economic and political heft was rising rapidly since the early 1990s. From that point of view the lack of representativity of the G7 for some key emerging countries became its weakness.

By the end of the turn of the century, following the collapse of communism in Europe and the completion of decolonization, the need for a credible forum for representatives of the world economic powers to discuss and to make far-reaching decisions effectively became critical. The United Nations was considered a “talk club” in this respect without too much of a decision making—let alone implementing—capacity to fulfil such a role. And the Bretton Woods system became too specialized and not too versatile. Its weighted system was notoriously difficult to adjust to reality, leaving much of the veto or lead powers to traditional heavy weight countries beyond their real numerical quotas. The G7 remained a convenient venue but was regarded more and more illegitimate by more and more countries. The glaring absence of China was evident but the pressure from important emerging countries to have a place on the stage was also being felt. In this context the idea of creating a G7+, i.e. to enlarge the G7 to cover China and some of these important emerging countries started gaining currency.

Immense amount of time was spent to discuss various formats. Finally the debate was settled in favour of a Canadian proposal to create a “non-formal organization” that could be fast in diagnostic and origination of treatment and that can become more accepted by all, particularly by China and some “prominent and notable emerging countries evenly distributed geographically”. The problem was whom exactly and how to choose. Documentation about the debates between Canada (G7 President in 2000), the United States and Germany (G7 President in 1999), as well as the United Kingdom and France to decide who was to be invited to the first meeting and probably become a member are not yet open to the public, but be as it may, a list was drawn and 19 countries were selected: the original G7, Russia, China and 10 “important countries” with an attempt at balanced geographical coverage. Representatives of these countries were invited to the meeting in Canada in the autumn of 1999 that was not supposed to be a foundational meeting but rather a discussion about the issue. The “20” number was reached by adding as a member the European Union.

I was privileged to attend that meeting for the Argentina delegation. It was clear from the beginning of the discussion that these “gatherings” would be the beginning of a truly new, non-formal formal organization. The G20 covered 90% of the world output and by being quite manageable due to its small number. It was equally clear that the clear political representativity and the credibility of a new outfit could be useful in crises and on well- defined decisions. The problem, however, was with the absent. Important emerging countries were missing and, more relevant, important developed countries, particularly in Europe (Spain, Holland, Sweden, Switzerland) were also excluded as being represented by the EU, though it was truly not the same for them as has been repeated time and again. As usual, addressing the problem of true representation was postponed.