Getting the G-20 right.

It’s welcome news that the G-7 club of Europe, North America, and Japan (the G-8 with Russia included) has evolved into the more representative G-20, now having just concluded its second summit in six months. While the UN has kicked around—with zero progress—Security Council reform for decades, we suddenly have an extra-UN group of nations slightly larger than the Security Council that pretty fairly represents world economic and political power.

I wrote yesterday that the G-20 is over-weighted in favor of nations bordering the Atlantic, giving 5 seats to EU members, and three dominated by the European descendants still running the U.S., Canada, and Australia. It's a great improvement to add the BRIC nations of Brazil, Russia, India, and China to Japan, the only non-white G-7 member [click on chart to enlarge]. These nations represent 44% of the world’s people (against the Euro-based 8’s 13%), yet also have 28% of the world’s wealth.

In rounding out the G-20, organizers went down the list of largest economies, while wisely leaving out additional European members. As I noted earlier, the G-20 bosses, deliberately I presume, passed over Iran in favor of Saudi Arabia. Iran has twice as many people and a larger economy than Saudi Arabia, and I would switch the two. Still, it’s great to have countries such as Indonesia, South Korea, Mexico, and Turkey finally brought into the world’s continuing leadership group.

The more important the G-20 becomes, the more important it is to do membership correctly. We’ve taken a big step to get this far—a fairly representative group just small enough to get things done. Before membership is set in stone, the G-20 should end Europe’s continued over-representation, and place non-European nations with large populations and economies into three of the five seats currently filled by EU members.

The EU should sort out for itself how it fills its two seats. Currently, Thailand (with one of the 20 largest economies), Pakistan, and Nigeria seem the best candidates for the three extra seats the EU still holds. Finally, Australia is too small to be in the G-20 even with its nice-sized economy. Bangladesh, with over 7 times as many people, should take Australia’s place. Big countries, more than big economies, need to be at the table discussing economic problems on behalf of the world’s people.

One hopes G-20 membership stays flexible, free to change as countries gain in relative political and economic strength.