Group of 24 (G-24)

What Is the Group of 24 (G-24)?

The G-24 is a group of developing countries that was established in 1971. Its goal is to work together to coordinate the positions of developing countries on international monetary and development finance issues.

The G-24 countries also work together to ensure that their interests are adequately represented in negotiations on international monetary matters. The full formal title of the G-24 is the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development. More importantly, the G-24 is a chapter of the Group of 77 (G-77). The G-77 is the largest intergovernmental group of developing states in the United Nations (UN).

Understanding the Group of 24 (G-24)

G-24 membership is not strictly limited to 24 countries, and any member of the G-77 can join discussions. The group actually had 28 full members as of December 2020. Furthermore, China has been a "special invitee" since 1981. The G-24's website listed its full members like Algeria, Argentina, Brazil, Colombia, Congo, Cote d'Ivoire, Ecuador, Egypt, Ethiopia, Gabon, Ghana, Guatemala, Haiti, India, Iran, Kenya, Lebanon, Mexico, Morocco, Nigeria, Pakistan, Peru, the Philippines, South Africa, Sri Lanka, Syria, Trinidad and Tobago, and Venezuela.

The G-24's initial objective was to evaluate the direction of international monetary policy from the point of view of developing countries. Furthermore, the group aimed to build coordinated positions for the G-77 at the United Nations Conference on Trade and Development and other conferences. Its mission later grew to include general development economics issues in 1976.

While the G-24 is not an organ of the International Monetary Fund (IMF), the IMF provides services for the G-24. Meetings of the G-24 are attended by heads of the World Bank Group, the IMF, and senior UN officials. The group meets two times per year.

Benefits of the Group of 24 (G-24)

The G-24 clearly had some success, as the overall economic development of its members increased considerably since it began in the 1970s. Although the G-24 is much less famous than the Group of Seven (G-7) developed countries, it acts as a sort of counterweight by coordinating and advocating developing countries' positions.

Although there are some exceptions, the G-24 as a whole contains many nations with excellent growth potential for investors. Furthermore, World Bank data shows that the stock market capitalization-to-GDP ratio in G-24 countries is generally lower than in the past and lower than developed countries. That suggests these stock markets are likely to outperform after 2020, despite their volatility.

Emerging market ETFs and frontier market ETFs are the easiest ways to invest in G-24 countries.

Criticism of the Group of 24 (G-24)

Despite the G-24's success during the first several decades of its existence, its members' fortunes diverged sharply to the point that the group made less sense in 2020. In particular, the two large economies of China and India advanced strongly, while several other developing countries lagged behind.

On the whole, the Group of 24 may have grown apart too much to continue sharing objectives. Many of the members in Africa, such as Kenya, made significant gains during the first two decades of the 21st century. On the other hand, Syria plunged into a civil war, and the value of Venezuela's currency dropped dramatically amid hyperinflation.

There are also vast differences between the members of the G-24 from the viewpoint of investors. China and India are both generally seen as hi-tech success stories that are likely to attract growth investors. Brazil, Mexico, and South Africa have economies that depend heavily on natural resources, which were out of favor in 2020, making them more appealing to value investors. Finally, there were a few members of the G-24, such as Iran, that most investors would want to avoid entirely even if there were no laws against investing in them.