The G-8 refers to the group of eight industrialized nations of the West and Japan whose leaders meet each year to discuss the state of the world and to try to cooperate and coordinate the pressing problems of the times. The Group was formed in 1975 when the French President, Giscard D’Estaing invited the leaders of six nations to meet in Rambouillet, France. The need to coordinate the policies and actions of the six most developed countries had arisen following the first Oil Crisis in 1973. The six nations whose leaders were invited to this meeting were the USA, France, the UK, Germany, Italy and Japan. These leaders decided to meet every year in the member countries by rotation under the leadership of a rotating presidency. The United States persuaded the other five countries to include Canada in this group in order to counterbalance the weight of the European countries in the Group, making it a Group of Seven, or G-7, and so it remained until the dissolution of the Soviet Union and the acceptance of Russia as a partner by the western countries. From 1994 on, the Russians started participating in the G7 summit in an official capacity. The arrangement was formalized in 1997 when Bill Clinton invited Boris Yeltsin to officially join the group, making it officially G-8.

The G-8 is meant to be an informal leaders’ forum, therefore it lacks a regular administrative set-up or headquarters, unlike other world organizations, such as World Bank or ILO. The host country holds a series of ministerial meetings to prepare the agendas and discussion papers, etc. before the meeting of the leaders is held, usually in the month of July. Although the primary focus of the forum is economics, the summits have started to address other critical issues facing the world, such as African Poverty, Aids, health, law enforcement, economic and social development, energy, terrorism, trade and climate change.

In recent years, leaders of the G8 have begun to realize the increasing clout of the emerging economic and political powers. Four countries, in particular – China, India, Russia and Brazil – have been mentioned as the rising economic powers who would account not only for an increasing proportion of the world economic output but also as the major consumers of world resources, such as oil and gas, as well as major contributors to green house gases and other polluters of environment; indeed China is already reported to have exceeded the United States as the biggest contributor to global producer of pollutants. In 2001, the investment banking firm of Goldman Sachs coined the term BRIC as an acronym for the four emerging powers mentioned earlier. The leaders of G8 recognized the importance of the emerging powers and, beginning in 2005, started to invite the leaders of five emerging powers – China, Brazil, India, Mexico and South Africa – to their summits to take part in “G8+5� meetings held on the sidelines of the G8 summit meetings.

The current global financial and economic crisis has underlined the complex and less than transparent linkages that connect the world economies, so that an unwise decision by someone to buy a home in San Diego that he could not afford can create the loss of job for a factory worker making Christmas toys in China. The crisis has set in motion a series of events and meetings which showed that the old order in which the G8 leaders sat at the top may be coming to an end.

The United States, at first, tried to stem the rot through a unilateral action by its Treasury Secretary Paulson who announced a bailout plan of $700 Billion to purchase the “toxic� assets of the US financial institutions but soon found out that this was not enough to calm the markets and restore their confidence; this was followed by the French President Nicola Sarkozi calling for an emergency meeting of the world leaders. Following Sarkozi’s call, a meeting of the G7 Finance Ministers was held on October 11 in Washington where the finance ministers decided to follow a coordinated approach to avoiding the prospect of a global meltdown. These too failed to stem the rot facing the financial markets and, increasingly, the real economies of both the developed and the developing countries. Anticipating a global recession, commodity prices declined precipitously, with oil coming down from $147 in August to its current price of $55 per barrel.

The leaders of the developed world, especially the United States, have finally come to the conclusion that they cannot by themselves tackle the serious economic problems facing the world. The Organization for Economic Cooperation and Development of the twenty developed countries, OECD, has recently announced that it expects the gross output of its member countries to shrink in the coming year. The burden of restarting the economic engine is now expected to fall initially on the emerging economies of the BRIC countries which are still expected to grow, albeit at a slower rate than their torrid growth rate of recent years.

Recognizing this reality, George W. Bush, the lame-duck President of the United States, called the leaders of the world’s twenty nations, known as the Group of Twenty or G-20. This group was initially formed at the initiative of the former Canadian Prime Minister, Paul Martin, as a group of the Finance Ministers and governors of the central banks of 20 countries. In addition to the G8+5 listed earlier, this group also includes Australia, Argentina, Saudi Arabia, South Korea, Turkey and the European Union. Together, these countries account for two-thirds of the world population and 90 percent of its gross output.

The meeting took place in Washington during the last weekend. It was hailed as a great success by all participants, despite the fact that it lasted only a couple of hours and produced very little. There were some feel good statements about the member countries cooperating and coordinating their programs and policies to pursue expansionary domestic policies to lift the world out of its current recession and prevent it from turning into a depression.

The chief legacy of the meeting, however, is that it took place at all and the fact that the leaders agreed to meet again in April next year when Barack Obama will be the President of the USA. The G-8 meeting will take place in Italy next year as scheduled but all eyes will be on the April meeting of G-20. What is certain is that the world order as we have known since the Second World War is coming to an end.