PITTSBURGH, (Reuters) – The Group of 20 nations, comprising developed and emerging economies, is set to take a leading role in coordinating the world economy, a senior U.S. official said on Thursday.
The move suggests a shift from the major industrialized powers that comprise the Group of Eight to a broader forum that includes rising economic powers like China and Brazil.
“The G20 is going to be the new body council that will be the coordinating body for international economic cooperation,” the official said, as leaders of the group began a two-day summit in Pittsburgh focusing on ways to prevent a repeat of the global financial crisis.
The move reflects a long-running push by countries such as China to have more of a say in world economic affairs.
The financial crisis that ripped into the U.S. economy last year and quickly spread worldwide has elevated the status of the G20 as emerging economies proved more resilient in the downturn.
The G20 summit this week is the third such gathering since the collapse of investment bank Lehman Brothers sent shock waves through the world financial system one year ago.
The G20 was formed in 1999 for finance ministers and central bank chiefs following the Asian financial crisis. The idea was to help the G7 — the United States, Japan, Germany, Britain, France, Italy and Canada — talk with the wider world.
The G8 is the G7 plus Russia. It meets at the level of leaders but has been forced since the latest crisis to share the world stage with the G20.
Britain had earlier pushed for the promotion of the G20 as the steering committee for the global economy, but faced concern from some European countries that this would be at their expense.
Italian Prime Minister Silvio Berlusconi, currently chairman of the G8, urged the two forums be kept separate and made a coded call to maintain the dominance of the smaller group.
“We stress that it is essential that there should be the closest coordination between the G8 and G20 presidencies, and that the differences between the two are clear,” Berlusconi wrote in a letter to the G20 summit host, U.S. President Barack Obama.
Berlusconi’s letter was made public soon after British Prime Minister Gordon Brown said in New York that leaders would institutionalize the G20 as the key economic steering committee.