Yet, twenty years after its initial founding, it became apparent that these countries represented a shrinking share of the world's product, and, with the "Asian crisis" of 1997-1998, an expanded version of the G7 Finance Committee was launched, a -20, which added many key nations from the developing world, whose Finance Ministers thus joined these deliberations.

In the end, though, certain decisions can only be made at the highest levels. The notion that it was the G8 itself that needed to expand spread.

Emerging powers like China and India, but also countries like Brazil, Mexico and South Africa, richly endowed in population, territory and natural resources, became candidates to join. Inviting their leaders for only part of the G8 sessions was the initial response, but eventually became untenable.

In the 2007 G8 Summit in Heiligendamm, Germany, the communiqu was issued before the Outreach Five (Brazil, China, India, Mexico and South Africa) met with the G8, adding a measure of farce to what was seen by many as mere window-dressing.

It is time to get serious. For several years two Canadian think tanks, CIGI and the Center for Global Studies, have pushed for a Leaders' G20 meeting as a way of breaking global deadlocks and making progress not just on international financial regulation, but also on issues as varied as climate change, international migration and agricultural subsidies.

Many simulations and "shadow meetings" around the world of this "Breaking Global Deadlocks" project have shown the fruitfulness of it. Extant tools to cope with such issues are either obsolete or not working.

As US Treasury Secretary Henry Paulson has said himself, "If you look at the global financial architecture, I don't think it reflects the global economy."

Current arrangements are unfair and unrepresentative. Unfair because they are based on a set of rules based on Northern preferences and convenience - not just on the composition of the G8.

The cozy arrangement whereby the two leading international financial institutions (IFIs), that is, the IMF and the World Bank are always led by a Western European and an American, respectively, although they deal largely with the developing world, has become unacceptable.

Moreover, the unwillingness of the IFIs to actually hold Northern countries accountable for the same financial mismanagement they relish in accusing developing countries of has deprived them of much credibility. What has the IMF to say about the ballooning, $500 billion fiscal deficit, $10 trillion dollar public debt and current account imbalances of the United States?

One can always argue about who else should be on groups such as these. But the G20 is an informal body that already exists, making it easy to build on it.

Capitalism may not be in its last throes, but the Northern hubris according to which the answers were to be found in Washington, London or Paris and all the rest of the world needed to do was to follow instructions emanating from these capitals certainly is.

The rich countries' club has opened its doors, realizing that we are all in this together. President Bush's calling of the G20 Leaders' meeting may be the single most forward-looking initiative of his eight-years in office.

The author holds the Chair in Global Governance at the Balsillie School of International Affairs and is a distinguished fellow at the Center for International Governance Innovation in Waterloo, Ontario

(China Daily November 14, 2008)