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Changing the global economic leadership

Business Times - 29 Sep 2009


Changing the global economic leadership

G-20 will provide an important arena for US, China and others to coordinate their policies

By LEON HADAR
WASHINGTON CORRESPONDENT

FOR close to 25 years, the United States and the other six largest economies, aka the G-7, were considered to be the board of directors of the global economy. In many instances, the governments of these seven industrialised powers were not able to agree on joint action; but when they could find a way to cooperate, their collective decision-making would send shock waves through stock markets worldwide and pull up or push down global exchange and interest rates.

This exclusive club of rich economies was formed in France in 1975 (with six members). Canada joined a year later. The group expanded to eight members when Russia was invited to join in 1997.

The decision to add the emerging economy of Russia to the grouping was driven mostly by geopolitical and not economic considerations, at a time …