The Group of 20 comprises finance ministers and central bank governors from 20 major economies: 19 countries plus the European Union, which is represented by the president of the European Council and by the European Central Bank.
G20 members must put self-interest aside
International politics have taken a leap forward with the Group of 20's decision to put itself in charge of steering the world's economy. China and other major developing nations are now on an equal footing with their industrialised counterparts in shaping policies and directions. The symbolism of the unrepresentative Group of 8 being replaced by a genuinely inclusive forum is immense. If the new grouping is to succeed, though, nations have to set aside differences and suspicions and work together for the global good.
Western nations drove the G8 agenda for more than three decades. They put themselves in charge of directing the global economy in the wake of the 1973 international oil crisis. Their priority was more often than not themselves - a move that divisively split the world between rich and poor, north and south, and haves and have-nots. Globalisation, the Asian economic crisis and the rise of China, India and Brazil meant that approach was no longer viable.
The G20 was established last year in response to the global financial crisis. Emerging markets account for more than half the world's economy; the G8 model of an annual summit in which Britain, Canada, France, Italy, Germany, Japan, Russia and the US determined the way forward would have been an unrealistic means of handling the problem. The summit in Pittsburgh that ended on Friday with the G20 deciding to supersede the G8 was the grouping's third meeting of leaders and in light of the decision, its most important. They have rightly shelved the past in favour of a 21st-century solution.
How effective the G20 will be depends on the determination of its members to follow agreements with action. The G8 and its predecessors had a patchy history of success. Even the most acclaimed pact - the 1985 Plaza Accord to reposition the US dollar against other major currencies - was violated. The effect of the intervention was immediate, dramatically cutting the value of the dollar. But the US failed to follow through with a promise to reduce its budget deficit, causing a rise in the value of the yen, and making Japanese exports uncompetitive.
Agreements are forged by compromise. The G8, the UN Security Council and other multinational groups are often criticised for making decisions that lack teeth. There is a fear that the G20, because of the diversity of its membership, will be even less effective. An inkling of this sense was on show in the final statement of the latest summit: pledges for strong action were made, but there was a lack of detail and specific targets. Protectionism is slowly rearing its head, eroding the effectiveness of pacts.
But there is an even bigger concern - that the G20's work will be derailed by G8 members refusing to close their cosy club. At the summit level, the group has obviously been replaced. An agreement to increase the voting rights of China and other developing countries at the World Bank and International Monetary Fund boosts their standing. G8 nations remain historically interconnected, though; it will be some time yet before they embrace their poorer partners as true equals.
A momentous decision has been made. The G8 has not been enlarged but replaced. A handful of wealthy countries no longer have the right to dictate the direction of the global economy. China, India and their ilk have been given the standing they deserve. But if the move is to be more than symbolic, all G20 members have to put aside self-interest and strive to do their best for global development.