The Group of Seven industrial countries brings together the world's largest economies plus the European Commission. As such, its members are inclined to see themselves as the world's leading nations. In one sense, it would be mistaken to suggest that they are deluding themselves. The United States, alone, accounts for slightly more than 20 per cent of the world economy at purchasing power parity, and the seven between them account for 49 per cent. The economies of Germany and Japan are certainly large enough to put them in a position to dominate their own regions - often causing considerable resentment among neighbours and further afield. Politically, France and Britain still punch above their weight in the UN Security Council and elsewhere. But as it ends its latest summit, one has to ask if the G7 really matters to the rest of the world as much as it would like to imagine. Does it even have the relevance to the political and economic fortunes of its own members that the pomp and circumstance of the summit in France were intended to suggest? The answer to both questions is almost certainly a negative one. The group's very clubbiness sets it apart from the events it wants to influence, alienates it from allies it needs to make its international policies work - and could indeed provoke other, specifically regional groupings to rebuff its initiatives. The G7 is, itself, sharply divided on a number of issues which not only render it ineffectual but risk diminishing its credibility on those matters where it can agree. The United States led calls for unity in the fight against terrorism. Almost as if to prove the need for a united front, Britain suffered yet another terrorist attack on its troops in Germany on the eve of the summit. Yet when it comes to the crunch, US attempts unilaterally to ban trade with countries it feels are either sponsoring terrorism or are politically beyond the pale have forced the rest of the group into coalition against it. Similarly, when the G7 wanted to present a united plan for debt relief for the world's poorest countries, a move widely believed to be vital to get those economies and their potential trading partners in the developed world on the road to recovery, Germany blocked agreement on releasing International Monetary Fund gold reserves to pay for it. At the same time, the group has had nothing much to offer its own peoples on the economic front, other than platitudinous words of praise for the globalisation of the economy and a wish for more stability in world currency markets. No doubt the less powerful nations which find their economies at risk from the predatory instincts of rich-nation currency traders would like to hear more about this. To some extent, the G7 countries are aware of the club's failings. The decision to include Russia in more and more of their activities is a recognition that times have changed. Yet that is still very much a Cold War reflex. The only real change the West has understood is that it must now keep closer tabs on Russia, and the best way to do that is to give it limited access to its councils. Despite the undoubted importance of Japan in the world economy and the G7's thinking, the group is still focused largely on the North Atlantic. To remain relevant, the G7 must avert its eyes from its own navel. Increasingly, its trade - and its hopes for economic growth and recovery - are focused on the emerging markets of Asia, and to some extent Eastern Europe and Latin America. Yet at a time when even the traditionally Western-orientated Organisation of Economic Co-operation and Development is admitting Poland and South Korea as members and has accepted Hong Kong as an observer, there is no similar recognition within the G7. It is this kind of blindness which so infuriates those like the Malaysian Prime Minister, Mahathir Mohamad, and has goaded him into promoting an East Asian economic forum alongside the Asia Pacific Economic Forum (APEC) to exclude the United States. He is not the only one to react in this way. The G7 should look east and south. Regional political and economic powerhouses such as Brazil, India and, above all, China - no matter how far removed they may still be from the globalisation so popular with the G7's leaders - will, within a very short time, be as important to the stability and health of the world economy as some of the leading industrialised countries. Economically, they are already more important than Russia. It is time the new realities impinged a little more clearly on the sometimes muddled thinking of the leaders of the old economic and political order.