A formal farewell to the American-led postwar financial system and a coming-out party for an expanded club of economic powers that will design new rules to meet the global financial crisis.
That is how this weekend's Group of 20 summit, called by President Bush, is likely to be remembered: not so much for the action taken, as for the milestone it marked and the emerging global economic order it heralded.
"The summit marks a more inclusive form of international cooperation" in dealing with the global economy, says Sebastian Mallaby, director of geoeconomic studies at the Council on Foreign Relations in Washington. After decades of a handful of leaders from the richest economies meeting to address the world economy, "just the creation of the G-20 at head-of-state level will be the first accomplishment."
One reason that the Washington summit, which begins Friday with a White House dinner, is not expected to reach any significant accords for addressing a deepening economic meltdown is that American leadership is in limbo. Mr. Bush invited President-elect Barack Obama to attend, but Mr. Obama declined, sticking to the long-held tradition of "one president at a time."
While a call to broad international participation in efforts to stimulate the global economy may figure in the summit's final communiqué Saturday, representatives of participating countries and international economic experts say they expect a bigger emphasis on future steps.
Working groups are likely to be set up to suggest solutions to the specific problems deemed to have led to the financial crisis. Expected areas of focus include transparency in international financial transactions and regulation of a globalized financial system.
France is expected to offer to host a follow-up summit as early as February, with some officials suggesting the first decisionmaking on new rules – and the institutions to enforce them – could come by the end of March.
What is clear is that the new international economic order, what Europeans especially refer to as "Bretton Woods II" (after the international meeting that established financial institutions for the post-World-War-II world), will reflect a diffusion of economic power and responsibility to countries like China, Brazil, and South Korea.
"This summit recognizes where the world is going," says John Williamson, a development economist at the Peterson Institute for International Economics in Washington. Although a slightly smaller grouping than the G-20 countries might have been more efficient, he says, "the fact is that decisions without China and India and Brazil at the table aren't worth very much."
Indeed, with the world's major developed economies expected to shrink next year, the emerging economic powers are suddenly cast in the unfamiliar role of posse riding to the rescue. China, for example, is still expected to grow about 8 percent.
"The times are over when things could be decided just by the G-7," says a high-ranking European official in Washington who spoke on condition of anonymity. "It can't be just the G-7 countries [because] we have to bring in the countries with huge reserves and growing markets."
Developing countries are welcoming the expansion of the world economic club to include them. But they are also demanding a bigger role in international economic decisionmaking.
Worried that a financial crisis spawned in the US and abetted by a weak regulatory system will bring them down as well, developing countries are expecting reforms that recognize the advent of a globalized economy. But they also will demand recognition of their particular needs.
For instance, developing countries are likely to push for maintaining and expanding mechanisms promoting access to investment funds. "I'd expect that to be quite a fixture in future negotiations, but it's not something the G-7 would have been likely to push," Mr. Williamson says.
Another area of interest is trade, especially since the economies of so many developing countries are dependent on export markets. Brazilian President Luiz Inácio Lula da Silva told a finance ministers' meeting in Brazil last Saturday that the world must "avoid the temptation of resorting to financial and trade protectionism as a mechanism to overcome the crisis."
Simply by calling an emergency summit of more than 20 countries, Bush is recognizing the growing role of developing economies. But he is also calling for the summit to take up specific reforms that acknowledge a changed world.
For example, he wants a "modernization" of the World Bank and International Monetary Fund that would include extension of voting rights and expansion of their executive boards to developing countries.
What the US under the Bush administration does not want to see is the summit and follow-on meetings turn into an assault on the postwar, free-market system. In prepared remarks he was to deliver Thursday afternoon in New York, Bush advocated "specific actions" to improve the system. But he also warned against overzealous attempts to "reinvent" it, saying "government intervention is not a cure-all."
That shot over the bow appeared aimed at some leaders like French President Nicolas Sarkozy, whose vision of a crisis fix includes a more robust governmental role and more intrusive intervention.