• Western leaders seek to help emerging economies
• Global crisis brings biggest meeting in decades
Ed Pilkington in New York
More than 20 of the world's leaders gathered at the White House last night at the start of a two-day emergency summit on the global financial crisis that will continue in five hours of policy discussions.
But even as participants began to assemble in what is the largest collection of presidents and prime ministers in almost a decade, doubts were raised that it would achieve anything beyond immediate moves to stimulate the world economy and an agreement to meet again.
Economists warned that hopes of a major push on creating new global regulatory systems would almost certainly be dashed. The meeting had been too hastily convened, was riven by too many internal contradictions and was too hampered by the power vacuum in Washington to achieve instant results. "I'm confident that not much concrete action will come out of it," said Brad Setser, a former US Treasury official and expert on geoeconomics at the Council on Foreign Relations.
The fact that the gathering brings together representatives of about 85% of the world's economy has prompted inevitable comparisons to the 1944 Bretton Woods meeting when 44 countries gathered in New Hampshire to devise the postwar international monetary system. But most analysts believe that "Bretton Woods II" will resemble its predecessor only in the scale of the crisis.
With US unemployment at its highest level in 25 years, the eurozone in recession and Chinese growth slowing, the challenges confronting the global economy are daunting. But the expectations are limited for what will emerge from those five hours of discussions. Two years of work went into the original Bretton Woods, compared with a month of scrambled preparations for this summit. "There hasn't been enough preparatory work for this summit to come up with any systemic recommendations," said Dani Rodrik, a professor of economics at Harvard University.
The summit was convened at the request of the French president, Nicolas Sarkozy, backed by Gordon Brown, and extended by George Bush beyond the usual parameters of the G8 to include a much wider spectrum in recognition of the global nature of the economic crisis. Its participants include the US, the EU and Japan as well as emerging economies - China, India, Russia and Brazil.
Expectations are low partly as a result of the vacuum at the summit's centre, a product of the lame duck nature of US government. Barack Obama, the president-elect, will be notable by his absence, though he sent two envoys. "That's a problem. The world needs strong and immediate leadership," Rodrik said.
The disparate nature of the group also brings potential problems. Bush has made it clear that while the US may favour greater regulation, it should be handled at the national rather than international level. China, too, has shown little desire to see new global systems reduce its control over its own exchange rate.
"The Chinese exchange rate is fundamentally undervalued, but the Chinese government sees that as a matter of its own sovereignty," said Setser.
With those caveats, most analysts believe that the best result that can be hoped for from the summit would be collective action to stimulate the global economy. In addition, there may be a common statement on the need to avoid any defensive moves towards protectionism in either trade or financial markets.
The UN secretary-general, Ban Ki-moon, will be present, along with the heads of the World Bank and International Monetary Fund (IMF). Their priority is likely to be to shield developing countries from the downturn, and they will be looking for commitments from leaders for help to prevent the crisis spilling over into emerging markets.
Ban has warned in an open letter to the summit that a human tragedy could unfold. "If hundreds of millions of people lose their livelihoods and their hopes for the future are dashed because of a crisis they have absolutely no responsibility for, the human crisis will not remain just economic," he wrote.
The prime minister of Japan, Taro Aso, has also spoken about the impact on poorer countries. He has offered to lend the IMF up to $100bn (£67.4bn), and has asked other leaders to follow his example.
The big question hanging over the gathering will be how it seeks to pursue the pressing demand for regulatory reform after the participants have returned home. A consensus is building that existing global systems, that allowed a massive boom in house prices and lending to take place in several key economies, are outdated.
Possible areas of reform include the need for more unified accounting rules, greater cooperation between national regulators, better early warning systems and a more centralised approach to new financial wizardry that has been poorly understood and largely unregulated. Further talks will almost certainly take place after January 20, by which time a new US administration will be in place.
The G20: Who is there and how desperate are they?
Ed Pilkington
Argentina - $150bn public debt
Attending: Cristina Fernandez de Kirchner, president
Argentina last month decided to nationalise its 10 largest private pension funds, taking $30bn of assets into public ownership. Shares then lost a fifth of their value in two days. Argentina defaulted on its debts in 2001 and investors fear it may do so again.
Desperation rating: Five stars
Australia - $141bn public debt
Kevin Rudd, prime minister
Australia has eliminated net public debt but runs a gross one of about 15% of GDP. Tough regulation meant its banks had little exposure to the US subprime mortgage market but the fall in commodity prices is hurting. Australia could face recession next year.
Desperation rating: Three stars
Brazil - $590bn public debt
Luiz Inacio Lula da Silva, president
Brazil's economy is growing at 5% this year but is expected to slow sharply next year. Central bank is making credit available to help firms boost sales and it has intervened in the market to meet demand for the US dollar.
Desperation rating: Three stars
Canada - $900bn public debt
Stephen Harper, prime minister
The Bank of Canada warned that growth would hit zero next year. Weaker oil prices and lower US demand are hurting Canada. Last month, it guaranteed bank lending in a move that could leave the taxpayer liable for up to US$175bn.
Desperation rating: Four stars
China - $580bn public debt
Hu Jintao, president
China is taking a big spending $586bn approach as industrial growth hits a seven-year low. As holder of the world's largest foreign exchange reserves ($1,900bn) China is under pressure to aid global finances but stands to be the biggest winner from the crisis.
Desperation rating: Three stars
France - $1.63tr public debt
Nicolas Sarkozy, president
The French economy grew by 0.1% between July and September but recession may only be temporarily avoided. Paris has made a €320bn guarantee for bank lending and a $40bn fund to recapitalise banks. Sarkozy has announced the creation of a fund to protect French companies from foreign "predators".
Desperation rating: Four stars
Germany - $2.07tr public debt
Angela Merkel, chancellor
Europe's largest economy officially entered recession this week after GDP shrank by 0.5%, the second quarter of decline. Germany has seen exports plunge. It is providing €400bn in guarantees for bank lending, plus a further €100bn to recapitalise its banks.
Desperation rating: Four stars
India - $637bn public debt
Manmohan Singh, prime minister
India is being tipped as a key player in helping bolster the global economy. Growth is expected to be 7.5% this year, down from 9% and disguising the slowdown in the industrial sector. Along with China, a big gainer.
Desperation rating: One star
Indonesia - $147bn public debt
Susilo Bambang Yudhoyono, president
Jakarta unveiled an emergency package last month in response to increasing pressure on its currency and stock market - including export tax cuts and ordering state-owned companies to repatriate foreign currency earnings.
Desperation rating: Two stars
Italy - $2.19tr public debt
Silvio Berlusconi, prime minister
The economy has contracted for a second quarter, by a worse than expected 0.5%. It is Italy's fourth recession in seven years. The government has set aside up to €40bn to recapitalise its banks and created a €650m fund to guarantee lending to companies.
Desperation rating: Five stars
Japan - $7.45tr public debt
Taro Aso, prime minister
The world's second biggest economy may be on the brink of recession. Despite this, Japan is prepared to take a leading role in helping get the global economy going, standing ready to offer $100bn in loans.
Desperation rating: Three stars
Mexico - $203bn public debt
Felipe de Jesus Calderon Hinojosa, president
The government is increasing spending by more than 13% to $231bn next year in a bid to boost the economy. The slump in the oil price hurt Mexico as oil revenues finance around 40% of its spending. The US slump has also cut the amount expatriate Mexicans send home.
Desperation rating: Four stars
Russia - $76bn public debt
Dmitry Medvedev, president
Russia has pledged a $200bn package for the economy and financial markets while the central bank has raised key interest rates to try to halt capital flight. Share prices have slumped while the rouble has been under heavy pressure. Russia has financial firepower but a fall in commodity prices hurts.
Desperation rating: Four stars
Saudi Arabia - $91bn public debt
King Abdullah
Its stock market is down 40% this year and the government has made $40bn available to its banks. However, the focus has been on Saudi pumping money into the IMF so that it can in turn bail out struggling countries.
Desperation rating: Three stars
South Africa - $88bn public debt
Petrus Kgalema Motlanthe, president
Its financial system is largely unscathed and could use its stronger bargaining position to press for more African voices in international forums such as the IMF. A potential gainer.
Desperation rating: Two stars
South Korea - $269bn public debt
Lee Myung-bak, president
No bank nationalisations but the government said yesterday it was ready to provide liquidity to the sector amid fears of mounting bad debts and slowing growth. Wobbling.
Desperation rating: Three stars
Turkey - $257bn public debt
Tayyip Recep Erdogan, prime minister
Turkey's debt was downgraded by credit rating agencies this week. It might need further IMF cash. Its currency lost a third of its value against the dollar last month alone.
Desperation rating: Four stars
UK - $1.2tr public debt
Gordon Brown, prime minister
Amid bank bail-outs and interest rate cuts the country sits on the brink of recession. The FTSE has lost around 40% since last summer. Desperation rating: Five stars
US - $8.4tr public debt
George Bush, president
The origin of the subprime crisis. Washington has drawn up a $700bn bail-out plan for the nation's banks, including a fund to buy toxic assets. Needs a solution fast.
Desperation rating: Five stars
EU
The eurozone is now officially in recession. The economy of the 15 countries using the euro shrank by 0.2% between July and September compared with the previous quarter.
Desperation rating: Four stars
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