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WASHINGTON: The leaders of nations representing 85 per cent of the global economy are gathering in Washington to discuss ways to tackle the financial crisis.
G20 countries will examine the causes of the downturn, assess the global response so far and discuss ways to reform the system.
The G20 comprises major industrial powers like the United States and Japan, as well as rising economies, such as China and India.
In light of the current turmoil, some are calling for a shake-up of the world's economic order, to reflect the growing importance of those emerging powers.
Speaking ahead of the G20 meeting of world leaders, US President Bush acknowledged the need for reform of the current economic system. But he also suggested free market capitalism still offers the best system to promote economic growth.
He said: "It's true this crisis includes failures by lenders, and borrowers, and by financial firms, and by governments and independent regulators. The crisis was not a failure of the free market system."
The G20 summit will examine what went wrong with the response and what should be done next.
"This crisis did not develop overnight, and it is not going to be solved overnight, but our actions are having an impact. Credit markets are beginning to thaw," Mr Bush added.
G20 leaders will be discussing ways to reform global financial institutions, like the World Bank and IMF, to better reflect the growing influence of countries like Brazil, India and China.
Some analysts said China will initially be reluctant to take on too large a role.
Charles Freeman from the Center for Strategic and International Studies, said: "They are talking about just wanting to be at the table and how it's very important that they're at the table.
"I would anticipate that they are going to be much more than at the table long term, that the process of restructuring whatever global architectures will exist a year from now, two years from now, however long the process takes, China will have a significant say in what that looks like at the end of the day."
Expectations for any major breakthrough have been dampened by the fact that President Bush is entering the "lame duck" period of his presidency.
President-elect Obama will not be attending the summit, choosing instead to send a representative, former US Secretary of State Madeleine Albright.
She said: "It's time to get off the roller-coaster and back to the fundamental principles. A healthy global economy should reward inspiration and perspiration, not speculation and manipulation."
The Bush administration will defend capitalism during this summit, while also seeking a path of financial reform for the Obama era.
That path will include an expanded role for India, China and other emerging nations whose continued growth is seen as vital to the success of a future global economic recovery. - CNA/vm
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