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THE WEAKNESS of the dollar and the strength of the euro are two causes of concern – and not just for the European Central Bank (ECB) and its US counterpart, the Federal Reserve. The dollar’s steady decline in value reflects a gradual shift in the balance of global economic power and marks a loss of American political influence. There is a change in the old pattern of economic development where the rich Group of 8 (G8) countries including the US, Japan and major European states got richer while the developing world marked time or became poorer.

The emerging economies of China, India and Brazil are the new centres of growth in a world economy where governments are still struggling to fix the global financial system. The Group of 20 (G20) reflected the new order when it met in Pittsburgh last week. It includes both the world’s major developed economies and many of the developing and resource-rich nations. This ensures a more balanced representation in this global forum and should result in more effective economic co-operation by member countries. Political power is slowly shifting away from the US, Europe and Japan.