It is increasingly the fate of the G8 to be overestimated. Both governments and campaigners have an unreasonably elevated view of its capacity to do good. The summit that begins today should see a return to basics.

The leaders of the main industrial powers (first the G5, which then expanded to become the G7 and G8) have met annually since the French President, Valéry Giscard d'Estaing, instituted a “fireside gathering” at Rambouillet in 1975. Until recently these summits were commonly caricatured as a forum for gaseous and inconsequential declarations by a club of rich nations. Things have changed, and not entirely for the better.

First, each meeting is now preceded by intense lobbying by pressure groups demanding that the advanced industrial powers recast their policies on climate change, development and numerous other concerns. Secondly, the political leaders respond to these concerns in their declaratory policy. Bono and Bob Geldof urged the Gleneagles summit in 2005 to “make poverty history”; the British facilitated meetings between the campaigners and heads of governments.

The G8 has thus become a stage, as much as a forum for diplomacy. There are dangers in this. The capacity of world governments to remove impediments to welfare is significant. But their ability to resolve intractable problems is strictly limited. Poverty has not been made history in the past three years, nor will it ever become so by a mere assertion of will. Improving the plight of the global poor will require a change in Western policies on trade and aid, for sure - but also the establishment of sound institutions, property rights and the rule of law in states that have been badly misgoverned.

The G8 summit being held this week at Hokkaido (see page 6) bears the hallmarks of a meeting that will be longer on intentions than tangible gains. Protesters are demanding action against climate change and world poverty. World leaders indicate that Zimbabwe, the risk of global recession, oil prices and greenhouse gas emissions will be among their topics for discussion. There is a risk of overstretch.

There is, however, an important task that the summit might achieve in both policy and international governance. Policymakers in the advanced industrial democracies face the unenviable prospect of faltering growth and surging inflation. America's central bank, the Federal Reserve, has sharply eased monetary policy in order to counter the credit crunch. This inevitably intensifies inflation in countries such as China, whose currency is pegged to the dollar and which is a massive consumer of energy.

Under the UK's presidency of the G8, Tony Blair pressed the notion that the locus of decision-making was becoming the “G8 + 5” - the five comprising China, India, Brazil, Mexico and South Africa. A coordinated international response to the credit crisis might involve an understanding whereby rapidly growing emerging economies allow their currencies to appreciate, thereby dampening inflationary pressures and creating the conditions for renewed global economic stability.

There is a place for grand visions in statecraft, but the G8 summit might usefully direct its collective attention to more immediate and resolvable concerns of economic management.