Delegates to the G8 summit in St Petersburg next week will, for the first time, be able to convert their spending money into roubles and back, as they would with any other serious currency. If they (or their stockbrokers) are alert and fond of risk, they may also be able to snap up shares in the state-backed Rosneft oil group, which hopes to start raising $10 billion on the London Stock Exchange on the first day of the summit. Such are the public faces of the “state capitalism” that forms one of the two big planks of what history may well call Putinism. The other plank is “managed democracy”, which was less conspicuously on show in the recent arrest, well to the north of the Arctic Circle, of Russia’s last elected regional governor.

President Putin’s overarching goal in St Petersburg is for Russia to be taken seriously by the industrialised West. To this end, with the help of a newly hired US public relations firm, he is promoting the notion of Russia as a benevolent “energy superpower”. Yet his democratic credentials are less impressive than ever, and his recent characterisation of President Bush as “Comrade Wolf” raises serious questions about both his world view and his diplomatic judgment.

Russia can certainly claim to be an energy superpower. It also has the potential to become a paranoid autocracy. As a result, questions about whether it should be a member of the G8 at all have so far eclipsed those about whether this year’s meeting might achieve anything useful in terms of energy security or the containment of Iran’s nuclear ambitions. In fact, there is only one safe bet as to the outcome of this summit: there will be no concerted effort to suspend Russia’ s membership. Nor should there be.

The G8 trumpets its meetings and agendas as those of the world’s leading industrialised democracies. It was therefore appropriate, when Russia was invited to join as a permanent member in 1998, that it pledged explicitly to move towards a pluralist political system, strengthen the rule of law, build a truly independent judiciary and strive to integrate with the global economy. Mr Putin has delivered only on the last of these, but to uninvite him because of a lack of progress on the first three would still be pointless.

The G8 has evolved from an informal forum for the leaders of France, Germany, Britain and the US to co-ordinate their management of global economic challenges. It was also, initially, a quintessentially Cold War device to include, in top-level international discussion, the two leading capitalist economies excluded from the UN Security Council — Germany and, later, Japan. It was never conceived, despite appearances and abundant good intentions at Gleneagles last year, as a vehicle for the harnessing of diffuse idealism to save the world.

If the G8 is to be both relevant and effective, aligning the macroeconomic interests of the world’s great industrial powers must remain its chief raison d’etre, however stunted or suppressed the democratic yearnings of those powers. And to perform this task, China and India must join the group.

Angela Merkel, the German Chancellor, has a chance to put good governance on the agenda when she chairs the 2007 summit, and she should take advantage of Mr Putin’s fluent German to talk frankly to him about the democratic imperative. And they should discuss how the G8 would be a lot more effective as the G10.