ROME (Bloomberg) - The world's most affluent nations will take decades to work off the biggest build-up in debt since World War II.

The political costs may be permanent, laid bare at this week's Group of Eight summit of leading industrial powers.

Bank bailouts and recession-fighting measures will explode the debt of the advanced economies to at least 114 percent of gross domestic product in 2014, more than triple the 35 percent of the main emerging economies including China, the International Monetary Fund forecasts.

The run-up in debt has hastened a power shift that is sapping the industrial world's authority to impose its economic doctrine, currency arrangements or greenhouse-gas reduction strategies. Even some G-8 officials acknowledge that the group has lost its grip amid the global recession they spawned.

The eight-nation forum that starts tomorrow in L'Aquila, Italy is "a lot less relevant given its make-up and given developments in the world", French Finance Minister Christine Lagarde said July 5.

"Big players, like emerging economies, India, China or Mexico, are invited, but they're given only a jump seat outside of the main summit."

The industrial world is beset by the harshest economic conditions in a lifetime: a projected US budget deficit of 13.6 percent of GDP in 2009, unmatched since World War II; an annualised 14.2 percent contraction in Japanese GDP in the first quarter, also the worst since the war; in the first three months of 2009, German exports had their steepest quarterly decline since 1970 when the data were first compiled.

Reflecting the relative fortunes of the G-8 and emerging markets, developing nations' share of worldwide stock-market capitalisation has climbed to a record 24 percent from 15 percent at the start of 2007 as investors piled into the fastest-growing economies.

"Despite a global economic contraction and some uncertainties over growth in domestic demand, China's economic recovery will continue," Zhang Jianhua, head of the central bank's research bureau, said in this month's China Finance magazine.

While the surge in borrowing has prompted calls for alternatives to the dollar as a reserve currency, emerging- markets policy makers aren't near consensus on a plausible option. Chinese Deputy Foreign Minister He Yafei said July 2 the dollar will reign supreme for "many years to come".

Staunching the recession, combating climate change, promoting trade and dealing with Iran top the agenda of the G-8, a grouping of 880 million people with combined GDP of $32 trillion that includes the US, Japan, Germany, Britain, France, Italy, Canada and Russia.

Divisions persist over dialing back stimulus measures - Germany says now is the time to begin curbing deficits - and the scope of financial oversight. Britain opposes more intrusive market oversight proposed by the European Union.

"Different countries are pulling in different directions and that is, I think, quite troubling," said Niall Ferguson, a history professor at Harvard University in Cambridge, Massachusetts. The uncoordinated response is "one of the classic symptoms of a global crisis".

While the eight deliberate, leaders of five developing economies - China, India, Brazil, Mexico and South Africa — hold a parallel summit nearby before the G-8 meeting.

Led by China, the emerging economies don't share the "sombre fiscal outlook" of the affluent world, the IMF says. The IMF says the debt won't be repaid as quickly as after World War II, which ended with debt topping 250 percent of GDP in the UK, 200 percent in Japan and 100 percent in the US.

In wartime, governments exercised "comprehensive control" over the economy and citizens felt a "moral duty" to buy war bonds, the IMF said in a June 9 report.

Rich nations' debt constituted 78 percent of GDP in 2006, the year before the financial crisis took hold, while emerging-markets debt has dipped from 38 percent, the IMF says.