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G-20 Summit begins today; to focus on growth, tax evasion

Last Updated: Thursday, September 5, 2013 - 10:34

Zee Media Bureau

St.Petersburg: The eighth G-20 Summit will begin in during which splits between emerging markets and the US over Federal Reserve's winding down of stimulus and the slowing growth of India and other four BRICS countries are expected to remain in focus.

The dispute between Russia and the US over the conflict in Syria, however is likely to overshadow the two-day summit starting today in the Russian city.

At a summit which Putin is hosting in a tsarist palace outside St. Petersburg, the Group of 20 developed and developing economies will try to forge a united front on growth, trade, banking transparency and fighting tax evasion.

The club that accounts for two-thirds of the world's population and 90 percent of its output is divided over issues such as emerging market turmoil and the Federal Reserve's decision to end its program of stimulus for the US economy.

Foreign ministers from key states in the G20 - which includes all five permanent Security Council members - will discuss Syria on the sidelines of the meeting although it is not formally on the summit agenda.

The G20 lacks the powers of the Security Council, but Putin would like to see a consensus to avert military action in what would be a significant - but unlikely - diplomatic triumph for Russia, Syria's key arms supplier and international ally.

The G20 achieved unprecedented cooperation between developed and emerging nations to stave off economic collapse during the 2009 financial crisis, but the harmony has now gone.

There are likely to be some agreements - including on measures to fight tax evasion by multinational companies - at the summit in the spectacular seafront Peterhof palace complex built on the orders of Tsar Peter the Great.

An initiative will be presented to leaders on refining regulation of the $630 trillion global market for financial derivatives - such as futures, options and swaps - to prevent a possible markets blow-up.

Steps to give the so-called 'shadow banking' sector until 2015 to comply with new global rules will also be discussed.

But consensus is proving hard to achieve among developed economies as the United States takes aggressive action to spur demand and Europe moves more slowly to let go of austerity.

Meanwhile, emerging economies in the Brics - Brazil, Russia, China and South Africa - are divided over the role of the U.S. dollar in the world economy.

And there has been no sign of them rallying behind the fifth Brics member, India, after it called last Friday for joint currency intervention.

With Agency Inputs

First Published: Thursday, September 5, 2013 - 09:58
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