Manmohan Singh heads for St. Petersburg G20 Summit Wednesday
New Delhi: With policy actions in the US shaking currency markets globally and the world economy still in the risk zone, Prime Minister Manmohan Singh leaves on a three-day visit to St. Petersburg Wednesday to join other leaders at the G20 Summit and find ways to tackle the challenges.
The visit is also expected to provide an opportunity for the Indian prime minister to meet with leaders from Brazil, Russia, China and South Africa, which collectively form the BRICS nations, to take forward what is called the Durban Process, officials said.
These five emerging economies had agreed in Durban in March this year to create a $100-billion currency reserve fund to help similar countries and poor states in easing their short-term liquidity pressures and keeping their financial stability.
All these countries, save China, have seen their currencies take a hit in recent months, with the Indian rupee losing 20 percent against the US dollar this fiscal due to a pull-out by foreign funds after the US central bank hinted it may ease fiscal stimulus soon.
The leaders may also take up the issue of quantitative easing (gradual withdrawal of fiscal stimulus instituted in 2008) with US President Barack Obama. This is an issue which has been raised by both the India and China in the past few days.
Speaking to reporters here ahead of the G20 Summit, Planning Commission Deputy Chairman Montek Singh Ahluwalia, who is the sherpa or key interlocutor for the prime minister, said the turmoil in currency markets will be an important part of the deliberations.
"The summit is not expected to put its seal of approval on the specifics (of how to ease the pressures on currency markets), but we expected some broad discussions," Ahluwalia said, adding trade and energy security will also be among the topics of focus.
Other issues on the table include path to global recovery, inclusive growth, employment generation, quotas at multilateral financial institutions for emerging economies, trade and protectionism.
Besides India and the US, the G20 comprises Argentina, Australia, Brazil, Canada, China, France, Germany, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, Britain and the EU.
Originally formed at the level of finance ministers and central bank governors in 1999 after the East Asian economic crisis, the G20 assumed significance after its elevation to a summit-level forum in 2008, following the global financial crisis.
The summits also have the presence of the top representatives from leading multilateral institutions such as the World Bank, the International Monetary Fund, the World Trade Organisation and the Organisation for Economic Cooperation and Development.