India may ask Euro to come up with quick solutions
As G-20 leaders meet in the shadow of an ailing global economy and lingering Eurozone crisis, Prime Minister Manmohan Singh is expected to ask the European partners to come up with swifter solutions so that the economic growth of emerging markets like India is not trapped under its adverse impact.world Updated: Jun 17, 2012 12:45 IST
As G-20 leaders meet in the shadow of an ailing global economy and lingering Eurozone crisis, Prime Minister Manmohan Singh is expected to ask the European partners to come up with swifter solutions so that the economic growth of emerging markets like India is not trapped under its adverse impact.
With global anxiety rising, Singh, who has attended all the previous six summits since it was launched in Washington in 2008, along with US President Barack Obama are expected to prod European leaders to give world markets some confidence.
Singh and Obama have already agreed on the importance of steps to strengthen the resilience of the global economy in response to persistent risks in the Eurozone and elsewhere and on focussing on measures to boost global growth.
Obama made a telephone call to Prime Minister Singh on Thursday, a day after the India-US strategic dialogue, essentially to talk "about coordinating efforts" leading into the G-20 Summit in this Mexican resort town.
While Obama, Singh and other non-European G-20 leaders press for a quick-fix by the 17-nation Eurozone, it may not be a smooth sailing in the wake of reservations expressed by German chancellor Angela Merkel.
Merkel, the leader of Europe's largest economy, has vowed to resist pressure for a quick Eurozone recovery. According to Merkel, Europe must tackle its problems "at the roots" by lowering debt and increasing economic competitiveness.
While the Eurozone crisis is expected to keep the G-20 leaders engaged at the two-day Summit starting tomorrow, it is unlikely that the dip in economic growth in emerging markets like India and China will come up at the multilateral parleys.
India and China are traditional drivers of the world economic growth. It is highly unlikely for the G-20 to point out that the Indian economic growth is losing steam and that it should take necessary measures to restore the economy on the growth path.
India recently became the latest developing economy to see its once breakneck growth slow sharply as it recorded its slowest expansion in almost a decade.
The economy expanded at an annual rate of 5.3 per cent in the three months to March, from 9.2 per cent in the same period last year, as the agricultural and manufacturing sectors were hit by sharp slow down.
With that, it joined the Brazilian and Chinese economies, both of which have shown signs of slowing in recent months.
Host nation Mexico has already said that the most important topic of the summit is how to promote economic recovery and growth.
The members of the G-20 include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, Republic of Korea, Turkey, UK, US and the European Union.
Singh and other world leaders are also expected to work for a coordinated response to deal with the Eurozone problems.
"It is imperative that the G-20 countries work in coordination to implement policies that promote sustained growth," Singh said ahead of the G-20 summit.
Singh will also travel to the Brazilian city of Rio de Janeiro on Wednesday for the Rio+20 Summit against the backdrop of growing challenges of economic degradation before returning home on Saturday after an overnight halt at Pretoria in South Africa.
The outcome of the meeting of the five-nation BRICS countries on the sidelines of the G-20 Summit tomorrow is also been keenly awaited.
As current Chair of BRICS, India will host an informal meeting of BRICS leaders to exchange views on the agenda of the Summit. Besides India, the other members of the five-nation bloc that have been the new growth poles of the global economy are Brazil, Russia, China and South Africa.
It will be Singh's first meeting with Vladimir Putin after his return as Russian President.
According to Michael Froman, US deputy national security advisor for international economic affairs, the ongoing Euro crisis is the "biggest issue" in the global economy right now, and expected the G-20 leaders to spend a "disproportionate" amount of their time to talk about the state of the global economy, "particularly what's going on the eurozone.
At the G-20 Summit, Prime Minister Singh will stress the need to ensure primacy of the development dimension in G-20 deliberations and also to focus on investment in infrastructure as a means of stimulating global growth.
It will be also emphasised that the world cannot expect the emerging economies alone to solve the problems afflicting global economic growth.
Singh and other G-20 leaders are also expected to send a strong message on the need for the Eurozone to stabilise market confidence. On other issues, India would like to hear what steps the G-20 will outline in fighting protectionism and promoting sustainable development.
Anxious G-20 leaders will be also looking for signs that European players at the table, led by Germany, are moving on their own agenda.
That essentially meant pursuing a banking union to match the monteary union linking the Eurozone, taking steps to keep borrowing costs down in the weakest nations and injecting life into economies with the growth plans involving public money.
According to Treasury Undersecretary Lael Brainhard, the focus in Mexico will be "ensuring our European partners are escalating their response" to stabilising a dicey situation.
Though the G-20 Summit will be dominated by the Eurozone crisis, the European Union leaders would be appealing to other G-20 countries to fight protectionism and to further strengthen the multilateral trading system. According to EU, the recent surge in protectionism is a major concern and the G-20 should strengthen the existing monitoring mechanism.
The G-20 leaders are also expected to focus on how to reinforce international financial institutions, encourage sustainable development, improve energy sufficiency and measures to deal with the climate change problem.