The Constantine Palace in St.Petersburg would be a bee hive of activity with leaders of G-20 nations converging together under a Syrian war cloud. The summit will also see a possible face off between Obama and Putin, two influential leaders of the world with divergent views on several matters including Syria. Global economic crisis is in the air again, this time centred on the volatility of emerging markets.
Clash of Titans
The summit would also expect clarity of thought from Obama, who has been on tenterhooks to decide on the military action on Syria, the President has stepped back from the brink on Saturday, delaying any imminent strike on Syria seeking an approval from the U.S. Congress. The face-off between Putin and Obama is creating huge excitement between the media and the political fraternity, in the G8 summit held at Northern Ireland in June this year Putin refused to comment on the Syrian crisis despite pressure from France and U.K, Obama likened his counterpart as “a bored kid in the back of the classroom”. Putin ignored the jibe by Obama and hit back at his American counterpart by referring Obama as a Nobel peace laureate and portraying U.S. global policy as a failure.
“We need to remember what’s happened in the last decade, the number of times the U.S. has initiated armed conflicts in various parts of the world. Has it solved a single problem ? he quizzed reporters on Saturday at the city of Vladivostok.
Relations have been sour between the countries since a brief period of harmony when George W Bush was at the helm of affairs, but in 2008 disputes over the purpose of setting up missile interceptors in Poland caused Moscow threaten to retaliate by aiming nuclear missiles at Poland and the Czech Republic, Putin had also publicly criticized the economic policies of Washington and the Fed for the global economic crisis. The Russian-Georgian Civil War also damaged the ties between both the countries with Putin accusing the U.S. of instigating the conflict and the U.S. considering of scrapping a civil nuclear co-operation pact.
Unlike the U.N. Security Council the G20 does not have powers and cannot overrule decisions taken by the countries, but it provides an ideal platform to discuss political agenda and possible repercussions with other superpowers including U.K., France, Germany and other countries. But Russia is strongly resisting a military intervention in Syria, its ally, unless it is in self defence, intervention cannot occur without the nod of United Nations Security Council otherwise it is illegal. (Russia which is a member of UNSC has voted against intervention). Russia also has economic considerations at stake, such as its arm sales of $ 5 billion to Syria, these sales assume importance after losing contracts of $ 4.5 billion to Libya and $ 13 billion to Iran due to western intervention.
“Action plan” to fight tax avoidance
One of the most important agenda of the summit would be the strategy to fight tax avoidance by multinational corporations, the action plan presented by the OECD aims to close down tax havens such as Ireland, Luxembourg and Bermuda and ensure businesses pay more tax in the countries where they make profits. The main proponents of the plan Germany, France, Britain and Russia want it to be adopted by the entire G20 and implemented in two years. The actions proposed by the OECD include taxpayers to disclose their aggressive tax planning arrangements to the fiscal authorities and make dispute resolution mechanisms more effective, corporates such as Apple, Face book, Amazon and Starbucks and more recently Vodafone have been accused of deceiving taxes to the government by using legal but controversial methods of tax evasion.
Emerging Market Volatility
A senior official, briefing reporters on condition of anonymity said the summit would take time to examine the reasons for the market volatility in India and other countries that erupted after the U.S. Federal Reserve announced that it would scale back its massive bond buying program by the end of this year, emerging economies such as India are experiencing huge capital outflows as foreign investors are seeing the possibility of better returns on their investments in U.S. India, in particular is experiencing its worst currency devaluation with rupee falling by 20 percent against the U.S. dollar.
Base Erosion and Profit Shifting to Dominate G 20 Agenda