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G-20 meeting overshadowed by Syria strike

Update: September, 05/2013 - 12:28

SAINT-PETERSBURG – World leaders meet on Thursday at a G-20 summit in Russia where US President Barack Obama will strive to bridge deep divisions over his push for military action against the Syria.

Obama cleared the first hurdle on Wednesday in his race to win domestic congressional backing for punitive strikes but is also seeking broader international support.

Speaking during a trip to Stockholm he said the world had set "a red line" for Syria and it could not now remain silent in the face of the alleged chemical weapons attack on Damascus suburbs.

But Russian President Vladimir Putin, a fierce opponent of the proposed military action, warned on the eve of the summit he is hosting in Saint Petersburg that it would be unacceptable for the West to go ahead with military action against Damascus without UN Security Council approval.

The Kremlin demanded "convincing" proof that the administration of Bashar al-Assad was responsible for using chemical weapons against its own people.

Beyond convincing Russia, Obama has a tough sell ahead elsewhere, with China – another veto-wielding Security Council member state – having already expressed its "grave concerns" over unilateral military strikes.

German Chancellor Angela Merkel has repeatedly ruled out her country's participation in any US-led military strike against Assad's government, while the British parliament has also rejected the idea.

Syria is certain to be the top issue in the flurry of bilateral meetings between the leaders of the world's top 20 developed and emerging nations around the seaside Tsarist Konstantinovsky palace in Strelna on the Gulf of Finland seashore.

Slowing emerging economies

The International Monetary Fund has warned the G-20 that emerging economies were slowing more than expected and under pressure from US plans to slow its stimulus.

In a report prepared for the two-day summit of the G-20 major economies, the IMF said that recent indicators pointed to stronger growth in several advanced countries, but key emerging economies have slowed.

Since its July report on global developments and risks, the IMF said, growth projections for emerging economies are being revised downward "with risks still to the downside."

"The impulse to global growth is expected to come mainly from the United States in the near term," the report said.

"Overall, concerns about a prolonged period of sluggish global growth (a plausible downside scenario) remain elevated."

Brazil, China and India were mainly responsible for the loss of some 2.5 percentage points in emerging economy growth since 2010 levels.

Lower commodity prices also have hit the outlook for many commodity exporters.

Tightening global financial conditions, spurred by market conviction that the US Federal Reserve is close to reeling back its stimulus program, have added to the pressure on emerging economies.

Since May, when the Fed began signaling it would taper its $85 billion a month bond-buying program if the US economy continued to improve broadly, investors have pulled out of emerging economies seeking higher returns in the US and elsewhere.

The outflow of capital has driven emerging-market currencies sharply lower, from Brazil to India and Turkey. "Emerging economies were hardest hit following Fed 'tapering' remarks," the IMF said, adding that external financing pressures remained heightened in Brazil, India, Indonesia, Turkey and South Africa.

Emerging economies' policy responses should be tailored to the specific country and could include "some intervention to smooth current market volatility" in countries with adequate reserves.

The IMF predicted global growth to strengthen moderately in 2014 from 2013. But it warned, "downside risks remain and some have become more prominent." AFP

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