PM to visit Canada tomorrow to attend G-20 summit

Prime minister Manmohan Singh leaves tomorrow on a three-day visit to Canada for attending the G-20 Summit which will review the current status of the global economic recovery and discuss a tax to fund future bail out of banks, a proposal India is opposed to.

Singh, who will head a high-power Indian delegation to the two-day summit in Toronto on June 26 and 27, is expected
to place on record India's opposition to such a banking transaction levy on the ground that Indian banks did well during the 2008 financial crisis sparked by weak regulation norms in developed countries.

Notwithstanding the rejection of the tax idea at the G-20 finance ministers meeting in Busan in Seoul earlier this month, countries like the US, France and Germany, favour such a levy.

They are expected to pursue their demand in Toronto while the new British government has announced imposition of a banking levy in its first budget. 

Besides India, countries like hosts Canada, Japan and Brazil have their reservations on such tax-funded bailouts.

Finance minister Pranab Mukherjee, who attended the Busan meet, said that the G-20 communique was a compromise
because a section of the countries felt that there was no no need of having any such taxation.

"If there are well-placed regulations that can take care of this problem the health of the banks can be protected," he said.

The other issue that may come up prominently in the summit is the demand for reforming Yuan, a demand China opposes strongly even though it has set in a process of flexibility that has seen the currency gaining marginally against the US dollar.

China says the Summit leaders should look at ways to revive the global economic recovery and sustainable growth instead of concentrating their energies on a single currency.

The theme of the Toronto Summit, the fourth since 2008 Washington Meet called by outgoing president George W Bush to
tackle the global financial crisis, is 'Recovery and New Beginnings'.

Its focus is expected to be on implementation of the previous Summit decisions and review the current status of the global economic recovery and to chart future direction. 

The leaders are also expected to address the framework for strong, sustainable and balanced growth, reform of international financial institutions, financial regulatory reform and reiterate the fight against protectionism. 

Apart from G-20 leaders, including those of US, Britain, France and Germany, host Canada has also invited leaders of Spain, the Netherlands, Malawi (Chair of the African Union), Vietnam (ASEAN chair) and representatives of UN, World Bank and IMF to the Summit.

Arriving on June 26, prime minister Singh will participate in a reception followed by working dinner by his Canadian counterpart Stephen Harper.

On Sunday, the Summit opening plenary will be followed by other plenary sessions and conclude with a final plenary in the afternoon.

Singh will be accompanied by deputy chairman of Planning Commission Montek Singh Ahluwalia, his sherpa in the summit, National Security Adviser Shivshankar Menon, finance secretary Ashok Chawla and other officials.

On the sidelines of the Summit, he will also meet US president Barack Obama and Chinese president Hu Jintao.       

India will also be represented by CII and FICCI at the B-20 Summit of business leaders in Canada and youth leaders at the Youth Summit there.

At a bilateral level, Singh will be meeting Harper in an engagement that is expected to give further impetus to the economic and other cooperation between the two countries. 

They are expected to sign a deal providing for cooperation in the field of civil nuclear energy, paving the way for supply of uranium and cooperation in research, development, waste management and radiation safety. 

A number of agreements and MoUs are under active negotiations and are likely to be concluded and signed during the visit. These include cooperation in social security, mining, higher education and culture.