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Emerging economies top priority at G-20 meeting

JIJI

Finance ministers and central bank chiefs from the Group of 20 advanced and emerging economies are expected to focus on the uncertainty surrounding the emerging economies at a two-day meeting in Sydney.

Finance Minister Taro Aso regards concerns about emerging economies and the U.S. Federal Reserve’s tapering of its quantitative easing as important issues the world economy faces.

Since views differ amid the anxious emerging economies and their calm advanced counterparts, whether the G-20 can hammer out a cooperation framework in a joint statement is to be the focal point of the meeting, which began Saturday.

Aso and Bank of Japan Gov. Haruhiko Kuroda will attend the closely watched meeting. It will be the first international conference for U.S. Federal Reserve Chairwoman Janet Yellen since she took office earlier this month.

Since January, financial markets have been swung by global stock plunges triggered by sharp currency depreciations in the emerging countries.

Massive funds had poured into Turkey, Brazil and India thanks to the Fed’s monetary easing, but the flows began to reverse after the U.S. central bank started to taper its monetary stimulus.

Emerging economies, fearing a possible financial crisis, are calling on the Fed to give due consideration.

However, Yellen plans to stay the course and reduce the amount of Fed asset purchases, saying the emerging markets are not risks to the U.S. economy. Many emerging economies that saw their currencies weaken have feeble economic foundations, including current account deficits, and political risks.

The advanced countries are playing it cool. Jose Vinals, director of the International Monetary Fund’s Monetary and Capital Markets Department, says concerns in emerging countries stem chiefly from domestic issues.