SAO PAULO, Nov 7: Finance chiefs from the leading developed and emerging economies will face a difficult challenge in trying to reshape global economic rules and tackle the current crisis, analysts say.

The Group of 20, whose finance officials meet this weekend in Sao Paulo ahead of a summit in Washington November 15, were expected to agree on broad themes for economic cooperation but few concrete proposals, say economists.

One major glitch is that the United States, already lukewarm to any major new initiatives, is unlikely to agree to any new consensus with President George W. Bush preparing to leave office and president-elect Barack Obama still working on his transition.

Under the circumstances, “it is hard to figure how this can lead to any concrete proposals for coordinated action to save the global economy,” said Carl Weinberg, chief economist at High Frequency Economics.

“Hard action will have to await the January inauguration of the new US president… As for the Sao Paulo meeting this weekend, the best we can hope for is that no disagreements that might undermine an open exchange of ideas in Washington explode during the two-day confab.”

Earlier this week, the White House played down prospects for any new dramatic proposals and economists say that the G20 may foster more coordination, there is very little unity on specific global plans like the “Bretton Woods” agreements at the end of World War II.

Nariman Behravesh, chief economist at US-based research firm IHS Global Insight, said the idea of a Bretton Woods II agreement, presumably with a new fixed exchange rate system “is a nonstarter.”

“I can’t imagine the Americans or Japanese or British would go along with fixed exchange rates,” he said.

Behravesh said one potential area for discussion is harmonising regulations but noted that “the devil is in the details.”

“It’s not going to be French regulations, or German regulations ... there was a lot of talk about global financial architecture after the Asian financial crisis but nothing came of it.” He said there might be some review of the Basel accords on capital adequacy in the banking system. At the same time he said that “some people suggest the shenanigans of the financial institutions, the off balance sheet bookkeeping was to get around the Basel accords.”

“I can argue for some global financial regulation, but I’m very doubtful something will happen. There are too many competing interests, and not a lot of these governments want to have their hands tied.”

Finance ministers and central bank governors from the G20 brings together includes the G7 group of the world’s seven most advanced economies (Britain, Canada, France, Germany, Italy, Japan and the United States) plus the so-called BRIC group of key emerging economies (Brazil, Russia, India and China).

The other nations making up the group are: Argentina, Australia, Indonesia, Mexico, Saudi Arabia, South Africa, South Korea and Turkey.

The European Union is also represented by its rotating president and by the governor of the European Central Bank, Jean-Claude Trichet.

International Monetary Fund chief Dominique Strauss-Kahn and World Bank president Robert Zoellick will be attending the Sao Paulo meeting, their offices confirmed.

Irwin Stelzer, director of Economic Policy Studies for the Hudson Institute in the United States, said the Europeans effectively forced the gathering but that even in Europe there are strong divisions.

“It seems Sarkozy likes the idea of a Bretton Woods II ... which would mean fixed exchange rates and a whiff of protectionism,” Stelzer said.

British Prime Minister Gordon Brown, said Stelzer “is a free trader and wants a new international architecture, including a stronger role for the IMF and World Bank.”—AFP