| G20 NATIONS PUT UP A UNITED FRONT VS COVID-19 |
The work of G20 nations continues unabated. Indeed, it has taken an even more important turn as the group of the world’s richest economies is leading the way in developing a strong and collaborative global response to fight COVID-19.
A number of issues have come to the forefront as the global economy looks to mitigate the impact of the pandemic and turn to recovery. These include a focus on ensuring macroeconomic and financial stability especially in emerging economies, accelerating the digital economy, and boosting financial inclusion.
With Saudi Arabia as president of the G20 group this year and host of the heads of state G20 summit in November, the kingdom has taken the lead in developing a robust strategy to combat the health crisis.
“In response to COVID-19 pandemic, G20 countries have implemented unprecedented fiscal, monetary and financial stability measures and ensured that international financial institutions can provide critical support to developing and low-income countries,” according to Mohammed Aljadaan, Saudi’s minister of finance.
The minister pledged to co-ordinate with G20 member countries to promote sustainable financing for developing countries, support the return of capital flows to emerging markets and developing countries, build resilience and promote more sustainable sources of financing.
A USD 14 billion Debt Service Suspension Initiative has already been rolled out by the group, and received 41 applications, including from 26 African countries.
“The pace of implementation of the DSSI has significantly accelerated in June, in particular with the clarification that requesting the DSSI for official bilateral creditors does not oblige beneficiary countries to make the same request to private creditors, and credit rating agencies having clarified in parallel their position on the DSSI,” said Guillaume Chabert, French Co-Chair of the G20 International Financial Architecture Working Group.
Separately, G20 members and other countries have earmarked US$21 billion to fund global health. These funds will focus on diagnostics, vaccines, therapeutics and research and development to beat the pandemic and will be developed for the benefit of all.
Another key issue is financial inclusion, which has hit the poorest people hardest as they often do not have bank accounts or Internet access, or are able to afford smartphones to bank electronically.
A separate G20 meeting agreed to “commit to promote financial inclusion by maintaining accessible and affordable financial products and services through conventional and responsible digital means while ensuring financial consumer protection”.
FACILITATING TRADE
The influential group of economies are also keen to keep borders open to facilitate trade and ensure that citizens of all countries can continue to buy essentials and other products, even if they are in lockdown.
The collaborative spirit is vital as global supply chains are intricately connected across many countries.
In May, the G20 nations pledged to refrain from introducing export restrictions on agriculture products and avoid stockpiling food. In addition, they have agreed to accelerate electronic documentation, do away with restrictions on production of protective personal equipment and medical supplies, share experience and best practices, and streamline logistics and operation to ensure timely delivery of essential products, such as food and medical supplies.
Finally, the digital economy has also gained increased importance and will remain a major theme once the world gets past the health crisis.
In a recent meeting, G20 nations said they will invest in the digital economy to “accelerate our collective response to the COVID-19 pandemic as well as to enhance our ability to prevent and mitigate future crises.”
This included developing robust telecom and Internet infrastructures especially in underserved areas to make the digital economy more inclusive.
Investments in digital technologies to improve healthcare, and using innovation to help citizens participate in the global economy are some of the other aspirations of the group. At the same time, the digital economy would need strong firewalls to protect data and information of corporations and individuals in order to create a trusted online environment.
“This present crisis carries with it an opportunity for governments to encourage the use of our most advanced technologies in order to prevent, mitigate, treat, and defeat future pandemics, and to facilitate the development of digital innovations that will enable a full economic recovery,” the nations said in a joint press release.
“The Digital Economy Task Force will encourage the dissemination of current and emerging digital tools for fighting this pandemic. Taking stock of and building on this experience, Italy is open to support and continue dialogue on the application of advanced technologies to fight pandemics in the upcoming G20 Presidency.”
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