G20 to debate the post-pandemic world and debt reduction
© Reuters. United Nations Secretary-General Antonio Guterres is holding a virtual press conference from his New York office before the annual world leaders of the G20 summit in Riyadh, Saudi Arabia
By Jan Strupczewski
BRUSSELS (Reuters) – The leaders of the top 20 global economies (G20) will discuss this weekend how to deal with the unprecedented COVID-19 pandemic that has caused a global recession and how to manage the recovery is as soon as the coronavirus is under control.
At the top of the agenda are the purchases and global distribution of vaccines, medicines, and tests for low-income countries that cannot afford such expenses. The European Union will call on the G20 on Saturday to invest $ 4.5 billion in aid.
“The main theme will be to increase global cooperation to fight the pandemic,” said a senior G20 official who was part of preparations for the two-day summit chaired by Saudi Arabia, which was held practically because of the pandemic.
To prepare for the future, the EU will propose a treaty on pandemics.
“An international treaty would help us to react more quickly and in a more coordinated manner,” said the chairman of EU leader Charles Michel of the G20 on Sunday.
As the global economy recovers from the depths of the crisis earlier this year, the momentum is slowing in countries with rising infection rates, the recovery is uneven and the pandemic is likely to leave deep scars, the International Monetary Fund said in a report for the G20 summit .
Particularly at risk are poor and highly indebted countries in the developing world, which are “on the brink of financial ruin and escalating poverty, hunger and immeasurable suffering,” said United Nations Secretary-General Antonio Guterres on Friday.
To remedy this, the G20 will advocate a plan to extend the debt service moratorium for developing countries by six months until mid-2021 with the possibility of further extension, according to a draft G20 message from Reuters.
European members of the G20 are likely to push for more.
“More debt relief is needed,” Michel told reporters on Friday.
Debt relief for Africa will be a key theme of Italy’s G20 presidency in 2021.
TRADE AND CLIMATE CHANGE
The European nations in the G20 will also seek fresh impetus for the stalled World Trade Organization (WTO) reform in hopes of capitalizing on the impending change in US administration. The outgoing President Donald Trump advocated bilateral trade agreements over work through international bodies.
The change in US leadership also raises hopes for more concerted efforts at the G20 level to combat climate change.
Following the example of the European Union, half of the G20 members, including Japan, China, South Korea and South Africa, are already planning to become climate-neutral or at least climate-neutral by 2050 or shortly thereafter.
Under Trump, the United States withdrew from the Paris Agreement to Combat Climate Change, but the decision is likely to be reversed by President-elect Joe Biden.
“Of course we expect fresh impetus from the new US administration on this issue, thanks to the President-elect’s declaration that the US will re-accede to the Paris Agreement,” said European Commission President Ursula von der Leyen.
In order to re-finance the fight against climate change, the EU will urge the G20 to agree on common global standards for “green” investments.
This would help attract the massive private investment required as many mutual funds are eager to invest in green projects but there is no agreed type of choice. The EU is already working on such standards with the aim of introducing them by 2022.