G20 vows to fight coronavirus impact on poor nations
RIYADH: G20 finance ministers and central bankers pledged on Tuesday to address the debt burden of low-income countries and deliver aid to emerging markets as part of a plan to combat the coronavirus pandemic.
The announcement followed a second round of virtual talks after G20 leaders pledged a “united front” last week and said they were injecting $5 trillion into the global economy to head off a feared deep recession.
The ministers and bankers from major industrialised and emerging economies also welcomed a $160 billion World Bank relief package to be deployed over the next 15 months to support its member countries, the Saudi hosts said in a statement.
They agreed to press ahead with a plan to address “the risk of debt vulnerabilities in lowincome countries” and work to “swiftly deliver... financial assistance to emerging markets and developing countries”, the statement said.
US President Donald Trump and Russian President Vladimir Putin joined last week’s emergency summit chaired by Saudi Arabia’s King Salman, who called for coordinated action while facing pressure to end an oil price war between Riyadh and Moscow that has roiled energy markets.
The talks follow criticism that the G20 has been slow to address the COVID-19 pandemic, which has left more than 38,000 dead worldwide and triggered financial shock waves as some two-fifths of the globe’s population is put under lockdown.
As concerns mount for poorer countries without access to capital markets or adequate health facilities, G20 leaders have pledged to work with bodies such as the International Monetary Fund to deploy a robust financial package to support developing nations.
“We welcome the decisive actions many of you have taken to shield people and the economy from COVID-19, that led to a decline in volatility in major financial markets in recent days,” IMF managing director Kristalina Georgieva said at Tuesday’s meeting.
“Nonetheless we remain very concerned about the negative outlook for global growth in 2020 and in particular about the strain a downturn would have on emerging markets and low-income countries.”
G20 trade and investment ministers also held an extraordinary meeting on Monday, as they assess the impact of the crisis on global trade.
They said they were working to ensure the flow across borders of medical supplies and equipment -- which are in short supply in some hard-hit nations -- as well as critical agricultural products, and other essential goods and services.
“We will guard against profiteering and unjustified price increases,” they said in a statement, while also warning against trade barriers and disruption to global supply chains.
Obaid Humaid Al Tayer, the UAE’S Minister of State for Financial Affairs, participated in the second virtual meeting with G20 ministers of finance and central bank governors, to discuss the next steps to develop and activate the G20 and global financial institutions’ action plan to contain the negative effects of coronavirus, COVID-19, and coordinate the necessary measures to fulfil the G20 leader’s commitment of directing all available resources to face the global challenges posed by this virus.
Obaid Al Tayer stressed the need to continue uniting international efforts to address this pandemic, and lessen its economic and social impact on the region and the world. He also reiterated the importance of these meetings, especially in the face of the unprecedented challenges, which call for extraordinary measures to be taken to mitigate the effects of the pandemic, ensure financial stability, continued growth and sustainable economic development.
He said: “We are keen on continuing coordination and cooperation by providing support to local and international efforts to face the pandemic’s challenges along with its health, social and economic impacts, while stressing on the importance of the actions and commitments that the G20 leaders adopted during their last meeting.”
Separately, The International Monetary Fund said on Tuesday its members have agreed to renew arrangements ensuring the fund has lending firepower, especially as the coronavirus pandemic creates a demand for financing.
“This action is part of a broader package on IMF resources and governance reform that will help maintain the IMF’S lending capacity of $1 trillion,” the fund said in a statement.
The executive board of the Washington-based development lender on Monday approved the bilateral borrowing arrangements to take effect January 1, 2021, just after the current round expire, which will be in place for three years but can be extended through the end of 2024.