G20 promises $5t injection
RIYADH/WASHINGTON: Leaders of the Group of 20 major economies pledged yesterday to inject more than $US5 trillion ($NZ8.3 trillion) into the global economy to limit job and income losses from the coronavirus and “do whatever it takes to overcome the pandemic”.
Showing more unity than at any time since the G20 was created during the 200809 financial crisis, the leaders said they committed during a videoconference summit to implement and fund all necessary health measures needed to stop the spread of the virus.
“The G20 is committed to do whatever it takes to overcome the pandemic”, along with the World Health Organisation (WHO) and other international institutions, they said.
Their statement contained the most conciliatory G20 language on trade in years, pledging to ensure the flow of vital medical supplies and other goods and to resolve supply chain disruptions.
But it stopped well short of calling for an end to export bans that many countries have enacted on medical supplies, the G20 leaders saying their responses should be coordinated to avoid “unnecessary interference.”
“Emergency measures aimed at protecting health will be targeted, proportionate, transparent, and temporary,” they said.
The G20 leaders also expressed concern about the risks to fragile countries, notably in Africa, and populations like refugees, acknowledging the need to bolster global financial safety nets and national health systems.
“We are strongly committed to presenting a united front against this common threat,” the G20 leaders said their statement.
Saudi Arabia, the current G20 chair, called the summit amid earlier criticism of the group’s slow response to the disease. Saudi King Salman, in opening remarks, said G20 countries should resume the normal flow of goods and services, including vital medical supplies, as soon as possible to help restore confidence in the global economy.
The group said it was “injecting over $5 trillion into the global economy, as part of targeted fiscal policy, economic measures and guarantee schemes” to blunt the pandemic’s economic fallout.
The amount is about the same as G20 countries injected to prop up the global economy in 2009. But a US relief bill is pledging $2 trillion in fiscal spending, more than double its commitment from that crisis.
US President Donald Trump said later the videoconference showed “tremendous spirit to get this over with.”
“We’re handling it a little bit in different ways but there is great uniformity,” Trump said.
Trump and French President Emmanuel Macron agreed in a call yesterday on the importance of cooperation through the G20 and other groupings to help international organisations “eliminate the pandemic quickly and minimise its economic impact”, the White House said.
The meeting displayed little acrimony, an observer to the meeting said.
“Everyone realises that it is essential to preserve jobs, and to maintain trade flows, not disrupt the supply chains,” said one Brazilian government official.
No country advocated “total confinement,” mainly because most of the countries in G20 are not implementing such moves.
While the group pledged joint action, the leaders’ statement lacked the urgency of the 2009 effort, said Mark Sobel, a former US Treasury and International Monetary Fund official.
“It’s endorsing what’s already being done in various countries but it isn’t offering a multilateral, global vision.” said Sobel.
The G20 leaders also asked the International Monetary Fund and the World Bank Group “to support countries in need using all instruments to the fullest extent”.
IMF Managing Director Kristalina Georgieva plans to ask the Fund’s steering committee today to consider doubling the current $US50 billion in emergency financing available to help developing countries deal with the virus, a source said.
On the health response, the G20 leaders committed to close the financing gap in the WHO’s response plan as well as to expand manufacturing capacity of medical supplies, strengthen the response to infectious diseases, and share data.