G20 seeks global economy reboot
MILAN (AFP) — G20 finance ministers and central bankers will gather for a video conference led by Italy Friday, hoping to align plans for relaunching the global economy after the coronavirus pandemic and to limit harm to the worst-off nations shut out of the race for vaccines.
Beginning at 12:30 p.m. local time (1130 GMT), the meeting is the first in post for US President Joe Biden’s new Treasury Secretary Janet Yellen, expected to be far less confrontational than Donald Trump’s representatives at past gatherings.
“With the new American administration, it will certainly be easier to reach a deal” for increased aid to poorer nations, international economy professor Lucia Tajoli of Milan’s Polytechnic business school said.
But while “Joe Biden’s approach to international cooperation is much more open... it won’t be easy to gather funds given the economic crisis hitting many countries,” she added.
On Thursday, Washington urged wealthy G20 countries to launch a truly global, coordinated vaccination campaign.
“Without access to vaccines, low-income countries in particular will experience further tragic loss of life and needlessly delay their economic recoveries,” Yellen wrote in an open letter to G20 finance counterparts.
Yellen also signaled openness to issuing new so-called Special Drawing Rights at the International Monetary Fund to worse-off countries, reversing a Trump position.
Several G20 countries have already suggested the move, after the financial instruments — which can be exchanged for US dollars, euros, Chinese renminbi, Japanese yen or British pounds — proved their worth as crisis firefighting tools in 2009.
Financial crisis-era SDR allocations amounted to around half the $500 billion now under discussion.
Last year, the rich country club also agreed a pause in debt interest payments for the poorest countries, extending it until 30 June this year. And in November the G20 finance ministers agreed a framework for reducing debt burdens.
So far Chad, Zambia and Ethiopia have asked for their debt to be restructured.
So far just 46 of the 73 eligible countries have delayed debt interest payments worth a total of $5.7 billion.
Chad, Zambia and Ethiopia have asked for their debt to be restructured.