Post-pandemic economic growth dominates G-20 Summit

The Riyadh Summit focussed both on handling the pandemic and the global economic recovery.

The virtual G20 Summit in Riyadh, which was organized under the direct supervision of the Saudi Crown Prince Mohammad bin Salman (MbS), was indeed able to showcase the leadership capability of the Kingdom on the global stage.

As expected the coronavirus pandemic topped the agenda of the two-day Group of 20 major economies, with countries committing to ensure “affordable and equitable” access to coronavirus vaccines worldwide and to be prepared to deal with future health crises.

International pandemic treaty
Charles Michel, president of the European Council, proposed an international agreement on the pandemic to prevent future pandemics. “It should be negotiated with all nations, UN organizations, and agencies, in particular the WHO. The WHO must remain the cornerstone of global coordination against health emergencies”, Michel said.

The G20 leaders pledged over $21 billion at the outset of the crisis to support funding in global health capacities, according to a statement by G20. Moreover, the members have injected over $11 trillion so far to shield the economy and protect livelihoods, it said.

International leaders expressed their collective determination to strengthen COVID-19 vaccine production and distribution, extend social protection guarantees to low-income countries, and cement crucial debt-relief extensions.

Saudi vision
Saudi King Salman bin Abdulaziz Al Saud in his closing remarks at the summit stressed that cooperation is necessary today more than ever to face the impact of the COVID-19 pandemic and to build a prosperous future for the people of the world. He also noted that G20 has achieved a lot this year.

“We have adopted important policies that will achieve recovery all the way to an economy that is resilient, sustainable, inclusive, and balanced,” he said, adding that these policies will also maintain the momentum to make the global trade system work for all and create the conditions to achieve sustainable growth.

Though the Saudis wanted to sell a positive narrative of reform and change in the kingdom and showcase the country’s future ambitious projects like the Neom city, the plans were diluted due to the on-going pandemic, yet by conducting the flawless virtual summit they were able to showcase the country’s technological advancement to a certain degree.

Indian response
Prime Minister Narendra Modi addressed the Summit virtually and reiterated the importance of reformed multilateralism in order to fight Coronavirus effectively across the world.

In his virtual address, PM Modi started his speech by stating, “We are focused on saving citizens and economy from the pandemic.” and went on to turn everyone’s focus toward the changing climatic condition. “Climate change must be fought not in silos but in an integrated, comprehensive and holistic manner”, he said. Along with highlighting ‘self-reliant’ India, he also talked about women’s empowerment and how it can be the pillar for the overall development of the nation.

America’s nonchalance
As the timing of the summit and US presidential elections clashed, MbS was not able to rope-in the Saudi ally, President Trump, in any significant role during the summit. Reports say that Trump made a brief appearance via Zoom to extol his administration’s efforts at combating the pandemic and then left to play a round of golf. President-elect Joe Biden had described Saudi Arabia as a “pariah” state in 2019, stating in October that his administration would “reassess our relationship with the Kingdom, end US support for Saudi Arabia’s war in Yemen, and make sure America does not check its values at the door to sell arms or buy oil.” However, the Saudis hope that that was just electioneering talk. Prince Faisal bin Farhan Al Saud, the Saudi foreign minister speaking to Reuters, said: “I’m confident that a Biden administration would continue to pursue policies that are in the interest of regional stability.” The foreign minister might be correct in that assessment. But it is far less likely that the Biden White House will buy into the positive narrative of reform and change, which the Saudis are pushing forward.

Collective Future actions
On the question of navigating the pandemic collectively, the G20 correctly indicated that the “unprecedented” financial and humanitarian costs can be best challenged through an even stronger focus on COVID-19 related health, economic, and social exigencies faced by developing countries at present.

Turkish President Recep Tayyip Erdogan said decisions taken at this year’s G20 summit would prove decisive in global efforts to curb the adverse effects of the COVID-19 pandemic and in meeting the world’s expectations from the group.

Sustaining the economic growth
In his speech, Russian President Vladimir Putin suggested a further search for common approaches to reforming the World Trade Organisation (WTO) in accordance with modern challenges.

In her remarks at the summit, German Chancellor Angela Merkel also emphasized that the pandemic made governments more conscious that economies must grow sustainably rather than “at the expense of environmental degradation.” “There is a desire to learn from the pandemic and make the economy more sustainable,” she said.

Other crucial global issues such as the economic recovery, reform of the WTO, taxation of the digital economy, and ways to support low-income countries were also discussed at the summit.

Many countries across the globe are facing huge economic stress and as many as 48 countries have already requested debt relief under the Debt Service Suspension Initiative (DSSI), equalling some $5.7 billion in critical debt service deferral for this year alone.

The G20 leaders committed to implementing the DSSI including its extension through June 2021. They recalled their support to the WTO reform process in the lead up to the 12th WTO Ministerial Conference. The group agreed to strive to find a consensus-based solution for a globally fair, sustainable, and modern international tax system by mid-2021.

In a welcome move, finance officials from all 20 states will continue to monitor global economic behavior into the next year, and determine whether the further extension of the DSSI debt freeze merits consideration. Thus, it can be surmised that G20’s demonstrated desire to internationalize economic recovery prospects, instead of confining them within its own territorial bounds, signifies its commitment to equitable global recovery.

The G20’s embrace of its newly established Global Innovation Hub for Improving Value in Health is also a step in the right direction. The Hub will serve as a dedicated platform for knowledge sharing and position itself as a gateway for better Universal Health Coverage across countries. It seeks to accomplish this goal by collecting evidence-informed expertise, and determine which health policies nations should fund, whether these health interventions reflect that country’s actual needs, and how financial risks to a given populace are best minimized.

Action on Climate Change
By taking climate initiative into its own hands, the G20 dispelled the notion that an external stimulus may be necessary to trigger progression on climate-aligned SDG commitments. Instead, the desire to commit to voluntary climate communication is a welcome departure from previous evidence that found G20’s climate commitments to be at relative odds with the emissions reductions goals set out under the Paris Accord. Speaking about the climate issue, Merkel said all states except the US made a commitment to follow the goals of the Paris Climate Agreement.

A resolute G20 alliance, therefore, can thrive on the back of clearly chalked-out priorities. Balancing its resolve with delivery can lead to accelerating the cause of a strong, sustainable, balanced, and inclusive post-COVID-19 era around the globe.