Saudi Arabia hosts G20 talks on coronavirus recovery and debt crisis | Business and economy
G20 finance ministers and central bankers are set to hold talks aimed at boosting global economic recovery from a coronavirus-triggered recession amid growing calls to expand debt relief for affected poor countries by the crisis.
The virtual talks, hosted by Saudi Arabia, come on Saturday as the growing pandemic continues to batter the global economy and activists warn of a looming debt crisis in poverty-ridden developing countries.
Ministers and bankers “will discuss [the] global economic outlook and coordinate collective action for a robust and sustained global economic recovery,” G20 organizers in Riyadh said in a statement.
The talks, which will be chaired by Saudi Arabia’s finance minister Mohammed al-Jadaan and central bank governor Ahmed al-Kholifey, come a day after the European Union held its first face-to-face summit in five months to discuss a post-virus economic bailout. plan.
Kristalina Georgieva, Managing Director of the International Monetary Fund, warned that despite some signs of recovery, the global economy faces sustained headwinds, including the possibility of a second wave of COVID-19.
“We are not off the hook yet,” Georgieva said in a message to G20 finance ministers, warning that the pandemic was likely to increase poverty and inequality.
Downgrading its growth forecast, the Washington-based crisis lender said last month that it expected global gross domestic product (GDP) to fall 4.9% this year due to a contraction more deeper than expected during the shutdowns.
The $11 trillion in stimulus offered by G20 countries helped avert a worse outcome, but “those safety nets must be maintained as needed and, in some cases, expanded,” Georgieva said.
In April, the G20 countries announced a one-year debt freeze for the world’s poorest countries.
Campaigners have criticized the measure as entirely insufficient to avoid the ripple effects of the pandemic.
France announced on Friday that it would ask the G20 to extend the debt service suspension.
“The economic crisis will persist in 2021 all over the world,” French Finance Minister Bruno Le Maire said in a statement.
“France calls on the G20 countries to extend the moratorium on debt service to give the poorest countries the means to overcome” the crisis.
So far, 41 of the world’s 73 poorest countries have applied for the G20’s debt service suspension initiative, saving them up to $9 billion this year, the organizations say. charities Oxfam, Christian Aid and Global Justice Now.
But the 73 countries are still required to pay up to $33.7 billion in debt repayments through the end of the year, the charities said in a research report released Thursday.
“The global economy has been hit harder by the coronavirus than the already dire predictions we saw in April – G20 finance ministers are mandated to avert impending catastrophe for hundreds of millions of people,” he said. said Chema Vera, acting executive director of Oxfam.
“They have to do [the initiative] legally binding to cancel all debt payments, including private and multilateral, until the end of 2022 and to also include middle-income countries,” he added.
“An eight-month bilateral debt freeze alone does not free up enough money or time for the world’s poorest countries to deal with the pandemic and its effects.”
Amnesty International has also called on G20 countries to “cancel the debt of the poorest countries for at least the next two years”.
“COVID-19 has exposed the stark inequalities that exist in our world,” said Julie Verhaar, Acting Secretary General of Amnesty.
“If we are to build resilience to future crises, we need to make long-term structural changes that will require courage and leadership from G20 countries.”
Argentine Foreign Minister Felipe Sola said he would urge the G20 to create a global “solidarity fund” to tackle rising poverty in countries affected by the virus.
“We want debt decisions, not only for the poorest countries but also for middle-income countries that are impoverished” due to the pandemic, he told reporters in Buenos Aires.
But it was unclear how receptive the group would be to such requests.
The world’s 20 most industrialized nations are scrambling to defend their virus-ravaged economies amid forecasts of a deepening recession.
Last month, the Organization for Economic Co-operation and Development (OECD) said measures to curb the disease had caused a record 3.4% drop in the GDP of G20 economies in the first three months of 2020. .
It’s the biggest drop since the Paris-based agency started compiling data in 1998.