A united front against COVID-19

The G20 must continue to act decisively on two fronts: sustaining and strengthening the policy response to the pandemic, and laying the foundations for a better future – which can only be achieved with a results-oriented, forward-looking, sustainable perspective

Reflecting on the past year since Saudi Arabia assumed the G20 presidency, I can say it has undoubtedly been a challenging time for everyone around the world: individuals, families, businesses and, not least, governments. The speed, severity and spread with which COVID-19 shocked the world and the global economy are unlike anything we have experienced. The G20 had to adjust quickly to address the health, economic and social effects of the pandemic.

As it began to unfold, overcoming this multifaceted challenge became the G20’s urgent and collective priority. On 26 March 2020, the Saudi G20 presidency convened the Extraordinary G20 Leaders’ Summit to advance a coordinated response.

Since the COVID-19 crisis is first and foremost a global health emergency, the G20 has pledged more than $21 billion to bridge the short-term financing gap in global health. The G20 also supported the launch of the Access to COVID-19 Tools Accelerator Initiative as a landmark of timely global collaboration for the accelerated research, development, manufacturing and distribution of diagnostics, therapeutics and vaccines, with the aim of ensuring equitable and affordable access for all – key to overcoming the pandemic and supporting global economic recovery.

The G20 has undertaken swift, wide-ranging and substantial action, including through the implementation of unparalleled fiscal, monetary and financial stability actions, while ensuring that international financial institutions and relevant international organisations can provide critical support to emerging, developing and low-income countries.

In April 2020, G20 finance ministers and central bank governors endorsed Supporting the Global Economy through the COVID-19 Pandemic. This action plan sets out key principles and our commitments to drive international economic cooperation as we work towards a robust and sustained global economic recovery. G20 members committed to making the action plan a living document, to respond promptly to the evolving health and economic situation.

Largest support package on record

G20 members thus injected more than $11 trillion into the global economy, to help minimise the economic and social damage from the pandemic, restore global economic growth, maintain market stability and strengthen resilience, including by protecting jobs and household incomes. This is by far the largest support package on record. It has lessened the economic jolt and helped prevent growth from worsening.

Supporting the most vulnerable countries has also been a key priority of the G20. The G20 launched its historic Debt Service Suspension Initiative, allowing 73 eligible countries to defer an estimated $14 billion owed to bilateral creditors and enabling them to strengthen their fight against the pandemic and its impacts. In October 2020, G20 finance ministers and central bank governors extended the DSSI by six months to further support the poorest countries. The G20 left no stone unturned in engaging private creditors in the debt freeze. It is time that private creditors join the DSSI.

Given the scale of the pandemic, the significant debt vulnerabilities and the deteriorating outlook in many low-income countries, G20 finance ministers and central bank governors agreed on a coordinated approach in the Common Framework for Debt Treatments beyond the DSSI on a case-by-case basis. Our presidency has consistently focused on ensuring that solidarity and inclusiveness are central to the response.

The G20 has worked with international financial institutions to implement a strong, swift financial response for countries in need. The International Monetary Fund deployed a comprehensive support package with rapid and enhanced emergency financing, with 81 countries receiving financial assistance totalling $101 billion since March 2020.

The G20 has also called on multilateral development banks to further support emerging, developing and low-income countries. To this end, the MDBs committed to provide $230 billion to support their response to the pandemic, including $75 billion for DSSI-eligible countries from April to December 2020 alone.

Now, as we gradually transition from emergency response to recovery, the G20 has started to design a trajectory of growth truly in line with its long-standing objective of achieving strong, sustainable, balanced and inclusive growth. G20 finance ministers and central bank governors endorsed updates to the action plan at their October 2020 meeting.

As we prepare for the G20 Riyadh Summit in November 2020, it is critical that the G20 continues to act decisively on two fronts: first, sustaining and strengthening the policy response until a long-lasting and sustainable recovery is secured, and second, laying the foundations for a better future, including by helping the world emerge from the pandemic stronger and more resilient against future shocks. This cannot be achieved without focusing relentlessly on results-oriented, forward-looking and sustainable perspectives.