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G20 leaders to pump in $5 trln into global economy in fight against coronavirus

Discussion in 'COVID-19 Coronavirus' started by ArabianEmpires&Caliphates, Mar 27, 2020.

  1. ArabianEmpires&Caliphates

    ArabianEmpires&Caliphates SENIOR MEMBER

    Aug 2, 2016
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    Saudi Arabia
    Saudi Arabia
    G20 leaders to pump in $5 trln into global economy in fight against coronavirus
    Britain's Prime Minister Boris Johnson sits in the study of 10 Downing Street, on a video conference call to other G20 leaders during the coronavirus outbreak in London, Britain, on March 26, 2020. (Reuters)

    Reuters, Riyadh/Washington
    Friday 27 March 2020

    Leaders of the Group of 20 major economies pledged on Thursday to inject over $5 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 2008-2009 financial crisis, the leaders said they committed during a videoconference summit to implement and fund all necessary health measures needed to stop the virus’ spread.

    “The G20 is committed to do whatever it takes to overcome the pandemic,” along with the World Health Organization and other international institutions, they said.

    Their statement contained the most conciliatory G20 languageon trade in years, pledging to ensure the flow of vital medical
    supplies and other goods across borders and to resolve supplychain disruptions.

    But it stopped well short of calling for an end to export bans that many countries have enacted on medical supplies, with 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 video summit amid earlier criticism of the group’s slow response to the disease. It has infected more than 500,000 people worldwide, killed almost 24,000, and is expected to trigger a global recession.

    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 economic fallout from the pandemic.

    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.”

    He told a White House news briefing on the coronavirus that the G20 countries were keeping each other informed about their efforts to fight the crisis.

    “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 on Thursday on the importance of cooperation through the G20 andother groupings to help international organizations “eliminate the pandemic quickly and minimize its economic impact,” the White House said.

    Pledge of joint action

    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 on Friday to consider doubling the current $50 billion in emergency financing available to help developing countries deal with the virus, a source familiar with the plans told Reuters.

    To boost global liquidity, Georgieva also asked G20 leaders to back a Fund plan to allow member countries to temporarily draw on part of its $1 trillion in overall resources to boost liquidity. The IMF made a similar move in 2009 with a $250 billion allocation of Special Drawing Rights, its internal unit
    of currency.

    Georgieva gave no specific number in her statement, but observers to the G20 meeting said an SDR allocation of up to $500 billion could be needed.

    On the health response, the G20 leaders committed to close the financing gap in the WHO’s response plan and strengthen its mandate as well as expand manufacturing capacity of medical supplies, strengthen capacities to respond to infectious diseases, and share clinical data.

    WHO Director-General Tedros Adhanom Ghebreyesus addressed the G20 to seek support for ramping up funding and production of personal protection equipment for health workers amid a global shortage.

    G20 will do whatever it takes to overcome coronavirus pandemic: Statement
    Saudi Arabia leads G20 efforts to unite the world in coronavirus response
    Saudi Arabia’s King Salman: G20 summit to unite global coronavirus fight


    Great news.

    United G20 agrees on measures to combat coronavirus pandemic

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    March 27, 20200

    • Group of 20 leaders pledge to minimize disruption to trade and global supply chains and coordinate public health and financial measures
    DUBAI: Leaders of the biggest countries on Thursday took part in an extraordinary “virtual summit,” under the auspices of the Saudi Arabia G20 presidency, to combat the threat to lives and livelihood from the coronavirus disease COVID-19 — and issued a call for global action in the face of an unprecedented crisis.

    “We are strongly committed to presenting a united front against this common threat,” they said after two hours of digital debate organized by the Saudi G20 team in Riyadh.

    “We will protect human life, restore global economic stability and lay out solid foundations for strong, sustainable, balanced and inclusive growth,” the leaders added in their joint statement.

    The traditional communique from the national leaders and other international leaders — which is expected after G20 summits but often delayed as a result of last-minute quibbles about wording and content — was published only minutes after King Salman closed the meeting.

    In the face of the global pandemic, there seemed to be little disagreement that urgent and concerted action was necessary.

    “The G20 is committed to do whatever it takes to overcome the pandemic, along with the World Health Organization, International Monetary Fund, World Bank Group, United Nations and other international organizations, working within their existing mandates. We are determined to spare no effort, both individually and collectively,” the leaders said.

    The communique listed the G20’s priorities: To protect lives, safeguard jobs and incomes, restore confidence, preserve financial stability, revive growth and recover stronger.

    It also pledged to minimize disruption to trade and global supply chains, provide help to poorer countries, and coordinate public health and financial measures.

    The meeting — the first “virtual” summit in the G20’s 21-year history — was staged ahead of the planned full gathering in Riyadh in November, and conducted digitally because of the restrictions on air travel.

    It had a two-fold agenda: To discuss ways to tackle the life-threatening COVID-19 disease, and how to mitigate the economic and financial repercussions of the outbreak.

    Because of the volatility in global energy markets, caused by falling demand and a surge in supply following the collapse of the OPEC+ output-curb agreement two weeks ago, some oil-industry observers had expected the meeting to address energy issues, too. However, this was never part of the G20 agenda, and the words “oil” and “energy” did not appear in the final 1,500-word communique.

    On the need to fight the global pandemic, the G20 agreed “to take all necessary health measures and seek to ensure adequate financing to contain the pandemic and protect people, especially the most vulnerable.”

    AS IT HAPPENED: Read our live story of the first every virtual G20 summit.

    The leaders said they would share medical information and strengthen global health systems, as well as cooperating on the search for, and production of, treatments for the virus.

    “We will expand manufacturing capacity to meet the increasing needs for medical supplies and ensure these are made widely available, at an affordable price, on an equitable basis, where they are most needed and as quickly as possible,” they said in the communique.

    The leaders also made a commitment to provide resources to a range of international health organizations on a voluntary basis, and asked other countries, organizations and philanthropies to do the same.

    Further measures to develop anti-pandemic skills and resources that can be used to tackle infectious diseases will be discussed by the WHO and G20 finance and health ministers at the next meeting “with a view to establish a global initiative on pandemic preparedness and response.”

    “This initiative will capitalize on existing programs to align priorities in global preparedness and act as a universal, efficient, sustained-funding and coordination platform to accelerate the development and delivery of vaccines, diagnostics and treatments,” the G20 added.

    As an organization with its origins in meetings of economic and financial policymakers, the G20 paid special attention to the effects the pandemic is having on economic growth and stock markets, which have suffered big reversals in the past two weeks.

    “We will use all available policy tools to minimize the economic and social damage from the pandemic, restore global growth, maintain market stability and strengthen resilience,” the leaders stated in their communique.

    “We are injecting over $5 trillion into the global economy, as part of targeted fiscal policy, economic measures, and guarantee schemes to counteract the social, economic and financial impacts of the pandemic.

    “We will continue to conduct bold and large-scale fiscal support. Collective G20 action will amplify its impact, ensure coherence and harness synergies. The magnitude and scope of this response will get the global economy back on its feet and set a strong basis for the protection of jobs and the recovery of growth,” they added.

    G20 finance ministers and central bankers — who have met four times since fears about the economic effects of the virus outbreak began to affect the global economy — will continue to meet regularly, under Saudi auspices, to “develop a G20 action plan in response to COVID-19 and work closely with international organizations to swiftly deliver the appropriate international financial assistance.”

    Governments around the world — with the exception of the second-biggest economy, China — have pumped hundreds of billions of dollars into support mechanisms for financial and credit markets. The communique was unanimous, leading some observers to suggest that China is planning a big intervention in financial markets.

    “We support the extraordinary measures taken by central banks consistent with their mandates. Central banks have acted to support the flow of credit to households and businesses, promote financial stability and enhance liquidity in global markets,” the leaders said.

    In addition, the communique included a commitment that they will consider the effects of the pandemic on heavily indebted developing countries.

    The G20 also displayed a united front on global trade and international cooperation, two issues that have proved divisive recently as the US has confronted several nations over trade and multinational alliances.

    “We commit to continue working together to facilitate international trade and coordinate responses in ways that avoid unnecessary interference with international traffic and trade.”

    Emergency measures aimed at protecting health will be targeted, proportionate, transparent and temporary. We task our trade ministers to assess the impact of the pandemic on trade,” the leaders agreed.

    “We reiterate our goal to realize a free, fair, nondiscriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open,” they added, pledging to coordinate responses to the virus threat “to avoid unnecessary interference with international traffic and trade.”

    The G20 also highlighted the risks to the poorer African countries with less-developed health systems during the current emergency.

    “We consider that consolidating Africa’s health defense is a key for the resilience of global health,” the leaders said.

    They also praised the decision of the international sporting authorities to delay the Olympic Games that were due to be staged this summer in Japan — a G20 member — and pledged that the event will go ahead no later than summer 2021 “as a symbol of human resilience.”




    Your Majesties, Your Excellencies, Your Highnesses,
    Ladies and Gentlemen,
    In the beginning I’d like to welcome all of you to this extraordinary summit, thanking you all for your participation.

    We are holding this meeting to carry out our responsibilities as the leaders of the world’s largest economies, in order to combat the COVID-19 pandemic, which requires that we take firm measures on various fronts. This pandemic has greatly taken toll on human lives and caused tremendous suffering to many people around the world. And here, I would like to extend our deepest condolences to all countries around the world and to their respective citizens over the lives lost to this pandemic, wishing speedy recovery for all those who are infected.
    The impact of this pandemic has spread to reach the global economy, financial markets, trade, and global supply chains, hampering growth and development and reversing the gains accomplished in the previous years.

    This human crisis requires a global response. The world counts on us to come together and cooperate in order to face this challenge.
    On the health front, the Saudi G20 Presidency took the lead and worked with partners and relevant organizations to take all necessary actions in order to contain the spread of COVID-19 and safeguard people’s health. And, here, we value the effective measures adopted by different countries in this regard. We reaffirm our full support for the World Health Organization in coordinating the efforts to counter this pandemic. To complement these efforts, the G20 must assume the responsibility of reinforcing cooperation in financing research and development for therapeutics and a vaccine for COVID-19 and ensure the availability of the vital medical supplies and equipment. We must also strengthen the global preparedness to counter infectious diseases that may spread in the future.

    On the economic front, amid the slowdown in global growth and the turmoil in financial markets, the G20 has a pivotal role in countering the economic and social impact of this pandemic. Therefore, we must have an effective and coordinated response to this pandemic and restore confidence in the global economy. The Presidency welcomes the policies and measures taken by countries to revive their respective economies, including stimulus packages, precautionary measures, sector targeted policies, and job protection measures. But despite the importance of any country’s individual responses, it is our duty to strengthen cooperation and coordination in all aspects of the adopted economic policies.

    On the trade front, the G20 must send a strong signal to restore confidence in the global economy by resuming, as soon as possible, the normal flow of goods and services, especially vital medical supplies.
    In addition, it is our responsibility to extend a helping hand to developing countries and least developed countries to enable them to build their capacities and improve their infrastructure to overcome this crisis and its repercussions.
    The G20 has previously proven its effectiveness in mitigating the severity of the global financial crisis and its ability to overcome it. Today, through our cooperation, we are confident that we, together, will overcome this crisis, and move forward towards a future where all people thrive, prosper and are healthy.

    Thank you very much.

    May peace, mercy, and blessings of god be upon you.


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  2. ArabianEmpires&Caliphates

    ArabianEmpires&Caliphates SENIOR MEMBER

    Aug 2, 2016
    +4 / 3,111 / -0
    Saudi Arabia
    Saudi Arabia
    This below is a good read as well. The Director of the Islamic Development Bank and his take on the coronavirus crisis.

    Coronavirus offers chance for us to do development differently


    March 25, 2020

    The coronavirus disease (COVID-19) is a major global crisis that exposes the lack of resilience in an increasingly highly connected world — and it is certainly not going to be the last. Could it be an opportunity to rethink development and what governments are for, rather than simply fixing market failures when they arise? Could it be an opportunity to shift toward actively shaping and creating markets that deliver sustainable and inclusive growth?

    The scale of the COVID-19 outbreak demonstrates that we are not prepared for large-scale pandemics. So, where are we today? On average, there are more than 1,000 new cases of COVID-19 every day, with rapid exponential growth. The crisis has already shattered capital markets and the picture for economic growth in 2020 looks bleak. COVID-19 has disrupted global supply chains and created poor trading conditions. Small and medium-sized enterprises (SMEs) are the hardest hit in certain Islamic Development Bank (IsDB) member countries and their situation will deteriorate further. As a result, the world is set to lose 25 million jobs, according to one study.

    So far, 45 out of 57 IsDB member countries have been affected by COVID-19, with the total confirmed cases reaching 27,579 people, 1,691 of whom have died, as of Sunday. We have already received requests for financial support from more than 20 member countries.

    The IsDB’s immediate response and call for joint action in order to support the affected member countries at different stages of the recovery trajectory has resulted in a comprehensive integrated response package worth up to $2 billion. We call this package “The 3 Rs” (respond, restore and restart).

    The respond track delivers immediate action through south-south and north-south reverse linkage operations focused on: Strengthening health systems to provide care to the infected; building capacity in production of testing kits and vaccines; and building pandemic preparedness capacity in cooperation with the G20.

    Restore delivers medium-term action through lines of financing for trade and SMEs to sustain activity in core strategic value chains, and to ensure the continuity of necessary supplies, mainly to the health and food sectors, and for other essential commodities.

    The restart track delivers long-term action to build resilient economies on solid foundations and catalyze private investment by supporting economic recovery and countercyclical spending with a target of $10 billion. This aims to unlock $1 trillion-worth of investments.

    We will deliver this package through a unified country platform, in line with G20 principles. This will ensure coherence and coordination among key stakeholders. To that effect, the IsDB will launch a joint global platform in May to track delivery within all countries and to mobilize resources. It will be available to partner multilateral development banks (MDBs). The IsDB will partner with many implementing agencies through the country platforms, including but not limited to: The World Health Organization and other UN agencies, philanthropic and international nongovernmental organizations, the Organization of Islamic Cooperation and other regional agencies, as well as private contractors and suppliers. As the current chair of the heads of MDBs meetings in 2020, I am honored to highlight the ongoing joint COVID-19 response initiative led by the International Monetary Fund and World Bank, with an anticipated package of $120 billion.

    The COVID-19 storm will pass, but the choices we make today will change our lives for decades.

    Dr. Bandar Hajjar

    I believe this is an opportunity to shift toward actively shaping and creating markets that deliver sustainable and inclusive growth, rather than to continue limiting our role to the government and international community levels and reacting to market failures. We can proactively invest in creating and strengthening institutions that prevent crises. We can coordinate research and development activities, steering them toward public good. We can forge public-private-philanthropic partnerships to ensure both citizens and economies are going to benefit.

    We can learn from the lessons of the 2008 crisis by resisting simply handing out unconditional bailouts, rather than structuring them to restarting a new economy — one that is focused on a 4.0 framework of growth. That means building capacity around the fourth generation of industrialization that uses technology to prevent global value chain disruption due to pandemics, while maintaining zero environmental footprint.

    The COVID-19 storm will pass, but the choices we make today will change our lives for decades. We call on world leaders to support all efforts in this direction and re-evaluate what threats deserve more of our individual and collective action. Let us not waste this opportunity to reflect and do development differently.

    • Dr. Bandar Hajjar is president of the Jeddah-based Islamic Development Bank Group.
    Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point-of-view

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