BRUSSELS/WASHINGTON: G20 nations are determined to continue doing everything possible to contain the COVID-19 pandemic, warning in a draft communique that the global economic recovery remains “uneven, highly uncertain, and subject to elevated downside risks”.
Bringing the pandemic under control is the key to supporting a global economic recovery, the G20 leaders said in the draft, excerpts of which were seen by Reuters.
A final joint statement will be released by leaders from the United States, China and other Group of 20 nations after they meet by video conference on Saturday.
In the draft, the leaders noted the coronavirus crisis had hit the most vulnerable in society hardest, and said some countries may need debt relief beyond a temporary moratorium on official debt payments now slated to end in June 2021.
G20 leaders said they would decide next spring whether to extend the freeze, the Debt Service Suspension Initiative, for another six months, and endorsed a common framework for debt restructuring hammered out with the Paris Club of official creditors.
“We are determined to continue to use all available policy tools as long as required to safeguard people’s lives, jobs and incomes, support the global economic recovery and enhance the resilence of the financial system, while safeguarding against downside risks,” the statement said.
TRANSPARENCY
The draft said both borrowers and creditors should be more transparent about official and private debt, and urged private sector creditors to take part in the G20 debt relief effort.
World Bank President David Malpass told G20 finance officials on Friday some countries may need legislative changes to push private sector creditors to get involved. “Given the severity of the crisis, we must move forward now with debt relief processes,” he said.
The draft communique also expressed support for a push by the International Monetary Fund to explore additional tools to address countries’ needs as the crisis evolved, and to address the “particular challenges faced by small developing states”.
That could be good news for certain middle-income countries that have been hit hard by the pandemic, a collapse in tourism, and in some cases, lower commodity prices.
The U.S. Treasury Department last week said it was open to extending the G20 common framework to include middle-income countries and small island states, but that view was not shared by all G20 members.
Eric LeCompte, executive director of Jubilee USA Network, said the G20 had made great strides toward addressing the staggering debt burden of many countries. “It shows the growing understanding of how serious the crisis is, and how much more serious it can get,” he said.
U.S. President-elect Joe Biden, a Democrat, is likely to take a more cooperative global stance after he takes office on Jan. 20, economists say. He is expected to take the United States back into the Paris climate treaty and reverse threats by outgoing President Donald Trump to quit the World Health Organization.
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