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Eye of Riyadh
Eye of Riyadh
Business & Money | Sunday 22 November, 2020 3:29 am |
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G20 summit sets out to build a future for all

This is a G20 summit like no other. It is taking place virtually because of a pandemic that endangers lives and livelihoods, and has plunged the world into the deepest recession since the Second World War.
It is also the first time that Saudi Arabia is hosting the summit. The Kingdom is the only Arab member of the G20, and one of only three majority Muslim countries alongside Indonesia and Turkey.
The G20 represents the 19 most powerful economic countries plus the EU, representing 90 percent of global gross domestic product, more than 75 percent of trade, and two-thirds of the world’s population. When faced with the global financial crisis 12 years ago, the G20 demonstrated the importance of international cooperation at that level. Then, as now, the world economy stood on the brink of a major recession, with the financial system under threat of collapse.
This time the world faces a crisis that is greater in magnitude and deeper since it also affects the health and lives of the global population. The coronavirus pandemic again raises questions of how to guarantee financial stability, economic recovery and, most importantly, access to vaccines and medical support for all.
The theme of the Saudi presidency is “Realizing Opportunities of the 21st Century for All.” It was chosen wisely, because the pandemic has highlighted and exacerbated inequalities between countries and among populations within countries. The virus knows neither boundaries nor borders.
An extraordinary summit in March played midwife to global stimulus packages equating to an injection of $11 trillion into the global economy. It also mobilized $21 billion to combat the pandemic. The G20 provided emergency support for the world’s poorest countries, including the debt service suspension initiative. A total of 73 countries were eligible and 46 have taken advantage of the assistance so far.
King Salman set the agenda for the G20 summit in his opening remarks, including fighting the pandemic, continued support for the global economy, assistance for developing countries, and laying the foundations for a robust, sustainable and inclusive growth.
The summit will discuss an extension of the debt service suspension. Private lenders also will be encouraged to take part in the initiative, which so far they have not done.
In the same vein, leaders will continue discussing stocking up the International Monetary Fund’s firepower by issuing an additional $500 billion in special drawing rights, or SDRs. During the financial crisis the IMF issued more than $270 billion in SDRs. Up to now most countries supported the issuance of SDRs, while the US failed to do so.
The Saudi presidency stands for ensuring that everyone has access to vaccines, therapeutics and diagnostics, and that medications will be distributed equitably. The Kingdom has contributed $500 million to support the ACT accelerator and COVAX search for an effective vaccine for all countries. G20 leaders have been urged to plug the $4.5 billion hole required to produce and distribute the vaccines globally. In a pandemic preparedness and response side event, world leaders joined King Salman in emphasizing that global cooperation is needed to combat the virus as well as support from and of multilateral frameworks, namely the WHO.
Why the summit matters to the world: The pandemic has ravaged lives and livelihoods around the world. The world economy has been badly hurt and can only truly recover if the fight against the virus has been won.
The virus knows no borders. Therefore, we are not safe until everybody is safe, which is why it is so important to give all countries, even the poorest, access to vaccines and antiviral drugs.
To this end the G20 cooperation and support of multilateral frameworks is crucial. This is why the ACT accelerator and COVAX are an integral part of finding solutions to the pandemic.
This is where the debt relief program, which postpones interest and principal for the poorest countries, is very important, because they need to rebuild their economies and healthcare systems.
The virus has worsened inequalities; the poorest countries and poorest segments in the population are particularly affected by the pandemic. Women have been especially hard hit by the economic fallout, which again brings us back to the Saudi presidency placing particular emphasis on women assuming their rightful positions and standing in society.
Why the day mattered to GCC and KSA: Saudi Arabia has provided enlightened leadership to the G20 in a year of unprecedented challenges. From a global perspective, Arab and Muslim nations are holding leadership positions. They are part of the family of nations, which comes with responsibilities and privileges.
The Kingdom’s commitment to multilateralism is important at a time when many multilateral arrangements are under review/threat. This holds particularly true for the WHO and the World Trade Organization (WTO), where the Riyadh initiative for the future of the WTO will positively influence the future of the organization.
The GCC and Saudi Arabia stand at the crossroads between East and West. As oil-producing countries, they depend on a thriving global economy. The economy can recover only if we get a handle on the virus. Therefore, the focus of day one on pandemic preparedness and response was the right thing to do not only from a humanitarian standpoint, but also from an economic perspective.

 

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