Some G20 nations are reluctant to extend another year of debt service relief to world’s poorest, World Bank chief said.
G20 member states are set to debate how to deal with the coronavirus pandemic that has caused a global recession and how to manage the recovery once COVID-19 is under control.
High on the agenda are purchases and global distribution of vaccines, drugs and tests for low-income countries that cannot afford such expenses themselves. The European Union will urge the G20 on Saturday to invest $4.5bn to help.
“The main theme will be to step up global cooperation to address the pandemic,” said a senior G20 official taking part in the preparations for the two-day summit, hosted by Saudi Arabia and held virtually because of the pandemic.
To prepare for the future, the EU will propose a treaty on pandemics.
“An international treaty would help us respond more quickly and in a more coordinated manner,” the EU’s Charles Michel is expected to tell G20 leaders on Sunday.
Meanwhile, Saudi Finance Minister Mohammed al-Jadaan said the summit “will seek to strengthen international cooperation to support the global economic recovery”.
“The G20 committed in March to do whatever it takes to overcome the pandemic and protect lives and livelihoods,” UK Prime Minister Boris Johnson said in a statement.
“As we meet this weekend we must hold ourselves to account for that promise.”
However, G20 leaders face mounting pressure to help stave off possible credit defaults across developing nations.
While the global economy is recovering from the depths of the crisis earlier this year, momentum is slowing in countries with resurging infection rates, the recovery is uneven and the pandemic is likely to leave deep scars, the International Monetary Fund said in a report for the G20 summit.
Especially vulnerable are poor and highly indebted countries in the developing world, which are “on the precipice of financial ruin and escalating poverty, hunger and untold suffering”, United Nations Secretary-General Antonio Guterres said on Friday.
To address this, the G20 will endorse a plan to extend a debt servicing moratorium for developing countries by six months to mid-2021, with a possibility of a further extension, said a draft G20 communique seen by the Reuters news agency.
“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 communique read.
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.
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.
World leaders – from German Chancellor Angela Merkel to Chinese President Xi Jinping and Russian leader Vladimir Putin – are expected to make speeches.
US President Donald Trump, who refuses to concede a bitter election loss to Joe Biden, will also participate, a US official said.
Saudi Arabia’s King Salman will preside over the summit, with sources close to the organisers saying climate change was also among the issues topping the agenda.
The change of US leadership also raises hopes of a more concerted effort at G20 level to fight global warming.
Following the example of the EU, already half of the G20 members, including Japan, China, South Korea and South Africa, plan to become carbon-neutral by 2050 or soon after.
Under Trump, the US pulled out of the Paris Agreement on fighting climate change, but the decision is likely to be reversed by President-elect Biden.
“We expect, of course, new momentum from the new US administration on this issue, thanks to the President-elect’s declaration that the US would join the Paris Agreement once again,” European Commission President Ursula von der Leyen said.
Economists have said Biden is likely to take a more cooperative global stance after he takes office on January 20.
To help finance the fight again climate change the EU will push for the G20 to agree on common global standards on what constitutes “green” investment.
European nations in the G20 will also seek fresh impetus to the stalled reform of the World Trade Organisation (WTO), hoping to capitalise on the upcoming change of US administration. Trump favoured bilateral trade deals over working through international bodies.
This would help attract the massive private investment needed because many investment funds are eager to invest in environmentally sustainable projects, but there is no agreed way of selecting them. The EU is already working on such standards with the aim to have them in place by 2022.
Meanwhile, Saudi Arabia, the first Arab country to chair the summit, has come under fire for its human rights record.
Campaigners and families of jailed activists have launched vigorous drives to highlight the kingdom’s human rights abuses.
Key among them are the siblings of jailed activist Loujain al-Hathloul, on a hunger strike for more than 20 days demanding regular family contact.
On Thursday, Amnesty International urged G20 leaders to call on the kingdom to release all of its imprisoned activists. The UK-based group said activists who led campaigns for women’s rights in the Gulf country continue to be imprisoned or are facing trial, despite the fact that women’s empowerment is on Saudi Arabia’s G20 agenda.
But some Western officials have indicated human rights would not be raised at the summit, saying they prefer to use bilateral forums to discuss the issue with the Saudi government.
“The G20 presidency has conferred an undeserved mark of international prestige on the [Saudi] government,” said Michael Page, deputy Middle East director at Human Rights Watch.
“Instead of signalling its concern for Saudi Arabia’s serious abuses, the G20 is bolstering the Saudi government’s well-funded publicity efforts to portray the country as ‘reforming’ despite a significant increase in repression.”