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)

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.

ALSO READ:

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

SHOW MORE
Last Update: 02:46 KSA 05:46 - GMT 02:46
Top