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G20 commits $5 trn spending; aims to boost world economy in coronavirus

Finance ministers to prepare action plan soon, Trade ministers to assess impact on global trade

Subhayan Chakraborty  |  New Delhi 

Prime Minister Narendra Modi interacts with fellow world leaders during the virtual G20 Summit, in New Delhi on Thursday. Photo: PTI
Prime Minister Narendra Modi interacts with fellow world leaders during the virtual G20 Summit, in New Delhi on Thursday. Photo: PTI

The Group of 20, or G20, leaders on Thursday pledged to inject $5 trillion into the global to blunt the economic impact of the pandemic.

The infusion — pushed through a targeted fiscal policy, economic measures, and guarantee schemes — will counteract the social, economic and financial impacts of the pandemic, according to a statement released after the G20 Leaders’ Summit.

“We ask our finance ministers and central bank governors to coordinate on a regular basis to develop a G20 action plan in response to COVID-19 and work closely with organisations to swiftly deliver the appropriate financial assistance,” the statement said.

Held through videoconferencing, the Saudi Arabia-hosted summit also committed to expanding the manufacturing capacity to meet the increasing demand for medical supplies and ensuring these are made widely available, at an affordable price, on an equitable basis, where they are most needed and as quickly as possible.

Coordinated effort

Health ministers have also been mandated to meet, as needed, to share national best practices and develop a set of G20 urgent actions on jointly combating the pandemic, in their ministerial meeting in April.

The nations resolved to share timely and transparent information, exchange epidemiological and clinical data, share materials necessary for research and development, and strengthen health systems globally.

The summit also decided to provide immediate resources to the World Health Organization’s (WHO’s) COVID-19 solidarity response fund, the coalition for epidemic preparedness and innovation (CEPI) and Gavi, the Vaccine Alliance, on a voluntary basis.

The leaders also asked the WHO to submit a report to assess gaps in pandemic preparedness and report to a joint meeting of finance and health ministers in the coming months. The move will establish a global initiative on pandemic preparedness and response.

Talking trade

Trade ministers of the bloc are expected to meet soon to assess the impact of the pandemic on global trade. In a show of rare solidarity following years of bitter differences on trade matters, the G20 leaders have now committed to come together to “coordinate trade responses in ways that avoid unnecessary interference with traffic and trade”.

The summit also saw the decision to implement emergency measures aimed at protecting health through targeted, proportionate, transparent, and temporary interjunctions. The member nations also decided to ensure the flow of vital medical supplies, critical agricultural products, and other goods and services across borders, and vowed to work to resolve disruptions to the global supply chains.

However, rather than focusing on the bigger players, the discussion took special care to address the challenges for poorer economies.

“We are gravely concerned with the serious risks posed to all countries, particularly developing and least developed countries, and notably in Africa and small island states,” the statement said.

The G20 urged the central banks of member nations to support the flow of credit to households and businesses, promote financial stability, and enhance liquidity in global markets. It also welcomed the extension of swap lines that central banks have undertaken.

Modi for fresh crisis management system

PM Narendra Modi pitched for developing a new crisis management protocol to deal with global health crisis and urged the G20 grouping to work towards addressing shockwaves triggered by the pandemic. He also held separate telephonic conversation with Emir of Qatar Sheikh Tamim Bin Hamad al Thani and Crown Prince of Abu Dhabi Sheikh Mohammed Bin Zayed Al Nahyan. "They exchanged notes about the measures taken in their respective countries to contain the spread of the virus," said the Ministry of External Affairs. PTI

First Published: Thu, March 26 2020. 00:54 IST