COVID19: G20 pledges $5 trillion to defend global economy

Riyadh: G20 nations pledged a “united front” Thursday in the fight against coronavirus, saying they were injecting $5 trillion into the global economy to counter the pandemic amid forecasts of a deep recession.

US President Donald Trump and Russian President Vladimir Putin joined the emergency videoconference chaired by Saudi Arabia’s King Salman, who called for coordinated action while facing pressure to end an oil price war between Riyadh and Moscow that has roiled energy markets.

The talks come amid criticism that the G20 has been slow to address the COVID-19 pandemic, which has left more than 21,000 dead worldwide according to official data, and triggered financial shock waves as more than three billion people are locked down.

“We are strongly committed to presenting a united front against this common threat,” the leaders said in a joint statement after the summit.

“We are injecting over $5 trillion into the global economy, as part of targeted fiscal policy, economic measures, and guarantee schemes to counteract the social, economic and financial impacts of the pandemic.”

Support for developing nations

As concerns mount for poorer countries without access to capital markets or adequate health facilities, G20 leaders also pledged to work with bodies such as the International Monetary Fund to deploy a “robust” financial package to support developing nations.

“It is our responsibility to extend a helping hand to developing countries and [the] least developed countries to enable them to build their capacities and improve their infrastructure to overcome this crisis and its repercussions,” King Salman said.

The world’s 20 most industrialised countries are scrambling to defend their virus-wracked economies amid forecasts they will likely plunge into a recession.

On Wednesday, the financial ratings agency Moody’s estimated the G20’s overall gross domestic product would contract by 0.5 percent this year, with the US economy shrinking by 2 per cent and the Eurozone by 2.2 per cent.

US-China tensions

This week, French President Emmanuel Macron and his Chinese counterpart Xi Jinping pushed for an emergency G20 summit to limit the impact of the pandemic.

The lack of immediate action stood in contrast to the 2008 financial crisis, when the group quickly swung into action to mobilise assistance for vulnerable countries.

On Wednesday, US Secretary of State Mike Pompeo took aim at China, saying the top diplomats of the Group of Seven agreed with him that Beijing was waging a “disinformation” campaign about the pandemic.

At the G7 talks, a day before the G20 summit, Pompeo alleged Beijing was engaged in a social media campaign that included conspiracy theories that the US was behind the virus, which was first detected in the Chinese metropolis of Wuhan.

“If G20 leaders can put politics aside and reach a collective G20 agreement, countries have a better chance of success or of delivering more stimulus than on their own,” Markus Engels, from the Global Solutions Initiative, a network of think tanks, told AFP.

“Coordination among the G20 sends a strong message of unity and confidence, both of which are urgently needed now.” (AFP)

(Except for the headline, this story has not been edited by The Kashmir Monitor staff and is published from a syndicated feed.)