G20 Finance Ministers’ Meeting Fails to Rise to the Challenge

photo: G20 KSA

The statement of the meeting of G20 Finance Ministers and Central Bank Governors on 18 July falls well below what the world needs to combat the devastating health and economic impacts of the COVID-19 pandemic.

“G20 finance ministers have unfortunately not yet risen to the challenge of this worldwide pandemic. While trillions of dollars have been mobilised for national economic and health measures, the urgently needed resolve to tackle the pandemic’s global scale is missing. There is little focus on jobs and social protection, and while there are encouraging words about digital infrastructure, finance ministers seem to be treading water on vital issues such as debt relief, creation of a social protection fund for the poorest countries, investment in health and care, and universal access to treatment and eventual vaccines. There are no new commitments to adequately resource the International Financial Institutions, nor to reforming them to align with the Sustainable Development Goals,” said Sharan Burrow, ITUC General Secretary.

“Before the G20 meeting, labour and business united in a call for sweeping debt action, including cancellation of debt owed to multilateral development banks and participation of private creditors in repayment standstills. Debt relief including cancellation along with expansion of new lending and grants by the World Bank and other development banks requires new money from G20 countries. Private creditors should be compelled to participate in a debt standstill. They should no longer be able to hide behind legal jurisdictions in places such as London and New York, and instead a binding process should be created to resolve sovereign defaults and renegotiate unsustainable debt.

“The statement does foresee a possible extension of debt standstill later this year, but the time to make this commitment is now, so that countries can plan with certainty. It should be noted that less than half of the $11.5bn in bilateral debt relief from G20 countries to the poorest countries has actually been realised to date. The only conditionality attached to debt relief and cancellation should be national investment aligned with the SDGs most relevant for recovery and resilience. The G20 Action Plan does not lay out a clear strategy to foster investment in a job-rich recovery and sustainable infrastructure, and the meeting of Finance Ministers again concluded without an agreement on issuing new IMF Special Drawing Rights. This action would provide developing countries with essential resources to protect against economic and employment collapse.

“One welcome initiative is that progress on G20 finance commitments made earlier this year is being tracked, however while this provides a useful accountability framework, the necessary ambition is still lacking.

“While work underway on harmonizing global tax rules is mentioned in the Statement, there is no sign of any new impetus to end the fiscal damage wrought by tax avoidance and evasion or new measures to reign in the monopoly power of the global technology companies and ensure the sharing of gains through a digital tax.

“The sheer extent of this pandemic requires ambitious and concerted action, but we have yet to see this from G20 finance ministers. The consequences for health, jobs, incomes and climate action of continued inaction would be catastrophic,” said Burrow.