G20 can play vital role in combating effects of coronavirus

G20 can play vital role in combating effects of coronavirus

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The G20 has never been as relevant as it is today, with a pandemic and economic recession wreaking havoc globally. The need for international coordination has never been greater and the G20 is the right format for such cooperation, as the group comprises the planet’s 20 largest economies, which collectively account for about 90 percent of the world’s gross domestic product, 80 percent of trade, two-thirds of its population, and half of its land area. They have the coverage, the financial means and the necessary tools to mitigate the impact of these twin crises.

Last week, China called for multilateral efforts to coordinate the global response, including through the G20. One official said: “The G20 is the main platform for international macroeconomic policy coordination. After the financial crisis in 2008, the G20 played a historic role in coordinating and promoting the world economic recovery.” He said that China would proactively take part in international coordination and was ready to give “constructive ideas” on how countries should work together to manage the economic costs of the pandemic.

But the G20 can play a greater role, beyond macroeconomic coordination.

Saudi Arabia assumed the G20 presidency last December and will continue to hold it until November, making it the focal point of international economic coordination. King Salman said that Saudi Arabia would seek, during its presidency, to “create a cooperative environment for the G20 to introduce policies and initiatives that will fulfill the hopes of the people of the world.” The Kingdom this month called for a leaders’ summit by video conference to discuss the coronavirus crisis.

During the 2008-09 global financial crisis, the G20’s role — as well as its stature — grew considerably. From 1999, when the group was set up, until 2008, the G20 was the purview of finance ministers and its discussions focused on the promotion of international financial stability. The G7, and sometimes G8, summits were the places where heads of state met and coordinated policies on wider economic and political issues. In November 2008, US President George W. Bush changed that when he convened the first G20 summit of heads of state in Washington to coordinate responses to the financial crisis. The coordinated adoption of financial stimulus packages was one outcome of those deliberations.

Since then, the G20 has held about a dozen summits and scores of ministerial meetings, in addition to expert gatherings and other activities. It has frequently dealt with issues outside economic policy. For example, the 2019 G20 summit held in Osaka, Japan, discussed eight themes: The global economy, trade and investment, innovation, environment and energy, employment, women’s empowerment, development, and health.

This year, a main area of focus should be mitigating the disruptive impact of the coronavirus on global supply chains, including its effects on health, security and aid to vulnerable communities. The disease has led to limited access for employees due to quarantines and curfews, factory closures or manufacturing slowdowns, limited access to logistics to move goods, and skyrocketing costs that are making it difficult for limited-income families to cope, especially when combined with layoffs or forced leaves.

A main area of focus should be mitigating the disruptive impact of the coronavirus on global supply chains

Abdel Aziz Aluwaisheg

Resilinc, a supply chain mapping and risk-monitoring company, has issued preliminary reports on the number of items sourced from and the sites of industries located in the quarantined areas severely affected by the pandemic in various countries. The information shows that manufacturers in more than a dozen industries are facing a supply crisis and are struggling to mitigate the impact on their supply chains. Just like the Fukushima nuclear crisis of 2011, the current crisis has exposed weaknesses in supply chains, such as relying on a single source or a limited number of sources for key inputs.

Especially critical are health supply chains. Medical equipment and supplies needed to fight the disease are in short supply and the production lines to make them need to be expanded quickly. Distribution is an even greater problem amid rising costs and limited transportation channels. Countries with fragile health systems are finding it more difficult to monitor and fight the disease. If left to their own devices, disease could spread uncontrollably and, in the end, spread to other countries.

More alarming for international humanitarian agencies is the fate of refugee communities when the disease reaches them. According to the Norwegian Refugee Council, more than 70 million people globally have been forced to flee their homes by persecution, conflict, violence and human rights violations. Of those, more than 29 million are refugees, of whom 84 percent are being hosted by low or middle-income nations that have weak health, water and sanitation systems. It is critical that these communities are provided with the means to protect themselves against the ravages of the disease.

The impacts of coronavirus can be felt in the security area too, with serious concerns about weak supply chains, difficulties in organizing meetings, production slowdowns, and logistical disruptions. More importantly, the disease is making it difficult to move forces and materiel to maintain security in some regions. It is especially worrying that Iran and its allies are taking advantage of these disruptions to expand their influence in Iraq, Yemen, Syria and Lebanon.

The G20 is well placed to deal with all these issues. Countries should put aside their differences as they address the coronavirus crisis. For example, tensions between the US and China, the two largest G20 economies, should not delay coordination and agreement on concrete actions to deal with the pandemic’s repercussions. China and the US are each other’s top trading partners and the economic health of each country depends on the other’s — and now the physical health of their populations depends on their cooperation. There are real issues and conflicting interests that divide them, which may very well outlast the current pandemic, but it should be possible to agree on at least two issues: Isolate the immediate coronavirus-related supply disruptions that affect health and security, and avert a total economic meltdown, which could prove to be irreversible in the near future.

• Abdel Aziz Aluwaisheg is the Gulf Cooperation Council’s assistant secretary-general for political affairs and negotiation, and a columnist for Arab News. The views expressed in this piece are personal and do not necessarily represent those of the GCC. Twitter: @abuhamad1

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