A lesson in leadership
The G20 comprises the world’s most powerful economies — 19 countries and the European Union. It was founded in 1999, when it became obvious that the leading industrial nations of the G8 needed to be supplemented by the growing emerging economies, particularly by rising Asia.
G20 territories account for 90 percent of the world’s GDP and 66 percent of its population. The group has only three majority Muslim members — Indonesia, Turkey, and Saudi Arabia. The Kingdom is the only Arab member, and has assumed the group’s rotating presidency this year for the first time.
The G20 was the vital framework coordinating a global response to the 2008-09 financial crisis. The new global crisis is the coronavirus and the disease it causes, COVID-19.
As former US Federal Reserve chief Ben Bernanke has pointed out, a natural disaster such as an earthquake is limited in terms of geography and time frame, which allows other parts of the world to come to the rescue. COVID-19, however, affects the whole world simultaneously, with no predictable timeframe. In other words, this is a global crisis necessitating global solutions. The G20 is one of the most global economic frameworks, and therefore ideally placed to co-ordinate efforts to address economic hardship inflicted by the pandemic.
Last week it proved its leadership, with a heads of government summit via video conference, hosted by King Salman of Saudi Arabia. He wasted no time driving home to global leaders that the world is seeking leadership, help and compassion from the G20: “This human crisis requires a global response. The world counts on us to come together and cooperate in order to face this challenge. Despite the importance of any country’s individual responses, it is our duty to strengthen cooperation and coordination in all aspects of the adopted economic policies.”
“Whatever it takes” was pretty much the mantra when it came to the G20 response to the pandemic. While the communique may be weak on specifics, there was clear solidarity and a sense of purpose among the leaders of the world’s most powerful economies.
It was the group’s “responsibility to extend a helping hand to developing countries and least developed countries to enable them to build their capacities and improve their infrastructure to overcome this crisis and its repercussions.” These were important and inspiring words.
“Whatever it takes” was pretty much the mantra when it came to the G20 response to the pandemic. While the communique may be weak on specifics, there was clear solidarity and a sense of purpose among the leaders of the world’s most powerful economies. It cannot be stressed enough how important that show of solidarity was to so many who are both physically and economically affected by the pandemic. The specifics can always be worked out later with the help of the IMF, the World Bank, the OECD and other organizations.
Compare that with the EU, which could not find a common approach to the crisis, leading an exasperated European Commission president Ursula von der Leyen to exclaim: “When Europe really needed an all-for-one spirit, too many initially gave an only-for-me response.”
The COVID-19 pandemic is a global crisis of epic proportions. It has been likened to the Spanish flu outbreak in 1918. That may be so. However, the world was a lot less interconnected then, which means that both the ramifications of the pandemic spread more rapidly throughout the globe and that the solutions need to be global as well.
This is truly the moment of leadership for the G20 and for Saudi Arabia, which holds its presidency.
• Cornelia Meyer is a business consultant, macro-economist and energy expert. Twitter: @MeyerResources