JEDDAH: International cooperation and multilateral trade are key to economic recovery in the post-COVID-19 world, according to the G20’s think tank engagement group, T20.
The members of the group took part in an online seminar on Wednesday, during which they discussed the effects of the pandemic on economies around the world. During the virtual gathering, Fahad Al-Mubarak, Saudi Arabia’s G20 sherpa, highlighted the role of the group and the spirit of cooperation among its members.
“The T20 is an important and integral part of the G20 family, and we look to you to offer us independent thoughts, ideas and recommendations,” he said.
“Most of our challenges globally require our cooperative efforts. We are planning to develop several solutions, restore sustainable growth and create employment opportunities for those who lost their jobs because of this pandemic.”
Al-Mubarak noted that in the aftermath of the 2008 global financial crisis, the G20 implemented important initiatives to develop stronger global financial and banking systems.
“This strong banking system has actually helped us this time,” he said. “If the banking system had been weak, it would have been a compound disaster because of this pandemic. However, because we have stronger banks now, we are able to sustain the consequences of the pandemic with more resilience.”
The seminar included a session devoted to the T20’s Task Force 1: Trade, Investment and Growth, which was co-chaired by Shura Council member Said Al-Shaikh. It focused on four themes: trade reform, subsidies and tax, digital technologies and investment, and the fourth industrial revolution.
Al-Shaikh said that the pandemic presents an additional challenge on top of the existing challenges the global trading system was facing, which arise from protectionism, equal access to global value chains, and legal issues related to digital trade and services.
The pandemic has influenced the task force’s policy recommendations, he added.
“There is a message that WTO (World Trade Organization) reform is possible despite the challenges that undermine its existence now,” he said. “The task force believes that the pandemic has demonstrated that the multilateral trade system is needed more than ever, to minimize disruptions to (the goods and services needed) to meet upcoming health and economic challenges.”
The task force members said a revival of economic activity is possible, but added that while governments and central banks in G20 countries have been working on fiscal policy stimulus initiatives and monetary policy recommendations to support their economies, fair trade policies and measures to stimulate global economic growth must not be neglected.
The task force also emphasized the importance of keeping international markets open and stable, and of fostering more favorable business environments, especially for sustainable foreign investment, “to lessen the impact of the pandemic, particularly on primary material-based economies in developing countries.”
Martin Muhleisen, director of the International Monetary Fund’s Strategy, Policy, and Review Department, highlighted the importance of multilateralism and cooperation between governments.
“The crisis has shown the importance of multilateralism like never before,” he said. “Since the beginning, when we were all very concerned about health, markets and the future of the economy, what has always been uplifting is to sit together with colleagues from around the world in many of these multilateral meetings — whether within our institution, the IMF, or across international institutions or the G20, or in civil-society forums — and see everybody trying to figure out how to move forward on this issue, and how to solve the health crisis and prevent lasting economic damage.”
The IMF has been able to offer emergency financial assistance to countries that might otherwise experience great difficulties, Muhleisen said. So far, 102 countries have requested such aid.
“We have increased the access limits and we will probably increase them further for this type of assistance to help countries that have nowhere else to go at the moment,” he added.
Saudi Arabia holds the presidency of the G20 this year and the group’s annual summit is due to be held in Riyadh in November. The T20 if one of several independent engagement groups focusing on different sections and sectors of society, led by organizations from the host country, that develop policy recommendations for consideration by G20 leaders.