G20 eyes recovery through cooperation

President Xi Jinping’s address, via video, to the ongoing G20 summit in Riyadh, Saudi Arabia, will help accelerate global efforts to resume normal economic and social activities in order to boost global economic recovery.

From the meetings of finance ministers and central bank governors to the summit of heads of state or government, the G20 analyzes and reviews global economic problems with the aim of promoting international financial stability and addressing issues that go beyond the responsibilities of any organization or country. The group became one of the important platforms of global economic governance after the inaugural G20 summit in 2009, which played a key role in tackling the global financial crisis.

The two-day Riyadh summit, which started on November 21, 2020, is expected to discuss the systemic governance crisis in many countries which has come to the fore after the novel coronavirus pandemic broke out.

Debt is a vital issue, and the global economic recession has worsened the debt problem of many countries. For example, Zambia became Africa’s first sovereign defaulter during the pandemic, failing to pay national debts of more than $40 million even after a 30-day grace period earlier in November.

Thanks to their relatively good economic condition, the G20 member economies have provided loans for less-developed countries, which the latter use to sustain or boost their economic development. After the pandemic broke out, the G20, in a laudatory move in April, announced the debt service suspension initiative. But with the pandemic still raging in many parts of the world, just the suspension of debt repayments is not enough to help stabilize the economy of low-income countries. And although last month the G20 extended the suspension of loan repayment for another six months, it will still not ease those countries’ burdens.

That’s why the G20 summit is likely to discuss how to establish a debt relief mechanism, and for the first time China, India, Turkey and some other emerging economies will be involved in the multilateral debt restructuring process. True, giving less-developed countries further debt relief would be stressful for many creditor countries, but to maintain global economic stability, G20 members have to make more efforts to establish an effective framework for global debt restructuring.

For instance, the G20 can cooperate with non-G20 economies, especially members of the Paris Club, a platform for global debt restructuring, to find ways to grant debt relief to less-developed countries without putting excessive pressure on the creditors. They will also have to encourage private sector creditors to give relief to countries saddled with debts.

Besides, the G20 can strengthen coordination with the International Monetary Fund to introduce debt-relief programs through open and transparent negotiations.

As for China, this is the first time it is participating in a multilateral debt restructuring process. As the largest creditor country in the G20, China supports the debt-relief and other multilateral cooperation mechanisms because it is sincere about fulfilling its commitments to shared global governance and development.

Indeed, the G20 and global organizations, such as the World Health Organization, Coalition for Epidemic Preparedness Innovation, and GAVI, the Vaccine Alliance, have contributed funds for carrying out COVID-19 tests in many countries, as well as for research and development of COVID-19 vaccines and medicines, and their subsequent manufacturing and distribution. Yet the equitable distribution of vaccines remains uncertain.

Since the production capacity of no pharmaceutical company is infinite, the vaccines can be made only in limited volumes. As such, some rich economies have placed huge orders for the vaccines, making equitable vaccine distribution almost impossible. For instance, the United States has not joined COVAX, the COVID-19 Vaccine Global Access Facility, but instead ordered 100 million vaccine doses for $1.95 billion, with options for ordering 500 million more. And the European Union has placed an order for 200 million doses, with provisions for 100 million more.

China, on the other hand, has promised to treat any vaccines it develops as global public goods and ensure, with the help of other COVAX members, equitable supply of those vaccines to developing countries. But since the vaccine race has heated up, China should persuade like-minded countries to intensify their efforts to ensure the equitable supply of vaccines as much as possible.

Moreover, since the pandemic-induced economic recession has boosted the cooperation spirit around the world, the G20 summit is likely to chart new ways to expedite global economic recovery by, for example, promoting international trade and investment——and better coordination and cooperation is still the best way the world can overcome the economic and other impacts of the pandemic.

The author is an associate researcher of the Institute of West Asia and Africa of the Chinese Academy of Social Sciences, and council member of the Chinese Society of Asian and African Studies.