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21 May 2020, Gateway House

G20’s role in the COVID-era

The G20 will prove vital in maintaining economic balance in the post-COVID world. The strains are many, but like the financial crisis of 2008, this could be a defining moment for its members to exercise delicate diplomacy to combat the challenges of COVID-19.

Distinguished Fellow, Foreign Policy Studies Programme

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On 26 March 2020, at its first-ever virtual summit, G20 resolved “to do whatever it takes to overcome the pandemic” – the Coronavirus dashboard showed a global total of 935,817 confirmed cases and 47,208 deaths. Seven weeks later, as of 20 May 2020, the figures have increased dramatically to 4.89 million cases and 323,221 deaths worldwide.[1] Has G20 failed to deliver?

Undoubtedly, G20 began on a slow note.[2] Policy analysts gave the joint statement issued after the initial summit “barely passing grade.”[3] Escalating U.S.-China tensions and a striking lack of U.S. and European leadership were the key factors responsible for this. But at least the summit did take place, and it was thanks to middle players such as India, Russia and Australia that asserted themselves and coaxed G20 chair, Saudi Arabia, to convene the virtual summit.

Following that initiative all G20 member states including U.S. and China have labored and persevered in crafting a substantive ‘G20 Action Plan’ to tackle this world catastrophe. Importantly, ‘a-whole-of-the-government’ strategy involving several national ministries has been agreed upon and adopted. This has helped secure agreement on desired actions in several crucial areas.

Ministerial collaboration:  Since the summit there have been eleven virtual meetings of ministers of member states across integral departments to plan and endorse collaborative efforts in their respective areas.

a) Two meetings of trade and investment ministers led to the outlining of ‘G20 Actions to Support World Trade and Investment Response to COVID-19’, which detail both short-term and long-term collective actions.[4] The former ensure that emergency trade measures do not create disruptions to global supply chains, whereas the latter promote necessary reforms to the WTO.

b) Energy ministers have agreed that the sector will continue to make a “fully effective contribution to overcoming COVID19 and powering subsequent global recovery.” They aim to develop “collaborative policy responses” to ensure market stability across energy resources as well as to maintain the balance of interests between producers and consumers that will safeguard an uninterrupted flow of energy.[5]

c) Health ministers have crafted an agreement on the steps necessary to address systemic weaknesses in health systems, improve pandemic preparedness, utilize digital solutions and improve patient safety.

d) An interesting development was the meeting of digital economy ministers, which stressed “the promising role of digital technologies and relevant digital policies” in strengthening their individual country’s responses to the pandemic. Their plan covers aspects such as augmenting communication infrastructure and network connectivity, and R&D of digital technologies for health.[6]

e) Agriculture, labour and employment, and tourism ministers have also had discussions to develop a cooperative framework for their respective areas.

An economic support-system: Finance ministers and central bank governors occupy a special position in G20’s architecture. Their collaboration is integral to the forum’s effectiveness as an influential multilateral body. Two important meetings on economic concerns were held before and after the 26 March leadership summit. These meetings were instrumental in drawing up the ‘G20 Action Plan – Supporting the Global Economy Through the COVID19 Pandemic.”[7] The comprehensive plan covers crucial facets of health infrastructure; economy and finance; stimulating sustainable, balanced and inclusive growth; and providing international support for countries in need.

One important measure finalized as part of this plan is support for the World Bank and IMF to use their instruments “as part of a coordinated global response”, including “a time-bound suspension” of debt service payments for the poorest countries.[8] As a result of this decision the debts of nations to the World Bank and the IMF, as well as debts between individual countries will now be assessed on a case-by-case basis. Payment arrangements will be negotiated through bilateral discussions between member countries.

It is easy to be skeptical about the efficacy of the spectrum of G20’s efforts in mitigating COVID19. But no one should forget the role G20 played in successfully resolving the global financial crisis of 2008-09 when the U.S., Europe, China, India and others worked in tandem. Many of these important relationships are fractured today as a result of the pandemic, making it even more imperative for the forum to deliver results through implementation.

The inescapable fact is that G20 is the only multilateral body collaborating and attempting to tackle the crises currently. Especially since institutions such as the UN Security Council have been completely ineffective in their approach; first, by delaying any discussion on the matter and then by convening an unproductive meeting that did not yield any results.

The G20 is the leading forum for deliberation and coordination of policy on global issues. With the world’s 19 largest economies and the European Union as its members, it represents over 66% of world population, 75% of global trade and 80% of world GDP.[9] At a time of global crisis when relations between China and the world, especially the U.S, are strained, it is important that India and like-minded G20 member nations step up and build the momentum for economic collaboration toward crisis mitigation.

Despite speculations from scholars to the contrary, the understanding among insiders and practitioners of 21st century diplomacy is that every G20 member, including the U.S. and China, is equally invested in the forum’s success and wants to contribute collectively and constructively towards positive results.

In 2022, India will chair the G20. It has the unique responsibility to prepare for the challenges this will entail as the world economy may still be reeling from the after-effects of the current crisis. India must keep an optimistic mindset and a keen eye on the changing power dynamics of the post-covid political landscape.

Rajiv Bhatia, Distinguished Fellow, Gateway House, is a former ambassador with extensive diplomatic experience, as well as an author.

This article was exclusively written for Gateway House: Indian Council on Global Relations. You can read more exclusive content here.

For interview requests with the author, or for permission to republish, please contact outreach@gatewayhouse.in

© Copyright 2020 Gateway House: Indian Council on Global Relations. All rights reserved. Any unauthorized copying or reproduction is strictly prohibited.

References

[1] Johns Hopkins University of Medicine, Coronavirus Resource Centre,

https://coronavirus.jhu.edu/map.html

[2] Rajiv Bhatia, ‘The action imperative for G20’, Gateway House, 2 April 2020,

https://www.gatewayhouse.in/g20-action/

[3] Stewart M. Patrick, ‘The Multilateral System Still Cannot Get Its Act Together on COVID-19’, Council on Foreign Relations, 26 March 2020,  https://www.cfr.org/blog/multilateral-system-still-cannot-get-its-act-together-covid-19

[4] G20 Trade and Investment Ministerial Meeting: Ministerial Statement, 14 May 2020, G20 Information Centre, University of Toronto, http://www.g20.utoronto.ca/2020/2020-g20-trade-0514.html

[5] ‘G20 Extraordinary Energy Ministers Meeting Statement’,10 April 2020, G20 Information Centre, University of Toronto, http://www.g20.utoronto.ca/2020/2020-g20-energy-0410.html

[6] ‘Extraordinary G20 Digital Economy Ministerial Meeting: COVID-19 Response Statement’ 30 April, G20 Information Centre, University of Toronto, http://www.g20.utoronto.ca/2020/2020-g20-digital-0430.html

[7] ‘Communiqué Virtual meeting of the G20 finance ministers and central bank governors’, Riyadh, Saudi Arabia, G20Information Centre, University of Toronto, 15 April 2020,

http://www.g20.utoronto.ca/2020/2020-g20-finance-0415.html

[8] Ibid.

[9] James McBride and Andrew Chatzky, ‘The Group of Twenty’, Council on Foreign Relations10 June 2019https://www.cfr.org/backgrounder/group-twenty

 

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