DUBAI: The world’s 20 most powerful countries unveiled a raft of measures on Wednesday to deal with the crippling effects of the coronavirus pandemic as it threatens a global slump to rival the 1930s Great Depression.
“Immediate and exceptional measures” were announced by finance ministers and central bank governors of the G20 under the Saudi presidency, including a suspension of debt repayments by the world’s poorest countries.
The measures include “implementing unprecedented fiscal, monetary and financial stability actions, and ensuring that international financial institutions can provide critical support to developing and low income countries.”
Mohammed Al-Jadaan, the Saudi finance minister, and Ahmed Alkholifey, governor of the Saudi Arabian Monetary Authority (SAMA) said: “We are determined to spare no effort, both individually and collectively, to protect lives, bring the pandemic under control, safeguard people’s jobs and incomes, support the global economy during and after this phase and ensure the resilience of the financial system.”
Al-Jadaan said two concrete actions had been decided. “First, delivering a joint G20 action plan in response to COVID-19 ... in order to advance international economic cooperation as we navigate this crisis and look ahead to a robust and sustained global economic recovery.
“And second, providing international financial assistance to the most vulnerable countries.”
Debt relief for poor countries was a controversial issue because the US — the biggest economy — opposed some of the proposals. In the end the group said: “We support a time-bound suspension of debt service payments for the poorest countries that request forbearance. All bilateral official creditors will participate in this initiative, consistent with their national laws and internal procedures.”
The 5,000-word declaration also bound G20 governments to “safeguard people’s jobs and incomes, support the global economy during and after this phase, and ensure the resilience of the financial system.”
The digital meeting committed G20 members to an action plan on coordinated health measures, an economic and financial response, and a strategy to return to “strong, sustainable, balanced and inclusive growth once containment measures are lifted.”
The International Monetary Fund warned this week that the pandemic threatened to put the global economy into the deepest depression since the aftermath of the Great Crash of 1929.
Financial markets around the world shed some of the gains of recent days’ trading, with the S&P index, the Wall Street barometer, down more than 2 per cent.
Oil prices fell further despite the historic deal by OPEC+ producers eager earlier in the week.