G20 to hold emergency video summit to discuss coronavirus
After weeks of inaction and division, the leaders of the G20 major economies will hold an emergency video-conference summit to discuss the coronavirus pandemic, but hopes of a coordinated global response remain low.
The summit on Thursday, nominally hosted by Saudi Arabia as this year’s G20 chair, is likely to agree to fresh practical measures aimed at preventing a repeat of the disjointed approach to Covid-19. But an expected call for a coordinated large-scale monetary and fiscal stimulus is unlikely to extend beyond general rhetoric.
The 27 leaders of the EU, the outbreak’s new centre, will also meet by video.
The World Bank and International Monetary Fund want the G20 to agree immediate bilateral debt relief to any of the world’s 76 poorest countries that make such a request. The UN has made a separate appeal for a £2bn humanitarian response fund to help the world’s poorest countries.
But expectations about the practical impact of the summit, bringing together countries representing more than 80% of global GDP, are low. In a sign of the G20’s defensive posture, the summit has been hastily assembled largely to prevent countries imposing barriers on exports of medical equipment, or launching competitive efforts to find a potentially hugely profitable vaccine.
Many world leaders are overwhelmed by the financial cost of responding to their individual national crises, and a few are even questioning how long they can tolerate the damage inflicted on their economies by lockdown measures.
Donald Trump and the Brazilian president, Jair Bolsonaro, have broken ranks from the global consensus to warn they will not allow their economies to be “closed down”.
The US president, his poll ratings suddenly soaring, has said he wants America’s restrictions eased by Easter. His aides have briefed that a chief US goal from the summit is to end Saudi increases in oil production, which are hitting the US shale industry.
Trump will hear a plethora of international institutions make sometimes competing calls for a global response. Few observers see the meeting as remotely matching the impact of the G20 summit in London in 2009, which is regarded as having turned the tide in the aftermath of the 2008 financial crisis.
“The heart of this problem is not economic as in 2008 but a breakdown in public health,” said Harry Broadman, a former senior World Bank official specialising in China. “You can put down all the money in the world, but the G20 needs to be talking about funding and distribution of ventilators and vaccines. You need public health officials as much as finance ministers.”
Agreement is nevertheless likely in principle that countries should share medical research on combating the virus, and that the World Health Organization should get a clearer role in preparing the world for future pandemics. Turkey has said it will promote an international fund to help measure demand for medical equipment and its distribution.
Jim O’Neill, David Cameron’s former adviser on pandemics, said a G20 investment of £20bn could finance development of Covid-19 treatments. “As world leaders gather to formulate a response to the crisis, they must not lose sight of this simple cost-benefit calculus,” Lord O’Neill said.
The G20 has no power to bind its members, and largely works by securing pledges for this kind of funding initiative.
Preparation time for the summit has been minimal. Stewart Wood, one of Gordon Brown’s senior advisers in 2009, said that in the run-up to that year’s summit, the then prime minister put in hours pressuring other leaders to “do their bit”. Saudi Arabia’s King Salman, aged 80 and rarely seen in public, is hardly such a galvanising leader.
Broadman warned that the backdrop for the summit was not propitious. “Currently there is a lot of finger pointing about the genesis of the crisis between China and the US, the two world’s largest economies,” he said. “There is also a tension about the Chinese role in supplying medical aid where historically the US would have played that role. There are also lower-order conflicts, [including] over the oil price between Russia and the Saudis.”
He added that normally such conflicts could be eased by personal chemistry between leaders at the summit. “There is a cost to having leaders not seeing other’s body language and expressions across the table in real time,” he said.
Ahead of the meeting the US secretary of state, Mike Pompeo, again accused China of covering up the outbreak in Wuhan and then indulging in “crazy talk” that the US sent the virus to China. It was reported that a virtual meeting of G7 foreign ministers on Wednesday could not agree a joint statement after the US demanded references were made to the “Wuhan virus” in the communique.
The summit is also likely to reflect the fact decisions on demand stimulus are likely to be taken at national or possibly regional level. The US fiscal stimulus, worth $2tn (£1.68tn) in relief to businesses and taxpayers, is the largest measure so far, but China, an export-led economy, is unlikely to make any matching proposal. Brown himself urged both China and the EU to match the scale of the US and UK fiscal stimuli.
Within Europe, France, Italy and Spain and six other euro area governments have called for the issuance of joint European debt to finance the fight against coronavirus, but this is being resisted by Berlin as a premature step. Until the EU can agree its own steps it is hardly likely to make a major investment to help the wider world.
In their conference call on Thursday, EU leaders are expected to sign off on “a true European crisis management centre”, according to a leaked document.
The EU already has an emergency response coordination centre, which operates 24/7 and can organise help, if asked, when any country in the world suffers an earthquake, forest fire, floods or pandemic. But the text seen by the Guardian refers to “a more ambitious and wide-ranging crisis management system within the EU”.
Additional reporting by Jennifer Rankin in Brussels