This op-ed was originally published by Project Syndicate.
The time is right for G-20 leaders to hold a second meeting to discuss measures to advance the implementation of the G-20 Action Plan, and agree to a more strongly coordinated global response to the health, economic, and social emergencies we face. The G-20 has demonstrated that it can bring people together around a common set of actions. What it decides next on the COVID-19 response will have a direct bearing on the future of the world economy.
Our world is at a critical moment. On May 30, the highest daily figure was recorded for new cases of COVID-19 worldwide. On every continent, countries are attempting to stop the transmission of the virus. Compared to pre-crisis levels, the International Labor Organization estimates a 10.5 percent decline in the number of hours worked, equivalent to the loss of more than 300 million full-time jobs. For the first time this century, global poverty is on the rise.
Therefore, as we did a month ago, to emphasize the urgency of delivering immediate relief to countries facing the effects of an unprecedented, global crisis. The problems faced by the poorest countries in Africa, Asia, and Latin America demand immediate action, as do those confronting diverse middle-income economies. Taken together, these countries represent nearly 70 percent of the world’s population and approximately one-third of global GDP.
The United Nations predicts that a worldwide recession would reverse three decades of improving living standards and plunge upwards of 420 million more people into extreme poverty. The World Food Program has estimated that 265 million of our fellow citizens are likely to suffer from crisis levels of hunger—an increase of 130 million over pre-pandemic levels. We are also hearing reports of the pressure on all health and other social services on which girls and women depend.
Moreover, COVID-19 has caused the greatest education emergency of our lifetime: 1.5 billion children—80 percent of all children—have been out of school. The majority are denied distance learning. Many may never return—many, we fear, may enter child labor. Millions who no longer receive school meals are going hungry, while at the same time education aid is being reduced.
The global economic and social emergency cannot end until we can bring the global health emergency to an end. And we cannot bring the health emergency to an end in any of our countries until we end it in all countries.
We welcome the $8 billion pledged on May 4 for vaccines, diagnostics, and therapeutic development as recommended by the Global Preparedness Monitoring Board, and urge that these contributions be paid immediately and be fully monitored and reported. But much more needs to be done:
- We need global coordination of the development, mass manufacture, and equitable distribution of a vaccine or vaccines to ensure that they are universally and freely available as quickly as possible.
- We urge every G-20 member to support in full the $7.4 billion replenishment on June 4 of Gavi, the Vaccine Alliance, which between 2021-25 will immunize 300 million children, saving up to eight million lives. While we fight COVID-19 we must not allow the resurgence of other infectious diseases.
- Closer cross-border collaboration is essential to increase now and for the future the limited global supply of vital medical equipment, and to make testing accessible in every country.
- Developing countries need immediate support from the World Health Organization and others to build up their health systems and capacities, as well as to improve their social safety nets.
- G-20 countries should support the U.N.’s appeal for support for refugees, displaced persons, and others who rely on humanitarian aid.
We note not only the multiple obstacles faced by developed countries in returning to growth, but also the deteriorating economic and fiscal conditions faced by many emerging, middle- income, and developing economies. More than 100 countries have now approached the International Monetary Fund for help, and more are expected to do so.
The IMF has said emerging markets and developing countries need $2.5 trillion to overcome the crisis, but only a fraction of that $2.5 trillion has so far been allocated.
While we welcome the good intentions at the heart of the G-20 Action Plan, concrete measures must urgently be agreed and be implemented in full:
- Debt relief for the 76 International Development Association countries needs to be scaled up radically to include relief by bilateral, multilateral, and private creditors until the end of 2021, and operationalized with urgency. Multilateral creditors must demonstrate that they are providing net new lending in response to the COVID-19 crisis. Time is running out for the voluntary process for private creditors coordinated by the Institute of International Finance, and a new binding approach now needs to be considered.
- A dozen or more emerging-market countries may well run into debt-servicing problems in the coming year. The IMF should be mandated to convene relevant players and, through its debt-sustainability and policy analysis, to set broad parameters for resolution.
- The G-20 should agree that the $2.5 trillion in support will now be provided. This requires the IMF, the World Bank, and regional development banks to raise their lending and grant ceilings. The multilateral development banks (MDBs) will likely increase their outstanding loan portfolio from the current $500 billion to $650 billion to $700 billion over the next 18 months. Without further increasing the resources available to the international financial institutions and allowing them to be more ambitious in deploying their capital, their ability to respond to the crisis will be severely constrained.
The consequences of not acting now would be felt for the rest of the decade. This is a time when countries should be willing to go beyond their normal fiscal deficit ceilings. The poorest, whose fiscal capacity is limited, need additional financial support from rich countries and multilateral organizations.
Social safety nets, regular health services, education, and climate-change initiatives—and for the 2030 timetable for the Sustainable Development Goals—must not suffer because of the fight to mitigate COVID-19 transmission. Thus:
- We need to ensure that the MDBs have sufficient resources for at least the next five years, which will require an additional $1 trillion in their combined portfolios. The individual institutions should be asked to provide plans for how they are to achieve these objectives. It will require them both to use existing capital more efficiently and to secure new sources of finance from borrowing, further capital increases, and the creation of new guarantee-based facilities like the International Finance Facility for Education (IFFEd).
- We reassert our commitment to the issuing of Special Drawing Rights (the IMF’s reserve asset), and to the transfer of existing, unused SDR allocations and new ones to countries most in need of support. Without requiring a reference to national parliaments, a decision on SDRs would release nearly $600 billion immediately, and more than $1 trillion by 2022. We call on the G-20 to build political support for an SDR allocation while engaging simultaneously in the necessary technical work, so that the measure can be implemented as soon as agreement is achieved.
A coordinated response
In the first stage of the crisis, the emphasis was on the provision of liquidity, employment protection, and emergency investments in health. Now, as we seek to return the world economy to pre-crisis levels of growth, enhanced fiscal, monetary, and central-bank coordination is vital.
- “Green” investment must be at the heart of the stimulus, with spending focused on infrastructure and other projects beneficial to sustainable development and employment. This will make recovery from this crisis truly transformative, accelerating progress in delivering on climate-change agreements.
- Consideration should be given to a global growth target, which can sit side by side with national inflation targets, and to rebuilding global trade.
- To raise vitally needed revenues for national governments, a coordinated strategy to recover money lost to tax havens should be agreed. Countries should automatically exchange tax information and remove secrecy surrounding beneficial owners and trusts, as well as agreeing to sanction noncompliant countries that refuse to implement the agreed rules.
Without action from the G-20, the recession caused by the pandemic will only deepen, hurting all economies—and the world’s most marginalized and poorest peoples and nations the most. Representing 85 percent of the world’s nominal GDP, the G-20 has the capacity to lead the mobilization of resources on the scale required. We urge leaders to do so immediately.
COVID-19 is a wake-up call to the global community. The global health and financial architecture must be strengthened, and in parts redesigned, to enhance our preparedness and capacity to act with speed and at scale to fight future crises. We should send a message of hope for the future: that the U.N., G-20 governments, and all interested partners can turn this crisis into an opportunity to build a new and more effective multilateralism, which more appropriately reflects current economic and political realities and is better equipped to address the challenges of the twenty-first century.
This commentary is co-signed by Karen Koning AbuZayd, U.N. Under-Secretary-General and former commissioner-general for the UNRWA; Philippe Aghion, Professor of Economics at Collège de France and the London School of Economics; María Elena Agüero, Secretary-General of the WLA Club de Madrid; Masood Ahmed, President of the Center for Global Development and former director of the IMF Middle East and Central Asia Department; Esko Aho, former Prime Minister of Finland; Shamshad Akhtar, U.N. Under Secretary-General, Executive Secretary of ESCAP, former Assistant Secretary-General at UN DESA and Governor of the State Bank of Pakistan; HRH Prince Turki bin Faisal Al Saud, Chairman of the King Faisal Center for Research and Islamic Studies; Christine Allen, Director of the Catholic Agency for Oversees Development; Amat Alsoswa, U.N. Assistant-Secretary-General and former UNDP Assistant Administrator and Regional Director for the Arab States Bureau; Abdulaziz Altwaijri, former Director-General of the Islamic Educational, Scientific, and Cultural Organization; Mohamed Amersi, Founder and Chairman of the Amersi Foundation; K.Y. Amoako, President and Founder of the African Center for Economic Transformation (ACET); Valerie Amos, U.N. Under-Secretary-General for Humanitarian Affairs, former Emergency Relief Coordinator, and former Secretary of State for International Development of the UK; Inger Ashing, CEO of Save the Children International; Nava Ashraf, Professor of Economics and Research Director of the Marshall Institute at LSE; Shaukat Aziz, former Prime Minister of Pakistan; Bertrand Badré, former Managing Director and Chief Financial Officer of the World Bank; Gordon Bajnai, former Prime Minister of Hungary; Jan Peter Balkenende, former Prime Minister of the Netherlands; Ed Balls, former UK Secretary of State for Children, Schools, and Families; Oriana Bandiera, Director of STICERD and Professor of Economics at LSE; Kaushik Basu, President of the International Economic Association and former World Bank Chief Economist; Carol Bellamy, former Executive Director of UNICEF; Nicolas Berggruen, Chairman of the Berggruen Institute; Sali Berisha, former President and Prime Minister of Albania; Suman Bery, Director-General of the National Council of Applied Economic Research in New Delhi and former Chief Economist at Royal Dutch Shell; Tim Besley, Professor of Economics and Political Science at LSE and former President of the International Economic Association; Valdis Birkavs, former Prime Minister of Latvia; Tony Blair, former Prime Minister of the UK; Mario Blejer, former Governor of the Central Bank of Argentina and Director of the Bank of England’s Centre for Central Banking Studies; Irina Bokova, former Director-General of UNESCO; Patrick Bolton, Professor at Imperial College London and Columbia University; Kjell Magne Bondevik; former Prime Minister of Norway; Dumitru Braghiș, former Prime Minister of Moldova; Lakhdar Brahimi, former Minister of Foreign Affairs of Algeria; María Eugenia Brizuela de Ávila, former Minister of Foreign Affairs of El Salvador; Gro Harlem Brundtland, former Prime Minister of Norway and Director-General of the World Health Organization; John Bruton, former Taoiseach of the Republic of Ireland; Robin Burgess, Professor of Economics at LSE; Micheline Calmy Rey, former President of Switzerland; Kim Campbell, former Prime Minister of Canada; Fernando Henrique Cardoso, former President of Brazil; Wendy Carlin, Professor of Economics at University College London; Hikmet Çetin, former Minister of Foreign Affairs of Turkey; Lynda Chalker, former UK Minister of Overseas Development; Joaquim Chissano, former President of Mozambique; Bai Chong-En, Dean of the Tsinghua School of Economics and Management; Joe Clark, former Prime Minister of Canada; Emil Constantinescu, former President of Romania; Radhika Coomaraswamy, U.N. Under-Secretary-General, former Special Representative for Children and Armed Conflict, and former U.N. Special Rapporteur on Violence Against Women; Ertharin Cousin, former Executive Director of the World Food Programme; Diane Coyle, Co-Director of the Bennett Institute for Public Policy at the University of Cambridge; Chester Crocker, former U.S. Assistant Secretary of State for African Affairs; Mirko Cvetković, former Prime Minister of Serbia; Marzuki Darusman, former Attorney General of Indonesia; Gavyn Davies, Co-Founder & Chairman of Fulcrum Asset Management, former Chief Economist & Chairman of the Global Investment Department at Goldman Sachs, and former BBC Chairman; Frederik Willem de Klerk, former State President of South Africa; Álvaro de Soto, former U.N. Under-Secretary-General; Kemal Derviş, Senior Fellow at the Brookings Institute, former Minister of Economic Affairs of Turkey, and former UNDP Administrator; Mathias Dewatripont, Professor at Université libre de Bruxelles; Božidar Djelić, former Deputy Prime Minister of Serbia; Beatrice Weder di Mauro, President of the Centre for Economic Policy Research; Mark Dybul, former Executive Director of the The Global Fund to Fight AIDS, Tuberculosis, and Malaria, Co-Director of the Center for Global Health Practice and Impact and Professor of Medicine at Georgetown University Medical Center; Šefik Džaferović, Chairman of the Presidency of Bosnia and Herzegovina; Victor J. Dzau, President of the National Academy of Medicine; Hans Eichel, former Minister of Finance of Germany and a G20 co-founder; Barry Eichengreen, Professor of Economics and Political Science at the University of California, Berkeley; Mohamed ElBaradei, former Director-General of the International Atomic Energy Agency; María Fernanda Espinosa, former President of the U.N. General Assembly and Minister of Foreign Affairs and Minister of Defense of Ecuador; Gareth Evans, former Foreign Minister of Australia; Jeremy Farrar, Director of the Wellcome Trust; Christiana Figueres, former Executive Secretary of the U.N. Framework Convention on Climate Change; Jan Fischer, former Prime Minister of the Czech Republic; Joschka Fischer, former Minister of Foreign Affairs and Vice Chancellor of Germany; Franco Frattini, former Minister of Foreign Affairs of Italy and European Commissioner; Louise Fréchette, former U.N. Deputy Secretary-General; Ahmed Galal, former Finance Minister of Egypt; Nathalie de Gaulle, former Chair and Co-founder of NB-INOV; Maitreesh Ghatak, Professor of Economics at LSE; Ian Goldin, former World Bank Vice President; Felipe González, former Prime Minister of Spain; Lawrence Gonzi, former Prime Minister of Malta; Rebeca Grynspan, Ibero-American Secretary-General, former Second Vice President of Costa Rica, and former U.N. Under-Secretary-General and Associate Administrator of UNDP; Ameenah Gurib-Fakim, former President of Mauritius; Sergei Guriev, former Chief Economist of the EBRD; Alfred Gusenbauer, former Chancellor of Austria; Tarja Halonen, former President of Finland; Han Seung-soo, former Prime Minister of South Korea; Ameerah Haq, former U.N. Under-Secretary-General and Special Representative of the Secretary-General in Timor Leste; Noeleen Heyzer, Member of the High-Level Advisory Board on Mediation of the U.N. Secretary-General and former UN Under-Secretary-General; Arianna Huffington, Founder and CEO of Thrive Global, Co-Founder of The Huffington Post; Mo Ibrahim, Founder of Celtel and Chairman of the Mo Ibrahim Foundation; Enrique Iglesias, former Foreign Minister of Uruguay and President of the Inter-American Development Bank; Ekmeleddin İhsanoğlu, former Secretary-General of the Organization of Islamic Cooperation; Roza Isakovna Otunbayeva, former President of Kyrgyzstan; Dalia Itzik, former Interim President of Israel and President of the Knesset; Gjorge Ivanov, former President of North Macedonia; Harold James, Professor at Princeton University; Hina Jilani, Advocate of the Supreme Court of Pakistan ; Ellen Johnson Sirleaf, former President of Liberia; Mehdi Jomaa, former Prime Minister of Tunisia; T. Anthony Jones, Vice-President and Executive Director of the Gorbachev Foundation of North America; Lee Jong-Wha, former Chief Economist and Head of the Office of Regional Economic Integration at the Asian Development Bank; Ivo Josipović, former President of Croatia; Agnes Kalibata, President of the Alliance for a Green Revolution in Africa; Angela Kane, former U.N. Under-Secretary-General for Management and U.N. High Representative for Disarmament Affairs; Mats Karlsson, former Vice President of External Affairs at the World Bank; Caroline Kende-Robb, former Executive Director of the Africa Progress Panel and Secretary-General of CARE International; Kerry Kennedy, President of Robert F. Kennedy Human Rights; Igor Khalevinsky, former Ambassador-at-Large at the Ministry of Foreign Affairs of Russia; Jakaya Kikwete, former President of Tanzania; Ban Ki-moon, former U.N. Secretary-General; Jadranka Kosor, former Prime Minister of Croatia; Anne Krueger, former First Deputy Managing Director of the IMF; John Kufuor, former President of Ghana; Chandrika Kumaratunga, former President of Sri Lanka; Aleksander Kwaśniewski, former President of Poland; Rachel Kyte, former World Bank Group Vice President and Special Envoy; Luis Alberto Lacalle Herrera, former President of Uruguay; Hervé Ladsous, former U.N. Under-Secretary-General for Peacekeeping Operations; Ricardo Lagos, former President of Chile; Zlatko Lagumdzija, former Prime Minister of Bosnia and Herzegovina; Mark Leonard, Co-Founder and Director of the European Council on Foreign Relations; Yves Leterme, former Prime Minister of Belgium; Justin Yifu Lin, former World Bank Chief Economist and Senior Vice-President; Elisabeth Lindenmayer, former U.N. Assistant-Secretary-General; Budimir Lončar, former Minister of Foreign Affairs of SFR Yugoslavia; Petru Lucinschi, former President of Moldova; Ricardo Luna, former Minister of Foreign Affairs of Peru; Nora Lustig, President Emeritus of the Latin American and Caribbean Economic Association; Jessie Rose Mabutas, Executive Board Member of the African Capacity Building Foundation; Graça Machel, former Education & Culture Minister of Mozambique; John Major, former UK Prime Minister; Susana Malcorra, former U.N. Under-Secretary-General for Field Support, Chef de Cabinet to UN Secretary-General, and Minister of Foreign Affairs of Argentina; Purnima Mane, former U.N. Assistant-Secretary-General and Deputy Executive Director of UNFPA; Giorgi Margvelashvili, former President of Georgia; Dalia Marin, Professor Emeritus at the University of Munich; Paul Martin, former Prime Minister of Canada; Colin Mayer, Professor of Management Studies at the University of Oxford; Carolyn McAskie, former U.N. Assistant Secretary-General for Peacebuilding Support; Donald F. McHenry, Ambassador and U.S. Permanent Representative to the U.N.; Péter Medgyessy, former Prime Minister of Hungary; Rexhep Meidani, former President of Albania; Girish Menon, CEO of ActionAid UK; Carlos Mesa, former President of Bolivia; Stjepan Mesić, former President of Croatia; Branko Milanović, Visiting Professor at The Graduate Center, CUNY; Aïchatou Mindaoudou, former U.N. Special Representative of the Secretary-General in Côte D’Ivoire; Benjamin Mkapa, former President of Tanzania; Amre Moussa, former Secretary-General of the Arab League and Minister of Foreign Affairs of Egypt; Amanda Mukwashi, CEO of Christian Aid; Rovshan Muradov, Secretary-General of Nizami Ganjavi International Center; Joseph Muscat, former Prime Minister of Malta; Mustapha Kamel Nabli, former Governor of the Central Bank of Tunisia; Piroska Nagy-Mohácsi, Program Director of LSE’s Institute of Global Affairs and former EBRD Director of Policy; Dawn Nakagawa, Executive Vice President at the Berggruen Institute; Bujar Nishani, former President of Albania; Chief Olusegun Obasanjo, former President of Nigeria; Punsalmaa Ochirbat, former President of Mongolia; Jim O’Neill, Chair of Chatham House; Djoomart Otorbayev, former Prime Minister of Kyrgyzstan; Leif Pagrotsky, former Swedish Minister of Industry and Trade and Minister of Culture and Education; Ana Palacio, former Spanish Minister of Foreign Affairs; David Pan, Executive Dean of Schwarzman College at Tsinghua University; Elsa Papademetriou, former Vice President of the Hellenic Parliament; Andrés Pastrana, former President of Colombia; P. J. Patterson, former Prime Minister of Jamaica; Thomas R. Pickering, former U.S. Under Secretary of State for Political Affairs and Ambassador to the U.N.; Navi Pillay, former U.N. High Commissioner for Human Rights; Christopher Pissarides, Nobel laureate in economics and Professor of Economics and Political Science at LSE; Rosen Plevneliev, former President of Bulgaria; Richard Portes, Founder and Honorary President of the Centre for Economic Policy Research; Jorge Quiroga, former President of Bolivia; Zeid Raad al Hussein, former U.N. High Commissioner for Human Rights ; Iveta Radičová, former Prime Minister of Slovakia; Fidel V. Ramos, former President of the Philippines; Jose Ramos Horta, former President of East Timor; Geeta Rao Gupta, former Deputy Executive Director of UNICEF; Òscar Ribas Reig, former Prime Minister of Andorra; Hélène Rey, Professor of Economics at the London Business School; Mary Robinson, former President of Ireland; José Luis Rodríguez Zapatero, former Prime Minister of Spain; Dani Rodrik, President-Elect of the International Economic Association; Gérard Roland, Professor of Economics and Political Science at the University of California, Berkeley; Petre Roman, former Prime Minister of Romania; Emma Rothschild, Professor of History and Director of the Center for History and Economics at Harvard University; Kevin Rudd, President of the Asia Society Policy Institute and former Prime Minister of Australia; Isabel Saint Malo, former Vice President of Panama; Juan Manuel Santos, Nobel Peace Prize laureate and former President of Colombia; Kailash Satyarthi, Nobel Peace Prize laureate and Founder of Bachpan Bachao Andolan, Global March Against Child Labour, and Global Campaign for Education; Wolfgang Schüssel, former Chancellor of Austria; Amartya Sen, Nobel laureate in economics and Professor of Economics and Philosophy at Harvard University; Ismail Serageldin, former World Bank Vice President of the World Bank; Fatiha Serour, former Deputy Special Representative of the U.N. Secretary-General in Somalia; Rosalía Arteaga Serrano, former President of Ecuador; John Sexton, President Emeritus of New York University and former dean of NYU School of Law; Jenny Shipley, former Prime Minister of New Zealand; Javier Solana, former Secretary-General of NATO and Secretary-General of the Council of the EU; Gillian Sorensen, former U.N. Assistant Secretary-General for External Relations; George Soros, Founder and Chair of the Open Society Foundations; Michael Spence, Nobel laureate in economics and Professor of Economics and Business at NYU; Devi Sridhar, Professor of Global Public Health at the University of Edinburgh; Danny Sriskandarajah, CEO of Oxfam; Eduardo Stein, former Vice President of Guatemala; Nicholas Stern, former Chief Economist and Senior Vice-President of the World Bank and Chief Economist of the EBRD; Joseph Stiglitz, Nobel laureate in economics, former Chief Economist of the World Bank, and Professor at Columbia University; Petar Stoyanov, former President of Bulgaria; Laimdota Straujuma, former Prime Minister of Latvia; Larry Summers, former Chief Economist of the World Bank, U.S. Deputy Secretary of the Treasury, Secretary of the Treasury, and Director of the National Economic Council; Boris Tadić, former President of Serbia; Jigme Y. Thinley, former Prime Minister of Bhutan; Eka Tkeshelashvili, former Deputy Prime Minister of Georgia; Danilo Türk, President of WLA-Club de Madrid and former President of Slovenia; Cassam Uteem, Vice-President of WLA-Club de Madrid and former President of Mauritius; Juan Gabriel Valdés, former Minister for Foreign Affairs of Chile and Ambassador to the U.N.; Justin van Fleet, President of Theirworld; Marianna Vardinoyannis, UNESCO Goodwill Ambassador; Andrés Velasco, former Finance Minister of Chile; Ann M. Veneman, former Executive Director of UNICEF and Secretary of the U.S. Department of Agriculture; Melanne Verveer, Executive Director of the Georgetown Institute for Women, Peace, and Security; Vaira Vike-Freiberga, former President of Latvia; Ernst-Ludwig von Thadden, former President of Mannheim University; Filip Vujanović, former President of Montenegro; Tim Wainwright, CEO at WaterAid UK; Leonard Wantchekon, Founder and President of the African School of Economics; Kevin Watkins, CEO of Save the Children UK; Shang-Jin Wei, former Chief Economist of the Asian Development Bank; Rowan Williams, former Archbishop of Canterbury; Elaine Wolfensohn, Co-Founder of the Wolfensohn Center for Development at the Brookings Institution; James Wolfensohn, former President of the World Bank; George Yeo, former Minister for Foreign Affairs of Singapore; Yu Yongding, Director of the Institute of World Economics and Politics at the China Academy of Social Sciences; Kateryna Yushchenko, former First Lady of Ukraine; Viktor Yushchenko, former President of Ukraine; Valdis Zatlers, former President of Latvia; and Ernesto Zedillo, former President of Mexico.
We are also grateful for the support from: Šefik Džaferović, Chairman of the Presidency of Bosnia and Herzegovina; Ken Ofori-Atta, Finance Minister of Ghana and Chair of the World Bank Development Committee.