G20 must adopt $2.5T Coronavirus plan, 225 global VIPs urge

More than 225 current and former world leaders, Nobel Prize winners and VIPs urged the world’s 20 largest economies to urgently agree a $2.5 trillion (Dh 9.2 trillion) Covid-19 recovery plan.

In an open letter, they said that poor and middle-income countries, which represent nearly 70 per cent of the world’s population and approximately one-third of global GDP, demand immediate action. Over 100 countries have approached the International Monetary Fund for help, they said, and more are expected to do so.

Without action from the G20, the prominent global figures warned that the recession caused by the pandemic will deepen, hurting all economies, “and the world’s most marginalized and poorest peoples the most.”

They said the G20 nations, currently led by Saudi Arabia, represent 85 per cent of the world’s nominal GDP and have “the capacity to lead the mobilisation of resources on the scale required.”

“We urge leaders to do so immediately,” their letter said.

The signatories include more than 75 former world leaders, three Nobel peace prize winners, four Nobel laureates in economics, former UN secretary-general Ban Ki-moon, philanthropist George Soros, former World Bank president James Wolfensohn, former Nato secretary-general Javier Solana and numerous former UN officials and past and present economists, humanitarian and health experts.

The summit meeting of the world’s economic powerhouses was started during the 2008 financial crisis, but leaders have held only one video meeting since Covid-19 began circling the globe, and their next meeting isn’t scheduled until November in the Saudi capital Riyadh.

UN Secretary-General Antonio Guterres urged the G20 leaders before that meeting in late March to adopt a “wartime” plan including a stimulus package “in the trillions of dollars” for people and businesses in the developing world trying to tackle the pandemic.

The G20 leaders did pledge on March 26 to inject over $5 trillion into the global economy to limit job and income loses from Covid-19, and to “do whatever it takes to overcome the pandemic.” But their response has been criticised.

The letter said, “May 30th saw the highest daily figure recorded worldwide for new cases of Covid-19,” with countries on every continent trying to stop transmission of the coronavirus. Around 6.19 million infections have been reported worldwide, with over 372,000 people dying, according to a tally by Johns Hopkins University. The true death toll is believed to be significantly higher, since many died without ever being tested.

The global figures said the G20 leaders need to hold a second meeting to advance implementation of their action plan “and agree to a more strongly coordinated global response to the health, economic and social emergencies we face.”

The G20 comprises the European Union and 19 countries: Argentina, Australia, Brazil, Canada, China, Germany, France, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom and United States.

Pointing to the increase in world poverty, former New Zealand prime minister Helen Clark said: “While we welcome the good intentions at the heart of the G20 action plan, concrete measures must urgently be agreed and be implemented in full.”

The signatories pointed to the IMF estimate that 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,” they wrote. “The G20 should agree that the $2.5 trillion level of support will now be provided.”

The global VIPs called for a doubling of the money available to the World Bank for emergency economic aid, and $1 trillion in additional special drawing rights for the IMF.

They also said debt relief for some 76 countries agreed to in April by the G20 – including 40 poor countries in sub-Saharan Africa – “needs to be scaled up radically to include relief by bilateral, multilateral and private creditors until the end of 2021,” and it needs to be done urgently.

Former British Prime Minister Gordon Brown, who chaired the G20 summit in 2009 and helped organize the letter, said: “Without a G20 leaders’ meeting online soon… a vacuum in global leadership will open up just at the time when we need global action most – to avoid a second wave of Covid coming out of the poorest countries and to move the world economy from rescue operations to planning a global recovery.”

He said a G20 summit, unlike US President Donald Trump’s expanded Group of Seven summit proposed in September, would include representatives from Africa, Latin America, the Middle East and most of Asia and “could agree a global growth plan and unite a divided world.”