G20 endorses action plan on trade, investment and supply chains to support growth
19 October 2020
Finance ministers and central bank governors of the Group of 20 major economies at their meeting in Riyadh, Saudi Arabia, have agreed on an action plan to facilitate international trade, investment and to build resilience of supply chains to support growth, productivity, innovation, job creation and development, even as they committed themselves to specific actions to navigate the present crisis caused by the coronavirus epidemic.
They also committed themselves to strengthen international cooperation and frameworks, endorsed at the 15 April 2020 meeting and take steps to support recovery and achieve strong, sustainable, balanced and inclusive growth.
A communique issued at the close of the meeting underscored the urgent need to bring the spread of the virus under control, which is key to supporting global economic recovery.
The G20 leaders also committed themselves to continue working together to support the poorest countries as they address health, social and economic challenges associated with the Covid-19 pandemic.
In this, the G20 noted the role of the Debt Service Suspension Initiative (DSSI), which allows eligible countries to suspend official bilateral debt service payments through end-2020.
The International Monetary Fund (IMF) and the World Bank Group (WBG) estimates that together with exceptional financing, the DSSI is significantly facilitating higher pandemic-related spending. “The IMF and WBG have also continued to work on their proposal of a process to strengthen the quality and consistency of debt data and improve debt disclosure, and we look forward to further efforts in this area.
“In light of the continued liquidity pressure, while progressively addressing debt vulnerabilities, we agreed to extend the DSSI by 6 months, and to examine by the time of the 2021 IMF/WBG Spring Meetings if the economic and financial situation requires to extend further the DSSI by another 6 months, with targeted complements to the April 2020 DSSI Term Sheet as set forth in the attached addendum (Annex II), which is also agreed by the Paris Club. All official bilateral creditors should implement this initiative fully and in a transparent manner. We will continue to closely coordinate its ongoing implementation to provide maximum support to DSSI-eligible countries,” the G20 stated.
G20 noted that multilateral development banks (MBDs) have committed $75 billion to DSSI-eligible countries over the period between April-December 2020 alone, as part of their $230 billion commitment to emerging and low- income countries as a response to the pandemic. While protecting their current ratings and low cost of funding, MDBs are encouraged to go further on their collective efforts in supporting the DSSI, including through providing net-positive flows to DSSI-eligible countries during the suspension period, including the extension period.
G20 has sought details of the new resources provided to each eligible country as per the proposal by the Organisation for Economic Cooperation and Development (OECD) to host the data repository and to further update on the implementation of the Institute of International Finance (IIF) Voluntary Principles for Debt Transparency.
This is needed to ensure a stronger global financial safety net with a strong, quota-based, and adequately resourced IMF at its centre, and keep demands on IMF resources under close review, it added.
The G20 also decided to continue cooperation for a globally fair, sustainable, and modern international tax system, even as the leaders recognised the impact of the global pandemic and the work of addressing tax challenges arising from the digitalisation of the economy.
The G20 also welcomed the report approved by the G20/OECD Inclusive Framework on BEPS on the tax policy implications of virtual currencies as also the progress made on implementing the internationally agreed tax transparency standards.
They sought the early implementation of the Financial Stability Board (FSB) completing the evaluation of the effects of the too-big-to-fail reforms as also the reports on work to avoid harmful market fragmentation from the FSB and the International Organisation of Securities Commissions (IOSCO).
The leaders also welcomed the updated G20 Financial Inclusion Action Plan (2020 FIAP), which, they said, will guide the work of the Global Partnership for Financial Inclusion (GPFI) for the next three years.