Few results from G-20 meeting as decisions await new US administration

WASHINGTON — The G-20 discussions and resulting communiqué from the leaders’ meeting over the weekend include some positive language, but more concrete action on a number of issues — from COVID-19 response to climate — has been delayed until the next U.S. presidential administration is in place, experts told Devex.

There was extensive discussion among the group of leading economies about COVID-19 response, particularly in remarks by heads of state following a series of announcements about several effective vaccines. But there were no significant new funding announcements or commitments, Jaime Atienza, debt policy lead at Oxfam, told Devex.

“We’ve heard some nice words about ensuring everyone gets a vaccine but heard very little about how this will happen or how to finance it or how poor people will get it,” he said.

With wealthy countries buying more than 50% of vaccines in advance, Oxfam estimates that people in developing countries will not receive vaccines until 2022 and has proposed moving to a patent-free vaccine that would allow more production and lower prices, Atienza said.

The communiqué says that the G-20 countries have supported the research, development, manufacturing, and distribution of safe and effective vaccines, diagnostics, and therapeutics and that they will “spare no effort to ensure their affordable and equitable access for all people, consistent with members’ commitments to incentivize innovation.”

It goes on to say that, “in this regard,” the G-20 fully supports the Access to COVID-19 Tools Accelerator initiative and the COVAX Facility. There are member countries — namely the U.S. — that have not publicly supported the initiative to date, but the language is relatively vague, so it is unclear whether more countries will sign on.

There was also little movement on the debt front, though G-20 leaders affirmed the decision to extend the Debt Service Suspension Initiative through June and the agreement on the debt framework. A sticking point on the debt framework — applying it to countries outside the 73 with the lowest incomes that are included in the DSSI — remains an issue for China, though the U.S. has said it supports such an expansion, said Eric LeCompte, executive director at Jubilee USA.

The framework does still bring all countries together under one system, helping to limit secret negotiations, which have sometimes resulted in nations giving away resources to creditors, LeCompte said.

Questions remain about the implementation of the framework, the amount of debt restructuring versus reductions, and how the private sector might participate. Private actors have yet to come out and say that they will restructure debt on the same terms if debtor countries approach them, Atienza said.

Beyond debt and a broad COVID-19 response, which has been one of the most discussed issues this year, the communiqué includes language about a number of other issues the G-20 is engaged on: trade, tax law, transparency, and climate.

“It is clear the Saudis had a fairly progressive agenda wanting to deal with financing structural issues in a more proactive way, but you see ultimately the lack of detail in the communiqué illustrates the lack of agreement in some places,” LeCompte said. When pressed as to where, he said it is “all over the communiqué.”

The G-20 included some language in the communiqué suggesting that it is trying to look at climate more seriously, LeCompte said. The G-20 is the “only group” in the short-to-medium term that has the ability to make binding decisions on climate and climate finance, he said, adding that he is hopeful there will be follow-up in the coming months and more working groups on the issue.

LeCompte said there is an expectation that U.S. President-elect Joe Biden will call for an emergency G-20 meeting early in his administration, which could be an opportunity to push forward on a number of issues, including climate and International Monetary Fund Special Drawing Rights. Some of the issues were seemingly being pushed until next year in anticipation of a new U.S. administration with different views, Atienza said.

While the communiqué does not mention SDRs, which would provide countries with additional liquidity, Saudi Arabia Finance Minister Mohammed al-Jadaan told the Financial Times that G-20 countries were nearing a consensus on a new SDR issuance.

Depending on the size of the issuance, it could require approval by the U.S. Congress and other legislative bodies. It is more likely that the G-20 would agree to a smaller issuance that would avoid legislative approval, despite calls from development advocates for IMF to issue $3 trillion in SDRs.

About a third of any SDR issuance would go to developing countries, providing them with much needed capital, and any issuance could be done in tandem with a vehicle for higher-income countries to donate their SDRs to low-income countries, Atienza said.

The U.S. has been vocally opposed to SDRs, publicly saying that high-income countries still have significant unused SDRs and there are other tools that should be used instead, noting that it is exploring the possibility of allocating existing SDRs. Behind the scenes, though, the U.S. is seemingly against a new issuance in part because it would also provide funding to countries — including Iran and Venezuela — that it does not want to support, Atienza said.

While there are indications that a Biden administration could support SDRs, there has not been a formal commitment to do so, and other priorities could mean that doing this gets delayed, Atienza said.