By Foster Obi
International Monetary Fund (IMF) Managing Director Kristalina Georgieva has urged G20 leaders on the need to jointly build the foundations of a better 21st century global economy.
The IMF managing director made the following statement today following a virtual meeting of G20 Leaders’ Summit:
“During our meeting, I commended the G20 countries as a whole for taking unprecedented actions to mitigate the impact of COVID19—including fiscal and monetary measures– that have helped to prevent massive bankruptcies and an even deeper crisis.
“The Debt Service Suspension Initiative, in particular, gave many poor countries much needed temporary ‘breathing space’. The Common Framework for Debt Treatments beyond the DSSI, endorsed by G20 Leaders at this meeting, will allow low-income countries with unsustainable debts to apply for permanent debt relief on a case-by-case basis, with a level playing field for creditors. It is critical to operationalize this Framework promptly and effectively. Going forward, we must also help those countries not covered by the Framework to address debt vulnerabilities so that their economies can become more resilient.”
“I thanked the G20 for their support to the IMF, which has enabled us to deliver over US$100 billion in new financing to 82 countries and debt service relief for our poorest members. I also emphasized that the world is not out of the woods yet in terms of this crisis. Cooperation is going to be even more important going forward on three priority fronts:
First, end the health crisis. With vaccines on the horizon, we must ensure they reach everyone, everywhere. If we do this, the Fund estimates that it could add almost US$ 9 trillion to global income by 2025. There could be no better value for money—or for the world.
Second, reinforce the economic bridge to recovery. It is essential to sustain support to businesses and workers until we exit the health crisis—there must be no premature withdrawal. It is also time now to prepare for a synchronized green and digital infrastructure investment push to invigorate growth, to limit scarring, and address climate goals. If G20 countries act together, they can achieve two-thirds more at the same cost than if each country acts alone.
Third, build the foundations of a better 21st Century global economy. The most consequential uncertainty facing us today is how we can use the momentum of disruption caused by this crisis to build a better economy for all: revitalize the international trading system, foster an international system of taxation where everyone pays their fair share, and accelerate the transition to the new climate economy on which the health and prosperity of our children depends.
“Finally, we must not forget the world beyond the G20: the poorest countries that are least equipped to withstand shocks. The IMF will continue to count on the G20’s support to have all the necessary resources to best serve our member countries, and especially those who need our assistance the most.
“Since this is our last meeting of 2020, I would like to congratulate the Saudi authorities on a successful G20 presidency during a very challenging year—a year like no other. I look forward to next year’s G20 under Italy’s Presidency.”