G20 looks at uneven pandemic recovery

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A Saudi man adjusts his headcover ahead of a meeting of Finance ministers and central bank governors of the G20 nations in the Saudi capital Riyadh on November 18, 2020. AFP

Group of 20 (G20) finance ministers and central bankers began a videoconference on April 7 to coordinate post-pandemic recovery plans, increase help for the poorest Covid-hit countries and discuss a US-backed global minimum corporate tax.

The meeting hosted by current G20 chair Italy comes a day after the International Monetary Fund (IMF) forecast faster than expected global economic growth this year, of 6.0 per cent, after the coronavirus pandemic in 2020 caused the worst peacetime downturn since the Great Depression.

But developing countries are lagging behind, and US Treasury Secretary Janet Yellen has warned of the risk that the pandemic reverses years of progress in fighting poverty and closing the gap between poor and rich nations.

Top of the agenda of the G20 meeting is whether to extend a moratorium on debt interest payments for the poorest countries, which is currently set to expire on June 30.

World Bank president David Malpass said this week he expects the G20 to prolong the moratorium.

But its impact has been relatively limited, with just 46 out of 73 eligible countries having asked for and obtained a delay on payments totalling $5.7 billion, the latest official figures show.

The G20 is also expected to support the IMF’s plan to boost its reserve offerings, increasing its allocation of special drawing rights (SDR) by $650 billion, to help impoverished countries.

And the issue of a global minimum tax rate for corporations is also up for discussion after the new US administration under President Joe Biden threw its weight behind the idea.

The reform, supported by the IMF and by major economies including France and Germany, is aimed at ending tax competition between countries and the use of tax havens by companies.