The COVID-19 pandemic submerged the world for more than a year now, and global infection numbers are still rising. There are huge differences in the ability of governments and societies to cope with the pandemic: while Europe and the Americas remain epicentres of the disease, there are signs that infections are now also picking up across the African continent.
In an interesting turn-of-tide in discussion, the IMF calls for more public expenditure and higher taxation of the wealthy. The IMF states that economic recovery is possible in 2021 but dependent on both, access to vaccines and other medical interventions, and continuous effective policy support. Policy support needs to cushion the effects of the economic contraction, to decarbonize energy systems and economies, and for intensified multilateral cooperation to ensure universal access to vaccines and therapeutics and adequate financial liquidity of highly indebted countries.
The G20 has been mired in an ongoing crisis for years. After the G20, newly formed ten years ago at the level of heads of state and government, initially overcame the economic and financial crisis more or less successfully, the question quickly arose as to its role beyond reacting to crisis. Instead of taking on a proactive role as a strategic steering committee for the global economy, driving reforms and ensuring the provision of global public goods (such as climate protection and free trade), the G20 proceeded to jump from one issue to the next. The fact that its presidency changes every year has contributed to this ‘issue hopping’.
The G20 Finance Ministers and Central Bank Governors are meeting this weekend in Fukuoka, Japan, for their final meeting ahead of the G20 Summit at the end of the month. One issue that should feature high on the agenda is the rise of debt levels in many developing countries.