G20: Will rich countries make progress on climate and vaccines? | Business and Economy News
Climate crisis, vaccine fairness, an energy crisis and grunts from the global supply chain will be in the spotlight as leaders of the world’s 20 largest economies meet at the G20 summit in Rome, Italy , this week-end. But reaching consensus on pressing issues could be elusive, analysts warn.
The meeting, the first in-person gathering of Group of 20 (G20) leaders since 2019, comes as the global economic recovery from the coronavirus pandemic faces many challenges – from new strains of COVID-19 to shortages of supply and inflation. It will also indicate how close – or far from each other – major economies are to shifting the needle on the climate crisis, with the kick-off of the United Nations Climate Change Conference (COP26) in Glasgow. , Scotland, Sunday.
But with Chinese President Xi Jinping and Russian President Vladimir Putin expected to visit the G20 virtually rather than in person, and the leaders of Japan, Mexico and Saudi Arabia also choosing not to visit Rome, finding common ground on pressing issues could prove even harder.
“The G20, like any membership association, is not as strong as its members want them to be,” said Matthew P Goodman, senior vice president of economics at the Center for Strategic and International Studies (CSIS). “You’d think COVID-19 would pass the test of a real crisis, but it’s hard to get this group of countries to agree on anything. “
The climate finance gap
The G20 was created following the Asian financial crisis of the 1990s to give emerging economies a greater voice in global financial affairs. The annual leaders’ summit became a regular event in 2008 – in response to the global financial crisis.
With a list of members who accounts For more than 80 percent of the world’s gross domestic product, 75 percent of global trade, and 60 percent of the world’s population, the club is uniquely positioned to set priorities and mobilize resources to address them.
“The G20 obviously has macroeconomic issues as its traditional objective, but global health security and global warming are major obstacles to prosperity,” Stewart M Patrick, director of the International Institutions and Global Governance program at the Council on Foreign Relations (CFR) , told Al Jazeera.
A recent report showed rich countries broke their pledge of $ 100 billion in funding to help poorer countries tackle climate change. But any G20 climate agreement is likely to set a positive tone for COP26 discussions.
G20 leaders can promise to stop funding coal-fired power plants outside their borders, but pre-summit negotiations reveal differences over when to phase out coal use at home, Bloomberg News (paywall) reported, citing officials briefed on the talks.
According to the International Energy Agency, coal powers about 60% of China’s electricity and about 70% of India’s. In the short term, this dependence is compounded by the current global energy crisis which, along with other supply chain bottlenecks, is fueling inflation and hindering economic recovery.
Faced with power outages, idling factories and the onset of winter, China has relaxed regulations on domestic coal production.
“On the climate, the result is likely to be more gradual than dramatic,” said CFR’s Patrick.
He added that United States President Joe Biden will surely push for green initiatives, but domestic politics could cast a shadow.
“Biden’s position is likely to be weak given the uncertainty over whether Congress will enact enough green infrastructure and climate-related spending in the two huge bills he is considering,” Patrick said. .
The jab divides
Closing the growing gap in coronavirus vaccination rates between rich and poor countries is also exacerbating inequalities between nations.
G20 health and finance ministers said on Friday they would take action to ensure that 70% of the world’s population is vaccinated by the middle of next year – six months earlier than their previous schedule, Reuters news agency reported.
The clock is turning. Earlier this month, the International Monetary Fund warned of a “dangerous divergence” in recoveries between more mature and developing economies, with vaccine availability a key factor.
Of the 1.3 billion doses that rich countries have pledged to give to poor countries under the World Health Organization’s COVID-19 Vaccines Global Access Facility (COVAX) program, only 356 million have been provided.
Earlier this week, Amnesty International urged G20 countries to put aside “greed and selfishness” and ensure equitable distribution of vaccines, noting that rich countries are sitting on some 500 million doses.
A key stumbling block is patent protection, which some countries would like to waive, arguing that there are more hits in more weapons.
Last October, India and South Africa submitted a appeal to the World Trade Organization on behalf of a group of countries urging the lifting of patent protections so that these countries can produce generic versions of vaccines.
But the United States, the European Union, the United Kingdom and Japan have blocked efforts. In a shocking move, Biden announced that the United States – generally a strong advocate of intellectual property rights – would support the lifting of patent protections for COVID-19 vaccines.
“The G20 remains divided on liberalizing vaccine trade and granting intellectual property waivers to allow greater domestic production by developing countries,” said Patrick of the CFR.
The G20 is also divided over the creation of a world health council to help countries coordinate their actions. The United States, the European Union, Japan and the United Kingdom support it, unlike the BRIC countries, namely Brazil, Russia, India and China, added Patrick.
Debt: “Statements of support in principle”
Debt is another factor in the growing division between the richest and the poorest nations.
The debt burden of the world’s low-income countries has actually increased 12% to a record $ 860 billion in 2020 due to the pandemic, according to a recent report from the world Bank.
The G20 took action on debt through the Debt Service Suspension Initiative (DSSI), which entered into force on May 1, 2020, benefiting 46 low-income countries with deferred payments. But the program will expire at the end of 2021.
Earlier this week, the United States called for faster progress in restructuring the debts of heavily indebted countries under the Common Framework for Debt Treatment and blamed “China’s inability to take certain decisions ”.
“I guess the G20 will approve an extension of DSSI,” Goodman of CSIS told Al Jazeera. “The common framework – which includes debt restructuring and debt cancellation – I think we’ll see statements of support as a matter of principle, but it can be difficult to get countries to agree to go ahead on this. “
China has backed down: its development bank wants to be seen as a private creditor rather than part of the government. And Beijing is reluctant to join the Paris Club – a group of lending countries seeking a common approach to debt restructuring, Goodman added.
“If one country cancels its debt and another does not, the payments obviously favor the second country,” he said, also stressing the need to involve the private sector as well. “If the governments write off the debt but the banks are paid off, that will be a problem. “