Comment: Yousef Al-Benyan of B20 Saudi Arabia argues that the G20 countries must partner with healthcare community, business and civil society on a coordinated global fightback against Covid-19
The Covid-19 pandemic continues to spread, shifting the epicentre from one continent to the other and making it difficult to monitor the ever-increasing number of cases and deaths in real time. While some parts of the world are showing promising signs of abatement, others have yet to peak as citizens watch on nervously awaiting the next inflexion point.
The impact on our global economy has been devastating. Since the World Health Organization (WHO) declared Covid-19 as a pandemic, the International Monetary Fund (IMF) has officially announced that the global economy is in recession and, along with an analysis of the International Monetary and Financial Committee, it expects that global output will contract this year as a result of the “sudden stop in economic activity”. Meanwhile, the International Labour Organization (ILO) estimates that 25 million workers would be rendered unemployed, a number that could increase significantly.
A global catastrophe with chronic health, social and economic ramifications calls for extraordinary and coordinated measures, both within and among countries. We have seen that countries pull together in times of global crisis. That is in fact what led to the establishment of the G20 Leaders’ Summits in response to the financial collapse of 2008. It is for this same reason that B20 Saudi Arabia, the private sector engagement group of the G20, has launched an initiative to address the current impact of the coronavirus on the global economy and identify recommendations that could be implemented as we begin our financial recovery.
Governments cannot be expected to manage a crisis of this proportion single-handedly; they must partner with the healthcare community, business and civil society alike to truly make a difference. Two weeks ago, the B20, in concert with the International Chamber of Commerce (ICC), the institutional representative of more 45 million businesses, alongside the WHO, called on the G20 to focus on the huge socio-economic impact of the pandemic being felt most acutely by the poor and vulnerable of the world.
The implementation of urgent short- and medium-term fiscal policy measures to support economic recovery in recent weeks have been well received. But there is still more to be done. Now is the time for all governments to directly apply all available fiscal levers to steady the global economy.
To support these efforts, B20 Saudi Arabia is working with the G20 to adopt a common framework for coordinated global action against the pandemic. The Extraordinary G20 Leaders’ Summit, which took place on 26 March, committed to protecting lives, safeguarding jobs and incomes, minimising disruption to trade and global supply chains, and coordinating on public health and financial measures. From the perspective of the global business community, the question to address now is how do we go about this?
A crisis at home is no excuse to leave the most vulnerable populations behind, particularly in the many developing countries that reside outside the G20
One of the commitments made at the summit was to expand manufacturing capacity to meet the increasing needs for medical supplies and ensure these are made widely available, at an affordable price and on an equitable basis. Also, it is important to address inhibitive costs components including margins, domestic and international taxes and tariffs, quotas, anti-hoarding mechanisms, as well as ensuring appropriate logistics and supply chains, such as air cargo facilities, remain operational.
The commitment to bolster coordination towards the rapid development, manufacturing and distribution of diagnostics, antiviral medicines and vaccines is also welcome. A global mechanism must be established to coordinate investments into research and development, prioritising the most effective products, ensuring large scale manufacturing to enable equitable and affordable access to populations that need them.
It is evident that a large increase in international assistance is going to be required over the coming months. A crisis at home is no excuse to leave the most vulnerable populations behind, particularly in the many developing countries that reside outside the G20. The G20 announcement to strengthen capacity-building and technical assistance to at-risk communities is the right one. It must be matched by significantly scaling financial assistance by increasing aid funding for public health programmes, and broader social and economic interventions.
In terms of safeguarding the global economy, the need to prioritise direct support to small businesses and workers is clear. Micro, small and medium-sized enterprises, which form the backbone of the world economy and account for upwards of 80% of employment in many countries, are being hardest hit. Viability of the millions of small businesses across the world upon which so many workers and families rely must be maintained. The $5tn injection already announced by the G20 is a good initial response, but more may yet be required.
Finally, I’d like to address the urgent need to scale-up social protection for displaced and affected workers. This will take different forms in different geographies and circumstances. It could include a daily allowance, deferment of credit repayments and other liabilities, for workers displaced and affected due to shutdowns and lockdowns, and those infected by the Covid-19. The global business community is already mobilising at scale in many domains, and political leadership is required to help steer this.
A unified front is the only way for us all to come through the other side of this crisis and put society on the path to recovery
In the coming weeks the B20 will be leading engagement opportunities to address the impact of the pandemic and move towards actions to mitigate its fallout. In mid-April it will be hosting virtual meetings of its taskforces and the Women in Business Action Council. The objective will be to develop and agree on impactful and action-oriented policy recommendations considering the new operating environment.
A unified front is the only way for us all to come through the other side of this crisis and put society on the path to recovery. Time and again during challenging times we have joined forces to combat a common global challenge and succeed. For sure, Covid-19 is a formidable foe, but if history is any indicator, we will surely defeat it. In talking to the global business community through my capacity as chair of B20 Saudi Arabia, I know I am not alone in this view.
Mr Yousef Al-Benyan is the chair of B20 Saudi Arabia, the business voice for the G20. He is also the CEO of SABIC, one of the world’s largest chemical companies.