G20 ready to limit effects of coronavirus on global economy, Saudi finance minister

The official communique hammered out among the G20 policy-makers gathered in Riyadh over two days of discussions said that global economic growth was expected to pick up “modestly” this year and next, on signs of improving financial conditions and some signs of easing trade tensions.

“However, global economic growth remains slow, and downside risks to the outlook persist, inching those arising from geopolitical and remaining trade tensions, and policy uncertainty. We will enhance global risk monitoring, including the recent outbreak of COVID-19 (coronavirus). We stand ready to take further action to address those risks,” the communique said.

On so-called “trade wars” between the US and China which was not represented at the Riyadh meeting because of the outbreak  the communiqué said: “We will continue to take joint action to strengthen international co-operation and frameworks, and also reaffirm our commitments on exchange rates.”

There was general agreement by the ministers on measures on infrastructure investment, technology development, and plans to boost domestic capital markets across the world, especially in emerging and developing countries.

But a note of caution was also sounded in several areas.The G20 finance ministers said that “we are facing a global landscape that is being rapidly transformed by economic, social, environmental, technological and demographic changes.”

Apart from that mention of the environment, there was little attention given to the contentious issue of climate change. Towards the end of the communique, the ministers and governors said: “The financial stability board (of the G20) is examining the financial stability implications of climate change.”

The finance ministers’ gathering is the first formal event in preparation for the summit of world leaders that will take place in Saudi Arabia in November, with the three key aims of empowering people, safeguarding the planet and shaping new frontiers in technology and innovation.

The international taxation system was an area of focus at the finance ministers meeting, with some countries threatening a controversial digital tax. The communique said that “we continue to support tax capacity building in developing countries,” and called on all countries to sign multilateral agreements on tax matters. “We remain committed to the full, timely and consistent implementation of the agreed financial reforms,” it added.

Other big themes of the financial G20 meeting included inclusion of youth and women in the financial process. “We support the emphasis on digital financial inclusion of under-served groups, especially youth, women and small businesses,” the communique said.

There was also strong support for the work of the global Financial Action Task Force in combating money laundering and terrorism finance. “We reiterate our strong commitment to tackle all sources, techniques and channels of these threats,” the G20 ministers said, also backing measures to tackle the financing of nuclear proliferation. “We ask the FATF to remain vigilant with respect to emerging financial technologies that may allow for new methods of illicit financing,” it added.