Economy

Extraordinary G20

Saudi Arabia Stepping Up?

Saudi Arabia hosted an extraordinary virtual G20 Summit this week.

Saudi Arabia’s King Salman hosted the leaders of the world’s 20 largest economies at an extraordinary virtual summit on March 26 to discuss a collective response to COVID-19 pandemic.

The Saudi government opened the summit with a speech by extending the country’s “deepest condolences to all countries around the world and to their respective citizens over the lives lost to this pandemic.”

Saudi Arabia will host the annual G20 summit this year from November 21-22 in the country’s capital, Riyadh.

Although G20 is a once-a-year gathering of the world’s strongest economies, last time the group convened twice within the same year was in 2009 and 2010, the peak of the global financial crisis. With analysts expecting a global economic recession in coming months, world leaders are stepping up to find a solution to the looming financial and social disaster.

Calling for a decisive response to restore confidence in the global economy, King Salman emphasized the importance of coordinating financing for research and the development of a vaccine for COVID-19, as well as guaranteeing the availability of the vital medical supplies and equipment.

The “whatever it takes” approach of global political leaders in this crisis is reminiscent of the world’s biggest central banks like the Federal Reserve and the European Central Bank when they unleashed unprecedented quantitative easing to reassure markets that they would do all in their power to support the maintenance of commercial activities in the global economy.

In fact, sitting at the throne of the world’s strongest central bank, Fed Chairman Jerome Powell delivered a rare TV interview in the wake of an approval of a USD2.2 trillion economic aid package by the US Senate and said that the Central Bank “would not run out of ammunition to support the economy in this unique crisis.”

“We are not an expert in pandemics over here, we want to listen to the health experts,” he told NBC’s Today program as he tried to deliver guidance to market players.

A new era for the global economy

This year’s agenda for G20 presidency is centered around three key messages; shaping new frontiers, safeguarding the planet, and empowering people.

As the spread of COVID-19 brings the global economy to a grinding halt, forcing people to find opportunities for remote access to work and for multinational companies to sustain the steady flow of their supply chains, eyes will be turned to digital transformation efforts as part of the “shaping new frontiers” element of the presidency.

And while the recent pandemic poses threats to the very existence of conventional methods for conducting global trade, Saudi Arabia has pledged to address the modern problems facing the labor markets, business models, and institutions.

“The G20 will continue to address these challenges throughout the presidency year including the implications for future skills needs, enabling all businesses to take advantage of the digital economy, and defining the framework for a trustworthy human-centered economy,” the official G20 agenda states.

Although previous G20 summits focused on historic issues such as migration and global trade wars, Saudi Arabia’s chairmanship this year will be of unprecedented importance as the COVID-19 pandemic shapes new frontiers across the world.

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