Riyadh faces pressure from Washington to row back on its decision to hike oil production and offer the biggest price cuts in two decades (Bandar AL-JALOUD)

Riyadh (AFP) – Saudi Arabia’s King Salman on Thursday urged G20 leaders to take “effective and coordinated” action to combat the global crisis triggered by the coronavirus pandemic, amid forecasts of a deep economic recession.

US President Donald Trump and Russian President Vladimir Putin joined the emergency videoconference chaired by King Salman, who is also under pressure to end an oil price war with Moscow that has roiled energy markets.

The talks come amid criticism the group has been slow to address the COVID-19 pandemic, which has left a global death toll of more than 21,000 and triggered financial shockwaves as more than three billion people around the world are locked down in their homes.

“This human crisis requires a global response. The world counts on us to come together and cooperate in order to face this challenge,” the Saudi king said in his opening remarks as the summit began.

“We must have an effective and coordinated response to this pandemic and restore confidence in the global economy.”

As concerns mount for poorer countries without access to capital markets and adequate health facilities, the king also called on the world leaders to extend a “helping hand” to developing nations.

The world’s 20 most industrialised countries are scrambling to defend their virus-wracked economies amid forecasts they will likely plunge into a recession.

On Wednesday, the financial ratings agency Moody’s estimated the G20’s overall gross domestic product would contract by 0.5 percent this year, with the US economy shrinking by 2.0 percent and the eurozone by 2.2 percent.

“The G20 economies will experience an unprecedented shock in the first half of this year and will contract in 2020 as a whole,” Moody’s said.

While wealthy nations including the US have unveiled mammoth stimulus packages, there has so far been no collective action plan from the G20.

The IMF and World Bank on Wednesday urged G20 leaders to support its call for governments to put debt payments from the world’s poorest nations on hold.

World Health Organization chief Tedros Adhanom Ghebreyesus also urged G20 nations to offer support to “low and middle income countries”, including those from Sub-Saharan Africa.

– ‘Missing in action’ –

This week, French President Emmanuel Macron and his Chinese counterpart Xi Jinping pushed for an emergency G20 summit to limit the impact of the pandemic.

French presidential sources said the virtual meeting would focus on “coordination on the health level” as well as sending a “strong signal” to financial markets over efforts to stabilise the global economy.

But with world leaders divided, the meeting stands in contrast to the G20 summits following the 2008 financial crisis, when the group swung into action to mobilise assistance for vulnerable countries.

“The G20 is missing in action today, unlike 2008,” said Ian Bremmer, president and founder of the Eurasia Group risk consultancy firm.

Talk of global coordination has yet to resonate under Trump’s isolationist presidency.

On Wednesday, US Secretary of State Mike Pompeo took aim at China, saying the top diplomats of the Group of Seven agreed with him that Beijing was waging a “disinformation” campaign about the pandemic.

At the G7 talks, a day before the G20 summit, Pompeo alleged Beijing was engaged in a social media campaign that included conspiracy theories that the US was behind the virus, first detected in the Chinese metropolis of Wuhan. 

“If G20 leaders can put politics aside and reach a collective G20 agreement, countries have a better chance of success or of delivering more stimulus than on their own,” Markus Engels, from the Global Solutions Initiative, a network of think tanks, told AFP.

“Coordination among the G20 sends a strong message of unity and confidence, both of which are urgently needed now.”

Crude oil prices — hammered by the outbreak’s impact on demand as well as by a price war between Saudi Arabia and Russia — were also expected to be at the centre of the discussions.

Riyadh faces pressure from Washington to row back on its decision to hike production and offer the biggest price cuts in two decades, in retaliation for Russia’s refusal to tighten supply as the virus saps demand.

On Wednesday, Pompeo urged Saudi Crown Prince Mohammed bin Salman to “rise to the occasion” and “reassure global energy and financial markets”.

However, the Kremlin said “the oil topic” will not be discussed.

The G20 members will be joined by leaders from other affected countries including Spain, Jordan, Singapore and Switzerland, Riyadh said.

Leaders from international organisations such as the United Nations, World Bank, the World Health Organization and the World Trade Organization will also participate.

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Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.