G20 warns of risk to global economic recovery from virus variants

Children's shoes are displayed on the Degli Scalzi bridge, as a protest against climatic change of the environmental protection movement Extinction Rebellion , during a G20 Economy and Finance ministers and Central bank governors' meeting in Venice, Italy, Sunday, July 11, 2021. - AP

VENICE: An upsurge in new coronavirus variants and poor access to vaccines in developing countries threaten the global economic recovery, finance ministers of the world’s 20 largest economies warned on Saturday.

The G20 gathering in the Italian city of Venice was the ministers’ first face-to-face meeting since the start of the pandemic. Decisions include the endorsement of new rules aimed at stopping multinationals shifting profits to low-tax havens.

That paves the way for G20 leaders to finalise a new global minimum corporate tax rate of 15% at a Rome summit in October, a move that could recoup hundreds of billions of dollars for public treasuries straining under the Covid-19 crisis.

A final communique said the global economic outlook had improved since G20 talks in April, thanks to the rollout of vaccines and economic support packages, but acknowledged its fragility in the face of variants like the fast-spreading Delta.

“The recovery is characterised by great divergences across and within countries and remains exposed to downside risks, in particular the spread of new variants of the Covid-19 virus and different paces of vaccination, ” it read.

While G20 nations promised to use all policy tools to combat Covid-19, the Italian hosts of the meeting said there was also agreement to avoid imposing new restrictions on people.

“We all agree we should avoid introducing again any restriction on the movement of citizens and the way of life of people, ” said Italian economy minister Daniele Franco, whose country holds the rotating G20 presidency through to December.

The communique, while stressing support for “equitable global sharing” of vaccines, did not propose concrete measures, merely acknowledging a recommendation for US$50bil (RM209.5bil) in new vaccine financing by the International Monetary Fund, World Bank, World Health Organisation (WHO) and World Trade Organisation.

Differences in vaccination levels between the world’s rich and poor remain vast. WHO director-general Tedros Adhanom Ghebreyesus has called the divergence a “moral outrage” that also undermined wider efforts to tame the spread of the virus.

While some of the wealthiest countries have now given over two-thirds of their citizens at least one shot of the vaccine, that figure falls to well below 5% for many African nations. Italy said the G20 would return to the issue of vaccine funding for poor countries ahead of a Rome summit in October. ― Reuters

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