In its official recommendations on the current coronavirus crisis, the G20's official business voice has warned against government regulations during the pandemic becoming permanent in the post-Covid era as countries increasingly seek to chart out their own path in battling the global Covid-19 crisis.
In a special report on the crisis and action plan to mitigate it, the Business Twenty (B20), which acts as the official G20 dialogue with the business community, has also urged governments to reduce export restrictions on pharmaceutical products, ramp up export credit and end selective biases towards movement of people across borders. It has also flagged the need to monitor the risks to financial stability among those lending institutions that bear the burden of rolling over temporarily the global economy’s debts.
The report has repeatedly pointed out the phenomenon of governments adopting strict policies keeping in mind national needs may backfire if not coordinated properly. Instead, the B2 has pushed for greater international cooperation, warning that 'any primacy of “nation first" policies instead of globally coordinated approaches will almost certainly lead to greater economic costs for all'.
It also pointed out that governments have increasingly encroached onto the turf of private business through regulations. "There might be room for a broader consideration regarding the role and the weight of the State in national economies and, most of all, in corporate governance.
However, such support and emergency regulation should not turn to interfering in or disorienting market-place forces," it said.
As the voice of the private sector to the G20, it represents the global business community across all G20 member states and all economic sectors. Currently, it is chaired by Saudi Arabia since the fifteenth G20 Summit is still set to be held in Riyadh on November 21-22, 2020.
It has called for increasing multilateral lending to developing countries (both to middle- and low-income economies) in order to ensure in risk mitigation, crowding in private capital and improving debt sustainability in the medium term. Crucially, it has suggested that coordinated intervention may be needed if there is further appreciation of the US dollar, currently impacting developing and low-income countries.
With regards to global trade, the body has pushed reducing the capital treatment for MSME exposures for lending to a risk weight between 75 and 85 percent in line with the Basel 3 proposed regulations. Removing procedural delays at the points of loading and impediments to cargo transportation and addressing tariff and non-tariff barriers to facilitate agricultural trade also ranks high on its agenda. Calls have again been made for expediting the implementation of the WTO Trade Facilitation agreements.
It has also suggested the Financial Stability Board monitor the risks to financial stability among those lending institutions that bear the burden of rolling over temporarily the global economy’s debts. "As credit standards are relaxed in response to the crisis, the build-up of positions must be tracked and communicated to regulators," it said.
The B20 has also batted for nations renewing the current moratorium on custom duties on electronic transmissions enforced by the World Trade Organization, something India is opposed to.
Collectively, the G20 economies account for around 90 per cent of the gross world product, 80 per cent of world trade, two-thirds of the world population and approximately half of the world land area.