Global Business

UAE ‘directly in sync’ with G20 priorities

Staff Report/Dubai
Filed on November 21, 2020
Saudi King Salman bin Abdulaziz giving his opening remarks as US President Donald Trump and Russian President Vladimir Putin are projected on a screen at the International Media Centre in Riyadh on Saturday.


Emirates throws weight on supporting post-Covid recovery; Saudi Arabia pledges more investment opportunities

Leaders of the 20 biggest world economies (G20) are discussing how to deal with the unprecedented Covid-19 pandemic that has caused a global recession and how to manage the recovery once the coronavirus is under control, with the UAE emphasising the importance of the human solidarity and communication.

Reem bint Ebrahim Al Hashemy, UAE Minister of State for International Cooperation, said in a virtual panel discussion that throughout the Covid-19 crisis, the world had to come to terms with the fact that it had become a global village with shared resources.

Pointing out that the decision to postpone Expo Dubai to next year was difficult to make, but ultimately the only option under the circumstances, Al Hashemy said the UAE was looking forward to welcoming global citizens to the event. The theme of ‘Connecting Minds, Creating the Future’, and subthemes of “Opportunity, Mobility and Sustainability”, were directly in sync with the priorities of the G20, she said.

She outlined the UAE’s experience on national and global levels, guided by the principals of humanity and cooperation, and founding on science and facts, explaining: “The UAE has taken effective measures to ensure the maximum containment of the virus, including conducting millions of tests, and helping others beyond its borders, based on the deep-rooted belief in the importance of solidarity and international cooperation.”

Al Hashemy also indicated that the UAE provided medical aid and protective kits to 120 countries around the world, reaching more than 1.6 million beneficiaries in the medical sector, to help contain the pandemic. This aid has proven the UAE’s enormous logistic and storage capacities, despite the challenges and constraints most of the global shipping and storage sectors have faced.

Restoring order

Obaid bin Humaid Al Tayer, UAE Minister of State for Financial Affairs, represented the UAE in the final meeting of G20 finance ministers that discussed the latest developments related to financial track plans post-Covid.

Al Tayer provided a view on restoring recovery post the Covid-19 pandemic, and on the importance of infrastructure finance and the flow of investments as catalysts for restoring a strong, comprehensive and balanced global economic growth. He added: “We also believe that our joint path of recovery will require embracing new financing methods to build resilient infrastructure, while also working with the private sector on new investment models to accelerate the development process.”

Big, crucial talks

High on the agenda of the G20 summit — under the presidency of Saudi Arabia — are purchases and global distribution of vaccines, drugs and tests for low-income countries that cannot afford such expenses themselves. The European Union was to urge the G20 to invest $4.5 billion to help.

In his opening remarks, the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz of Saudi Arabia, stressed the need for equitable access to the tools to combat Covid-19, including vaccines.

“We must work to create the conditions for affordable and equitable access to these tools for all peoples. At the same time, we must prepare better for any future pandemic,” he told the group via video link.

To prepare for the future, the EU will propose a treaty on pandemics.

“An international treaty would help us respond more quickly and in a more coordinated manner,” the chairman of EU leaders Charles Michel will tell the G20 today.

Saudi FDI jumps

Meanwhile, Saudi Arabia’s Minister of Investment Khalid Al Falih said on Saturday foreign direct investment (FDI) increased by 12 per cent in the first half of 2020 compared with the same period last year.

The Saudi government has made attracting greater foreign investment a cornerstone of its Vision 2030 plan to diversify the economy of the world’s largest oil exporter away from oil revenues.

“I’m glad to say that FDI, my area of focus, in the first half has been reported to increase by 12 per cent compared to last year,” Al Falih, who previously chaired state oil company Saudi Aramco, told a G20 conference.

Al Falih said in September the kingdom had experienced a slowdown in FDI this year due to the global disruption caused by the Covid-19 pandemic.

“When I mentioned the 12 per cent increase I wanted to assure people that there was no decline, our FDI target is much higher,” Al Falih said on Saturday.

As part of efforts to attract foreign investors, Saudi Arabia will launch next year special economic zones dedicated to several sectors, he added.

In addition to attracting higher investment volumes, it will focus on “qualitative growth”, he said, mentioning areas such as cloud computing, renewable energy, tourism, culture, entertainment, and logistics.

“These investments may have lower investment volumes but higher impact on the economy.”

Trade and climate change

While the global economy is recovering from the depths of the crisis earlier this year, momentum is slowing in countries with resurging infection rates, the recovery is uneven and the pandemic is likely to leave deep scars, the International Monetary Fund said in a report for the G20 summit.

Especially vulnerable are poor and highly indebted countries in the developing world, which are “on the precipice of financial ruin and escalating poverty, hunger and untold suffering”, United Nations secretary-general Antonio Guterres said on Friday.

To address this, the G20 will endorse a plan to extend a debt servicing moratorium for developing countries by six months to mid-2021, with a possibility of a further extension, said a draft G20 communique seen by Reuters.

European members of the G20 are likely to push for more.

“More debt relief is needed,” Michel told reporters on Friday.

Debt relief for Africa will be an important theme of the Italian presidency of the G20 in 2021.

Trade and climate change

European nations in the G20 will also seek fresh impetus to the stalled reform of the World Trade Organisation (WTO), hoping to capitalise on the upcoming change of US administration.

“We must also continue to support the global economy and reopen our economies and borders to facilitate the mobility of trade and people,” King Salman said.

Earlier on Saturday, Al Falih, said this year’s crisis had highlighted the importance of multilateral organisations.

“The G20, its essence, is activating multilateralism, and of course this has taken a backseat over the last few years,” Al Falih said.

Outgoing US President Donald Trump favoured bilateral trade deals over working through international bodies.

The change of US leadership also raises hopes of a more concerted effort at G20 level to fight climate change.

Following the example of the European Union, already half of the G20 members, including Japan, China, South Korea and South Africa, plan to become climate- or at least carbon-neutral by 2050 or soon after.

Under Trump, the United States pulled out of the Paris Agreement on fighting climate change, but the decision is likely to be reversed by President-elect Joe Biden.

“We expect, of course, new momentum from the new US administration on this issue, thanks to the President-elect’s declaration that the US would join the Paris Agreement once again,” European Commission President Ursula von der Leyen said.

To help finance the fight again climate change the EU will push for the G20 to agree on common global standards on what constitutes “green” investment.

This would help attract the massive private investment needed because many investment funds are keen to invest in environmentally sustainable projects, but there is no agreed way of selecting them. The EU is already working on such standards to have them in place by 2022.

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