Posted Nov 16, 2022 2:56 PMUpdated on Nov 16, 2022 at 2:57 PM
While the war in Ukraine monopolized much of the energy of the G20 leaders, they nonetheless reiterated their key commitments on a number of issues.
Worried about the consequences of the Ukrainian conflict on world food security, the leaders will take “new measures” to deal with “the soaring prices and the shortage of basic food products and fertilizers”. Turkish President Recep Tayyip Erdogan said on Wednesday he was “convinced” that the agreement on Ukrainian grain exports of which he is one of the craftsmen would be renewed “without interruption”. The deal was due to end on November 19. “We will continue our efforts to extend this agreement for one year,” he said.
Discussions will also be started soon on the delivery of Russian fertilizers in order to ensure the next harvests, in particular in the countries of the South. If the economic sanctions that hit Russia save fertilizer and cereals, the fear of accidentally crossing a red line and finding yourself on the wrong side of the law paralyzes transporters and causes insurance premiums to explode. Last Friday, the United Nations nevertheless succeeded in unblocking the situation for a shipment of 20,000 tons which must leave the Dutch port of Rotterdam in the coming days for Malawi, under the aegis of the World Food Programme.
Watch! Indonesian President symbolically hands over #G20 Presidency to Prime Minister @narendramodi
India🇮🇳 will formally assume G20 Presidency from 1st December this year.#G20 #G20India #G20Indonesia pic.twitter.com/CyIv97kwby
— G20 India (@G20_India) November 16, 2022
The G20 also indicated that it will continue “to strengthen the Agricultural Market Information System (AMIS) as an early warning tool to improve transparency in food and fertilizer markets”.
Limit warming to 1.5 degrees
On the climate side, as COP 27 unfolds in Egypt, G20 leaders are still sticking to the Paris Agreement target of limiting global warming to 1.5 degrees by 2030. In order to reduce their greenhouse gas emissions, the leaders intend to accelerate their “transition towards low-emission energy systems” in particular by phasing out coal-fired power plants.
The promise made in 2009 at the Pittsburgh summit to abandon fossil fuel subsidies is renewed. “We still have to wait until the end of COP 27 to assess their climate commitments. The G20 is, however, sending a positive signal with a new, more ambitious target for climate finance, but their inability to deliver on the $100 billion already promised remains very worrying,” commented Maé Kurkjian, from the NGO ONE.
In addition, the G20 undertakes to do more to limit the loss of biodiversity and even reverse the trend by 2030. And in accordance with the United Nations resolution for the environment, the G20 supports the development of an international legally binding instrument relating to plastic pollution, particularly in the marine environment, with the objective of completing this work by the end of 2024.
Debt worries
Faced with the risk of over-indebtedness in emerging and developing countries, the summit did not allow a major breakthrough. The Heads of State welcomed the commitments to lend back to poor countries up to 81.6 billion dollars of the SDRs of rich countries held in the International Monetary Fund. The objective of 100 billion promised at the G20 in Rome last year has not yet been reached.
Likewise, they undertake to “intensify” efforts to restructure debts through the Common Framework finalized in November 2020. For the time being, only Chad has reached an agreement with its creditors while the discussions are continuing with Zambia. An agreement is expected by early 2023.
Nevertheless, the G20 is alarmed by the “worsening of the situation” in other developing countries. “A multilateral consultation involving all bilateral public and private donors to act quickly to meet requests for debt treatment could help to remedy this situation”, simply indicates the G20.
The G20 summit is just a confirmatory summit and more progress needs to be made.
During his final press conference, “Emmanuel Macron himself recognized that the G20 summit is only a confirmation summit and that more progress must be made, in particular to come to the aid of the poorest countries and most vulnerable to climate change”, observes Friederike Roder, vice-president of the NGO Global Advocacy. “As a result, he is announcing a summit for a new finance compact in June. We have 7 months left to finally move forward” on this “vital question for so many countries”, she judges.
Implementing the OECD Tax Agreement
As for the reform of the international taxation of multinationals, it is following its course. The G20 leaders said they were “committed to rapidly implementing” the two pillars of the reform. The G20 asks the OECD to finalize pillar 1 concerning the new key for distributing the rights to tax the excess profits of multinationals linked to their digital activities, “by signing the multilateral convention during the first half of 2023”.
Similarly, the G20 intends to complete negotiations on the Pillar 2 tax liability rule, which consists of establishing a minimum tax rate of 15% worldwide. But, for now, neither the European Union nor the United States have yet taken the last step.
