Treasurer Josh Frydenberg has called for the global economy to be put into “controlled hibernation” during the coronavirus emergency, in a virtual meeting of Group of 20 (G20) finance ministers and central bank governors last night.
The meeting saw the economic leaders of the world’s top economies discuss a new plan to address the risk of debt vulnerabilities in low-income countries hit by the pandemic, and deliver financial aid to emerging markets.
Mr Frydenberg said leaders should take quick, strong and co-ordinated action to “minimise the permanent human and economic damage.”
“First, our priority should be putting the global economy into controlled hibernation while quarantine measures are in place,” he said in a statement.
“That is — finance the global health response, maintain financial stability, minimise job losses, keep businesses going, and ensure the basic needs of the global population are met.
“This includes committing to a G20 fiscal support target, to encourage all economies to act urgently, and send a clear signal to citizens that the G20 is doing whatever it takes.”
Australia’s own economic hibernation strategy involves $130-billion worth of wage subsidies to try to keep as many people in jobs as possible, even if businesses close for up to six months.
Mr Frydenberg also said the G20 must lead the long-term global recovery once the health crisis passes, and that all members should unblock global supply chains, especially for vital medical supplies.
Tonight I joined G20 Finance Ministers & Central Bank Governors to discuss the G20's Action Plan and the importance of the IMF in assessing the adequacy of the global financial safety net as we deal with the economic impacts from the coronavirus. pic.twitter.com/9tiisqdSjZ
— Josh Frydenberg (@JoshFrydenberg) March 31, 2020
A joint statement released after the virtual meeting said details of the plan would be fleshed out before the group’s next meeting on April 15.
It said roles for the International Monetary Fund and the World Bank in deploying resources and exploring measures to alleviate a lack of liquidity in emerging markets were discussed.
G20 leaders pledged last week to inject over US$5 trillion ($8.2 trillion) into the global economy to limit job and income losses from the outbreak, while working to ease supply disruptions caused by border closures intended to limit transmission of the virus.
They also committed to fund all necessary measures to stop the virus’s spread and expressed concern about the risks to fragile countries, notably in Africa.
They told their top finance officials to coordinate regularly with each other and with international organisations to develop an action plan in response to the pandemic.
G20 trade ministers agreed on Monday to keep their markets open and ensure the continued flow of vital medical supplies, equipment and other essential goods.
The group has been accused of being slow to respond to the outbreak, which is expected to trigger a global recession as governments impose curfews and shut businesses.
The G20 comprises Australia, Canada, Saudi Arabia, the United States, India, Russia, South Africa, Turkey, Argentina, Brazil, Mexico, France, Germany, Italy, Britain, the European Union, China, Indonesia, Japan and South Korea.
–ABC with wires