The Italian G20 Presidency officially started on 1st December 2020. While many issues were addressed at G20 level, involving several ministries and national institutions, the Finance Track proved to be, once again the backbone of the G20 Presidency.
Over the course of the year, Finance Track members – at various levels – met regularly to help the economy navigate through the crisis and sustain the recovery. Italy was bold enough to look beyond the crisis, steering the debate around the need to restore economic growth by boosting productivity and guiding the transformation towards greener, more digital and inclusive societies. This required a new approach based on a renewed multilateralism.
This new cooperation was instrumental to reach consensus on treating health as a global common and consequently strengthening the global pandemic preparedness. Such a spirit helped boosting the supply of vaccines and medical countermeasures and brought to the establishment of a Joint Finance-Health Task Force to foster the dialogue between Health and Finance Ministries.
Aware of the fiscal challenges posed by an increasingly digitalised economy and an always faster digital innovation, under the leadership of the Italian Presidency, the G20 has achieved a historic agreement to address the tax challenges arising from the digitalisation and the globalisation of the economy, and reform the international tax system.
In 2021, G20 members strongly supported vulnerable countries facing the pandemic, promoting a package of initiatives to address the medium-term financing needs. The Debt Service Suspension Initiative (DSSI) granted USD 12.7 bn of total debt service deferred, benefitting 50 countries. The Common Framework for Debt Treatment beyond the DSSI, reached an historic milestone with the formation of the first Creditor Committees for Chad and Ethiopia, while data transparency was strengthened. The G20 played a crucial role in making the new Special Drawing Rights (SDR) general allocation a reality: the largest allocation in IMF’s history, equivalent of USD 650 billion in additional reserves globally, of which over 275 billion to Emerging Markets and Developing Economies. The G20 and guest countries have already pledged close to USD 45 billion from their SDR allocation towards vulnerable countries, as a step towards a total global ambition of USD 100 billion of voluntary contributions.
A great success of the Italian G20 Presidency stems from its role in changing the narrative around climate change. The G20 recognized climate change as a global challenge that must be fought collectively. For the first time, G20 members agreed to coordinate the efforts to protect the planet and promote the transition towards greener, more prosperous and inclusive economies and societies. This includes investments in sustainable infrastructure and innovative technologies and, as well as a wide range of tools to support clean energy transitions, including the use of carbon pricing mechanisms and incentives. In addition, the G20 endorsed the G20 Sustainable Finance Roadmap, prepared by the Sustainable Finance Working Group, which will inform the broader G20 agenda on climate and sustainability for years to come.
The COVID-19 crisis has also shown how reliable and agile infrastructure systems are critical to absorb unexpected external shocks and deliver quality services to the entire population. To this end, the Italian G20 Presidency advanced on an ambitious infrastructure agenda, focussing on strengthening resilience and maintenance of current infrastructure systems and promoting digital, sustainable and inclusive future projects.
The Italian G20 Presidency was also particularly successful from a financial stability perspective. The implementation of the G20 Roadmap for enhancing cross-border payments set ambitious but achievable global targets for making cross-border payment services faster, cheaper, more transparent, and more inclusive, while maintaining their safety and security. As regards financial inclusion, the Global Partnership for Financial Inclusion (GPFI) – co-chaired by Italy and Russia – has delivered a widely appreciated Menu of Policy Options for digital financial literacy and financial consumer and micro, small and medium-sized enterprises (MSME) protection.
Looking back at the beginning of the G20 Presidency no one could have imagined that all these results could be achieved in one year, but the Leaders’ Declaration and all the Finance Track’s Communiqués are a tangible proof of the great work the G20 brought to completion this year. We do hope that the legacy of the Italian G20 Presidency will stay strong in the years to come.