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Govt COVID-19 regulations shouldn't become permanent: B20

Jul '20
Pic: Shutterstock
Pic: Shutterstock
The G20’s official business voice Business Twenty (B20) recently warned against travel and trade restrictions by governments becoming permanent after the pandemic ends. In a special report, the B20 urged governments to reduce export restrictions on pharmaceutical products, ramp up export credit and end selective biases towards movement of people across borders.

B20 is currently chaired by Saudi Arabia. The Fifteenth G20 Summit is still set to be held in Riyadh on November 21-22.

The report said the move to adopt strict policies, keeping in mind national needs, may backfire if not coordinated properly. The B20 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 are increasingly encroaching 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.

Calling for increasing multilateral lending to developing countries (both to middle- and low-income economies), the B20 said this was needed to ensure risk mitigation and improve debt sustainability in the medium term. It suggested that coordinated intervention may be needed if there is further appreciation of the US dollar, which is impacting developing and low-income countries.

On global trade, the body pushed for reducing the capital treatment for micro, small and medium industries’ (MSME) exposures for lending to a risk weight between 75 and 85 per cent in line with the Basel III 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 World Trade Organization (WTO) Trade Facilitation agreements.

The body 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. It also batted for nations renewing the current moratorium on Customs duties on electronic transmissions enforced by the World Trade Organisation, something India is opposed to.

Fibre2Fashion News Desk (DS)

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July 2020

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