Russia Proposes Lifting Global Sanctions And Creating “Green Trade Corridors” During Covid-19
Speaking – via teleconference – to the leaders of the G-20 group of nations last week, Russian President Vladimir Putin has urged the creation of ‘green corridors’ to transport essential goods and technologies without sanctions as the world continues to battle the Covid-19 pandemic.
The G-20, which includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States and European Union is currently chaired by Salman bin Abdulaziz Al Sau of Saudi Arabia. Spain is a permanent invitee. In addition, each year, the G20’s guests include the Chair of ASEAN, (currently Brunei) the chair of the African Union, (South Africa) and a representative of the New Partnership for Africa’s Development, (Chad) and a country (sometimes more than one) invited by the presidency, usually from its own region.
Representatives include, at the leaders’ summits, the leaders of 19 countries and of the European Union, and, at the ministerial-level meetings, the finance ministers and central bank governors of 19 countries and of the European Union.
The suggestion of a teleconference-style summit was first put forward by Indian Prime Minister Narendra Modi and other members were quick to support the idea.
Russia’s President Putin said a common plan was needed to support the global economy. Right now, he pointed out, many countries are taking a major hit amid the coronavirus crisis.
The Russian leader said joint research between all G20 countries would quicken the process of finding a successful vaccine for the novel coronavirus, stating “It is important for the period of crisis to create the so-called green corridors, free from trade wars and sanctions for the mutual supply of medicines, food, equipment and technology.”
He also said the main risk of the pandemic would be long-term unemployment and estimated that unemployment globally will exceed 2009 levels “under any scenario.”
G20 leaders are meeting for the virtual crisis call eight months ahead of the summit scheduled to take place in Riyadh in November, in an effort to agree a “coordinated set of policies” to alleviate the impact of the Covid-19 crisis and “safeguard the global economy.”
In a joint statement on Thursday, the leaders said they were “gravely concerned” about the risks posed by the crisis — particularly to developing nations and the least-developed countries in Africa, as well as small island states. They also noted that refugees and other displaced persons faced “particular risk.”
In addition to proposing a temporary lift on global trade sanctions, Putin stated that the “G20 countries need a common plan of action to stabilize the situation, support economies and restore confidence in world markets. Global international organizations do not have a mechanism for automatic stabilization in the event of a crisis, so it is necessary to reorganize them efficiently and as soon as possible. It is necessary to ensure access to financing for countries that are hit by the pandemic and experiencing resource shortages.”
For this purpose he proposed to create a special fund under the auspices of the International Monetary Fund (IMF), financed primarily by the central banks, which are issuers of currencies included in the IMF basket.
Then the right may be granted to any IMF member to borrow from this fund in proportion to its share in the world economy at a zero rate for the long term, Putin said.
Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at firstname.lastname@example.org for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.