World leaders are turning green

The G20 world leaders will hold a virtual conference under the chairmanship of Saudi Arabia on 21-22 November. The host country has set them a presidency agenda spanning three main themes.

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  1. Charles Stanley

Saudi Arabia has invited G20 leaders to discuss "empowering people" around the issues of how to improve the lot of women and young people and tackle inequalities. The agenda will then move on to the green revolution, discussing what more they can do " to safeguard the planet." They end with the digital transformation, exploring innovation under the title "Shaping new frontiers".

Much of this agenda is similar to previous summits – and familiar to readers of these blogs. It includes difficult-to-resolve issues such as how to tax digital companies more. The presidency looks forward to finding a consensus on "the tax challenges arising from the digital" developments.

It will ask how far they can go in allowing "private currencies" amidst a fintech discussion hedged with fears of fraud, breaches of data security and the need for a level playing field in finance. Most states and central banks have more interest in curbing or nationalising new digital currency. They will want to clamp down further on crime, pursue smart cities with new forms of urban mobility and seek more peaceful collaboration in space.

Saudi has put a tilt to the green and decarbonising agenda in favour of planting more forests and seeking tougher action against land degradation and deforestation. It wants to discuss food security, water improvements and marine preservation. It also includes plenty of space to discuss decarbonisation which the others will wish to pursue, and accept the world is moving to cleaner energy and to a major reduction in greenhouse gases.

The section on employment and people recognises, in general terms, the threat to jobs from the green and digital revolutions – and wants to harness opportunities for more people from the growth and productivity improvements driven by computerisation. Great emphasis is placed on helping women, reflecting the moderniser agenda in Saudi Arabia and the recognition of global interest in its progress. It suggests work on financial inclusion for women and young people, better education and personal healthcare systems and sustainable development that leaves no one behind, without getting into specifics.

This summit is ill-timed

A G20 without a fully engaged US is difficult. It meets with President Trump still not recognising the win so far declared for Joe Biden. President Trump remains unable to prove his contention that thousands of votes were switched or created in a few swing states to invalidate the counts so far declared.

His people reckon that in just a few counties in a few swing states unauthorised access through poor security systems allowed data manipulation and explains a night time surge in Biden votes. The Democrats say this must have been postal votes coming in which were heavily pro their candidate. The Republicans point to a stolen laptop in Pennsylvania that could have been used for this purpose which the authorities say was closed down when stolen before the election. The US is left in limbo, as the two main parties battle over the results and fail so far to reach an agreed view on who won. This, in turn, impedes progress in getting on with proper preparations for the next four-year presidency.

 

It is also notable that the general G20 Presidency introductory agenda does not mention Covid-19, though the duration, response and recovery from the pandemic remains the prime preoccupation of the leaders meeting at this event. It will doubtless be discussed. Mr Biden will wish to make taking tougher measures against the virus central to his first days in office, assuming as markets do that the court cases and recounts continue to go his way.

It is likely the summit will not resolve the digital tax question with a detailed globally agreed proposal. It is highly likely the summit will conjure language about a green-based recovery and pledges for more sustainable development – and will also wish to express enthusiasm for policies which promote fairer treatment for women and young people. A virtual meeting does not present the same opportunities for informal bilateral meetings in the margins – and does not present the press with opportunities to spy on private conversations that can now occur by phone and video outside normal view.  

Meanwhile, markets are having second thoughts about how soon there can be relaxation of social and business restrictions in an age of vaccines – recognising that case numbers and deaths are still poor on both sides of the Atlantic.

Controls are being toughened in parts of the US, though the worst country figures in Europe may now be on the way down again after a period of greater restriction. In the UK, British Land's figures start to reveal the damage to property values brought on by the pandemic – with more grief to come, as people settle back into home working again and trains run with many empty seats.

More retailers in the UK seek protection from creditors as a way of slashing rents or surrendering shops, despite very good retail sales figures overall. Around the world, Treasuries are starting to reveal the depths of the budget deficits they are plumbing whilst markets cry out for more stimulus. It is going to be a difficult winter.

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