ROME — Leaders of the Group of 20 countries gathering for their first in-person summit since the pandemic took hold will confront a global recovery hampered by a series of stumbling blocks: an energy crunch spurring higher fuel and utility prices, new COVID-19 outbreaks, and logjams in the supply chains that keep the economy humming and goods headed to consumers.
The summit will allow leaders representing 80% of the global economy to talk — and apply peer pressure — on all those issues.
Health and finance officials sat down in Rome on Friday before presidents and prime ministers gather for the G-20 on Saturday and Sunday, but the leaders of major economic players China and Russia won’t be there in person.
Here’s a look at some issues facing G-20 leaders:
THE PANDEMIC RECOVERY: The International Monetary Fund says the top priority for the economic recovery is simple: speed up the vaccination of the world population. Yet big headlines on vaccine cooperation may not be forthcoming at the Rome summit.
Health and finance officials there warned of a two-track recovery, with vaccine and spending gaps slowing poorer countries from bouncing back.
Efforts to speed vaccinations were short $20 billion needed to pursue a goal of 40% of the world vaccinated by year’s end and 70% by the middle of next year, said Kristalina Georgieva, head of the International Monetary Fund.
The increasing divergence between developing and developed countries would be “a major strategic risk for the rest of the world,” French Finance Minister Bruno Le Maire said. The G-20 countries have supported vaccine-sharing through the U.N.-backed COVAX program, which has failed to alleviate dire shortages in poor countries. Donated doses are coming in at a fraction of what is needed, and developed countries are focused on booster shots for their own populations.
GLOBAL TAXES: One major economic deal is already done: The G-20 will likely be a celebration of an agreement on a global minimum corporate tax, aimed at preventing multinational companies from stashing profits in countries where they pay little or no taxes.
All G-20 governments signed on to the deal negotiated among more than 130 countries, and it now faces an ambitious timeline to get approved and enacted through 2023.
U.S. President Joe Biden has tied his domestic agenda to it — creating a global minimum tax can allow the United States to charge higher taxes without the risk of companies shifting their profits to tax havens. U.S. adoption is key because so many multinational companies are headquartered there.
HIGH ENERGY PRICES: The summit offers an opportunity for dialogue on high oil and gas prices because it includes delegations from major energy producers Saudi Arabia and Russia, major consumers in Europe and China, and the U.S., which is both.
Chinese President Xi Jinping and Russian President Vladimir Putin plan to participate remotely.
“Perhaps the most important thing the G-20 could do is to tell those among them that are major energy suppliers that they should think about their future,” said Holger Schmieding, chief economist at Berenberg Bank.
If energy prices are too high in the developed world, it will only speed up the move away from fossil fuels, “which is ultimately, in the long run, bad for the suppliers,” he said.
The White House says Biden intends to engage with other key leaders about energy prices, with oil recently hitting a seven-year high in the U.S. at over $84 per barrel and the international Brent crude benchmark reaching a three-year peak at over $86.
