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Coordinated Fiscal Stimulus 2.0: What the G20 Can Do to Counter the Global Economic Slowdown

On May 22, at 10:00 a.m., the Valdai Club held a panel discussion titled “Coordinated Fiscal Stimulus 2.0: What the G20 Can Do to Counter the Global Economic Slowdown,” featuring Timur Maksimov, Deputy Minister of Finance of the Russian Federation. The discussion will also be a Global Table of the 2020 Digital Global Solutions Summit, an important stage in the T20 process, which aims to generate recommendations for the Group of Twenty (G20) from the think tank perspective.

The Valdai Club has been part of the T20 process since 2018 (last year’s policy brief by the Club’s experts is available on the G20 Insights website). The video of Valdai’s Global Table will also be available at the Global Solutions Summit website in the Global Tables on International Financial Architecture section. The Global Solutions Summit is held annually in Berlin, but this year it became an online event due to the coronavirus pandemic.

The coronavirus pandemic has become the “black swan”, which has dramatically changed the global political landscape and economy. The forecasts of economic recession made over the past year continue to be revised, becoming even more bleak. The Valdai Club has repeatedly advocated the development of internationally-coordinated procedures and packages of fiscal measures to counter potential crises. Instead of creating ad hoc mechanisms, the Valdai Club has proposed to pre-establish rules for delivering fiscal stimulus. We believe the G20 is the perfect platform to work out such rules.

The first attempt at implementing a fiscal stimulus measure was implemented in the wake of the 2008-2009 financial crisis. While its results are generally viewed positively, there is sizeable potential to further improve on the delivery of stimulus and its impact on global growth. This time around, this coordinated stimulus exercise within the G20 should improve upon the previous effort by focusing more on the composition of fiscal spending, with greater priority accorded to human capital development, most notably health care. Apart from targeting short-term exigencies, the stimulus should also address longer-term vulnerabilities, including the undersupply of healthcare services on a global scale.

Participants will discuss the possible scenarios for the world economy, the possible ways of rolling out coordinated anti-crisis measures and will address the following issues:

  • How should a coordinated fiscal stimulus be delivered?

  • Can permanent anti-crisis mechanisms be developed at the G20 level?

  • How is it possible to amplify the effects of fiscal spending at the national level, with added momentum coming from the regional development banks and other regional institutions, in close cooperation with global organisations such as the World Bank, WTO and the World Health Organisation?

Special guest:

  • Timur Maksimov, Deputy Minister of Finance of the Russian Federation

Speakers:

  • Ekaterina Arapova, Director of the Sanctions Policy Expertise Centre; Head of the Department for Academic Development, at the Institute of International Studies in MGIMO University, Moscow;

  • Hu Angang, Director of the Centre for China Studies at the Chinese Academy of Sciences and Tsinghua University; 

  • Philani Mthembu, Executive Director at the Institute for Global Dialogue in South Africa;

  • Marc Uzan, Executive Director and founder of the Reinventing Bretton Woods Committee.

Moderator:

Working languages: Russian, English