Dear G20 leaders,
This year’s G20 process has been hampered by the geopolitical situation and in particular the Russian invasion of Ukraine. However, this doesn’t diminish the G20’s responsibility to act, quite to the contrary.
The G20 collectively has the power to solve some of the most pressing global challenges — as you represent the biggest economies, the biggest polluters, the most important donors, and the most important shareholders to international financial institutions and multilateral development banks.
Together, the G20 members represent more than 80% of the world’s gross domestic product (GDP), 75% of international trade, and 60% of the world’s population. Any solutions to and progress in the fight against climate change, hunger, or poverty cannot be imagined without the G20 driving it.
We urge you to live up to the responsibility and ensure that the G20, even in the current crisis situation, remains effective. The G20 legitimacy going forward will depend on the concrete outcomes the G20 can deliver, as a whole or at least by a subset of its members, in particular on issues that have a disproportionate impact on the poorest: climate change, financing for development, and food security.
Here are the key issue areas we need to see the G20 taking urgent action on:
Special Drawing Rights
We urge governments to not only meet, but exceed the $100 billion target agreed last year by the G20, by reallocating at least 30% of their new SDRs (or an equivalent amount in another currency). If all those G20 members who already pledged SDRs would increase it to 30% of their share, we could free another $21.6 billion.
To maximize the development impact of these funds, governments should make use of multilateral development banks and count these SDRs as additional to existing Official Development Assistance (ODA) promises. The G20 should publish a full list of promises already made to date. All governments should swiftly implement the pledges made.
Recommit to Official Development Assistance (ODA)
In light of the multiple converging crises impacting vulnerable populations around the globe, it's crucial that G20 donor countries recommit to the long standing promise of allocating at least 0.7% of gross national income (GNI) to ODA and ensure that the much needed support for Ukraine and its neighboring countries is not at the expense of existing development priorities.
Multilateral Development Bank Reform
The G20 should support the reform suggestions as laid out in the Capital Adequacy Frameworks (CAF) review report and release a roadmap to implement them. This could unlock $500 billion or more in new lending from multilateral development banks (MDBs). Progress should be made by the next G20 finance ministerial in February 2023.
More than 55% of low-income countries are in debt distress or at high risk of it and without urgent action by the G20 we risk facing a worsening debt crisis with more defaults. The G20 should explore how to improve the Common Framework (CF), for instance by including private creditors earlier on, increasing transparency of the current (public and private) debt stock and of the CF process, and ensuring greater predictability for countries seeking treatment.
Delivering on the $100 billion per year promise on climate finance through 2025 is crucial and developed countries should immediately fill the existing $16.7 billion gap. This funding must be new and additional to Official Development Assistance, and prioritize grants over loans.
The G20 donor countries should also deliver on the commitment made at COP26 to double adaptation funding by 2025, adopting roadmaps towards this goal.
Loss and Damage
Building on the Glasgow Dialogues and Global Shield against Climate Risks, the G20 should show leadership and agree to set up a Loss and Damage financing facility under the UNFCCC and the Paris Agreement. This must be resourced with finance in the form of grants, with direct access modalities, to be released at speed and scale to communities affected by climate change and extreme weather events.
Fossil Fuels Phase Out
The G20 should adopt concrete plans to phase out fossil fuel subsidies by 2025 or sooner, and reinvest these funding in clean, just, and sustainable energy systems, and green recoveries. The G20 should also commit to phasing out fossil fuels, including gas, and agree on a full coal phase-out by 2030, as a major step towards net zero.
Despite commitments at the G7 and at the Global Food Security summit, we are still a long way off from achieving the $33 billion that is needed as a matter of urgency to support the 50 million people in 45 countries at risk of starvation.
The G20 must work to fund a multilateral and coordinated response to ensure both emergency response across locations at risk of famine, and long-term investments to prevent future food crises. Governments must also stand firm on keeping markets open and guard against unjustified restrictive measures on food and agriculture exports.
As civic space shrinks in many countries in the world, the G20 should send a signal, recognizing the importance that civic space has, including issues such as participation, transparency, and accountability, and establish a full-fledged working group on Civic Space.
We hope to be able to count on your leadership and look forward to working with your team to discuss our proposals.
Global Citizen and E3G