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G7 Leaders’ Summit 2022 was held recently in Germany, a little over a year later after the last such meetings were held in the United Kingdom (UK). Given the severity of the pandemic back then, vaccine equity dominated the agenda along with related issues of climate change crisis and rising supply chain bottlenecks.

There was focus on improving the COVAX initiative and with regard to provision of Covid vaccines the communique for June 2021 meetings indicated: ‘Total G7 commitments since the start of the pandemic provide for a total of over two billion vaccine doses, with the commitments since we last met in February 2021, including here in Carbis Bay, providing for one billion doses over the next year.’

It is quite strange that while the commitment by G7 as clearly indicated in its communique (see above) from meetings last year in the UK was to provide one billion doses in the next year, and overall around 2 billion doses, it provided significantly lesser amounts as indicated by communique for 2022 G7 meetings that ‘We have successfully exceeded last year’s commitment of sharing 870 million vaccine doses; in fact, we have made available a total of over 1.175 billion vaccine doses’, but still made it a moment of achievement!

In fact, the recently released figures show quite a dismal performance of G7 countries with regard to providing pledged number of vaccines with serious consequences for life as pointed out in June 27 published article ‘G7 vaccines failures contribute to 600,000 preventable deaths’ whereby it indicated: ‘Less than half (49 percent) of the 2.1 billion Covid vaccine donations promised to poorer countries by G7 countries have been delivered, according to new figures published today by Oxfam and the People’s Vaccine Alliance.

On the eve of this year’s G7 Summit, taking place in the German Alps, a new analysis shows that had the missing donated doses been shared in 2021, it could have been enough to save almost 600,000 lives in low and middle income countries, the equivalent of one every minute.’

Moreover, the recent denial of World Trade Organization (WTO) to allow for waiver of intellectual property rights (IPRs) on Covid vaccine, in its 12th Ministerial Conference, sent a big blow to increasing the rate of vaccination globally, yet the G7 Summit 2022 did not comment on this at all insofar as the communique is concerned.

The extent of this disappointment over the decision could be understood, for instance, from a recently released article ‘Why a new international vaccine deal is being called a “devastating global failure”’ which argued, among other things, that ‘…despite a thumbs-up from more than 100 countries, a two-year effort to accomplish just that withered in the early hours Friday in Geneva, as the World Trade Organization released a new agreement that advocates say is a watered-down version of the original plan. … “It’s a mix of extreme disappointment and a touch of anger, and then some real embarrassment on behalf of the wealthier countries at the WTO, who really rammed this one through,” said Ronald Labonté, a professor and distinguished research chair in globalization and health equity at the University of Ottawa.’

To utter shock with regard to steps towards greater and much equitable vaccination outcomes, on the contrary, the Summit lauded the performance of the Ministerial Conference, whereby the communique on the Summit stated: ‘To this end, we applaud the outcome of the 12th WTO Ministerial Conference in response to major global issues such as fisheries subsidies, the emerging food security crisis and equitable access to vaccines and the commitment to work to towards necessary reform of the WTO.’

The most pressing issue challenging the very existence of life on Earth as we know it, the climate change crisis was dealt with perhaps least consideration, given the tight timeline with regard to global warming target of net-zero carbon emissions.

With regard to climate finance, no detailed timelines were provided on the annual provision of $100 billion to developing countries, whereby it was stated in the recently released communique: ‘We renew our strong commitment and will intensify our efforts to delivering on the collective USD 100 billion climate finance mobilisation goal as soon as possible and through to 2025.’ Provision of pledged climate finance by developed countries should be fast-tracked in view of the fact that very strong inflationary pressures globally — like higher costs of imported goods, overall higher domestic prices due to increasing cost-push inflation, and steeper cost of capital — are significantly taking away fiscal space from developing countries to make needed levels of climate-related expenditures.

Moreover, in the wake of global energy crisis — a supply-chain crisis, accentuated by war in Ukraine — G7 showed far less commitment than needed to reduce investments into fossil fuel industry, instead of pushing harder to cover the energy gap with working towards better decisions with regard to improving oil supplies, and with greater focus on renewable options.

A recent Financial Times (FT) published article ‘G7 accused of “backsliding” on climate goals over energy security fears’ indicated in this regard: ‘G7 leaders have been accused of “backsliding” on climate goals after they watered down pledges to halt fossil fuel investment because of fears over energy security. …In its final communique from this week’s summit, the G7 said investment in liquefied natural gas was a “necessary response to the current crisis”.

It added: “In these exceptional circumstances, publicly-supported investment in the gas sector can be appropriate as a temporary response.” …Some countries, including Germany, have already said they will restart mothballed coal power stations in an attempt to keep the lights and heating on this winter. Climate groups criticised the G7 for failing to deliver new climate finance pledges, and for its renewed focus on gas. “We cannot afford this kind of backsliding. There are lives on the line,” said Laurie van der Burg, campaigner at Oil Change International, a US-based campaign group.’

Given the urgent need to move away from fossil fuel usage as pointed out by recent Intergovernmental Panel on Climate Change (IPCC) reports, not to mention a very difficult heatwave and flood situation in South Asia, that shows quite clear signs of the workings of fast unfolding climate change, the response of G7 is indeed worrisome, to say the least.

Moreover, just a few days before the G7 Summit, CEOs of major global companies in an open letter had asked to increase the effort with regard to climate change, as pointed out by a June 17 published FT article ‘Global CEOs urge G7 leaders to step up climate action’ in the following words ‘In an open letter ahead of the three-day gathering that begins on Sunday in the Bavarian resort of Schloss Elmau, more than a dozen heads of large corporations including Bank of America and Shell pleaded for ambitious government climate policies “that offer the private sector clarity and stability”.’

Having said that, the dismay over the allowances by G7 with regard to investing in fossil fuel industry was indicated for instance in a June 28 press release titled ‘CSOs condemn G7 leaders for caving in to gas industry and weakening pledge to end international public finance for fossil fuels’ whereby ‘experts at Oil Change International and partner organisations’ registered their disappointment.

In the press release it was indicated, for instance: ‘Today, German Chancellor Olaf Scholz and other G7 leaders watered down a commitment made in May by their energy, climate and environment ministers to end international public finance for fossil fuels by the end of this year, drawing a swift rebuke from climate and development campaigners. … Today’s G7 leaders’ statement adds new loopholes to the commitment and says that “with a view to accelerating the phase out of our dependency on Russian energy … investment in [LNG] is necessary” and that “publicly supported investment in the gas sector can be appropriate as a temporary response”.’

Given high inflation, which is adding to likelihood of stagflationary and recessionary headwinds on one hand, and the rising cost of capital and debt serving, in the wake of global supply shock and which has been accentuated by the war in Ukraine by Russia on the other, it was hoped that a meaningful, concrete plan of action would be brought forward by the G7 countries. So, in addition to a disappointing attitude on vaccine availability and climate change, there was also a very lukewarm response with regard to much-needed debt moratorium/relief for developing countries.

Instead, in addition to not inviting China – a major global economic and political power, and a significant lender to many developing countries, not to mention its significant stakes/role in the fight against climate change and Covid vaccine provision to the G7 summit in Germany, as was the case in the 2021 G7 summit in UK, some very general-natured and rather insignificant focus was given by G7 as pointed out, for instance, by the communique as: ‘We underscore our commitment to successfully implementing the G20 Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative. We encourage further efforts to ensure an accelerated implementation of the G20 Common Framework and increased predictability.

We call on all G20 partners to join us in this regard. We urge all relevant creditors, including non-Paris Club countries such as China, with large outstanding claims on low-income countries facing debt sustainability challenges, and private creditors in line with the comparability of treatment principle and mutual accountability to contribute constructively to the necessary debt treatments as requested.’

Moreover, there was no mention of the Bill pending in the US Congress with regard to the release of enhanced SDR allocation. In addition, there was no concrete, detailed action plan indicated with regard to how SDR relocation (from last August) from rich, advanced countries to developing countries could be fast-tracked, and how the size of the envelope with regard to the overall financing amounts needed by developing countries in the wake of the pandemic could be fattened.

Ironically, however, only a general-natured focus, and insignificant amounts overall in terms of financing – when according to UNCTAD $2-$3 trillion by December (and now it is six months into the next year) were needed by developing countries in financing in the wake of the pandemic — could be seen mentioned in the communique, as could be seen as follows: ‘With the support of our partners we have made significant progress towards and are approaching the targets agreed last year by the G7 and G20 to complement the 2021 general SDR allocation for countries most in need, especially in Africa, including through voluntarily channelling SDRs or budget loans, to reach a total global ambition of USD 100 billion. … We call on MDBs to urgently assess how to step up their policy and financial support, and maximise the pace of their disbursement, including of USD 170 billion committed by the World Bank Group to respond to the current crisis…’

Copyright Business Recorder, 2022

Dr Omer Javed

The writer holds a PhD in Economics from the University of Barcelona. He previously worked at the International Monetary Fund. He tweets @omerjaved7

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