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2021: Time for US Leadership on Multilateralism and a Sustainable Recovery

Global Policy  | Wed, Jan 27, 2021

by Kevin P. Gallagher


The year 2021 is year two into the most important decade of the century where drastic reductions in carbon dioxide emissions and inequalities are paramount to the survival of the world’s people and planet earth itself.  

Yet, 2020 saw the biggest economic downturn since the Great Depression, pushed 150 million into extreme poverty.  2020 was also the hottest year on record, triggering forest fires, hurricanes, droughts, and other extreme events that accentuated the economic shock the COVID-19 pandemic brought to the world economy. 

In this context, many emerging market and developing countries start 2021 desperate for liquidity, or in fear of default. Almost all will face a debt overhang that could take many decades to come out from under. Last year, despite being battered by the United States, the G20 took important some steps to stem the worst of these fears, but those steps fell far short of what is needed.  

The United States bears major responsibility for the current global distress and must take a leadership role in solving it. The new US President Joseph R. Biden should join the calls on the G20 by former central bankers, finance ministers, and others to hold an emergency summit to provide liquidity, debt relief, and new financing that ties subsequent recovery efforts to our shared global climate and developing goals. 

Without bold action to prevent and mitigate debt distress across the world, millions more people will be pushed back into extreme poverty, shared goals will be derailed, and there will be an overall drag on economic growth that will imperil the economic and political recovery in the United States and beyond. With bold action, the US can help spur a sustainable global recovery and regain its standing on the world stage. 

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