Yellen urges G20 to strengthen cooperation to contain pandemic, boost recovery

U.S. Federal Reserve Chair Janet Yellen speaks during a news conference in Washington D.C., the United States, on Dec. 13, 2017. (Xinhua/Yin Bogu)

WASHINGTON, Feb. 25 (Xinhua) -- U.S. Treasury Secretary Janet Yellen on Thursday urged finance ministers of the Group of 20 (G20) to strengthen cooperation to contain the COVID-19 pandemic and boost global recovery.

"For more than a year the global community has faced a historic challenge from the dual health and economic crises caused by the pandemic," Yellen said in a letter to her G20 colleagues, one day ahead of a videoconference of G20 finance ministers and central bank governors.

"No one nation alone can declare victory over these crises. Indeed, our cooperation has never mattered more. This is a moment made for action and for multilateralism," Yellen said, adding G20's first task must be stopping the virus.

"Containing the pandemic across the globe is paramount to a robust economic recovery," she said, urging G20 economies to increase their support for global vaccination programs.

"A rapid and truly global vaccination program is the strongest stimulus we can provide to the global economy," said the treasury secretary.

Yellen also urged G20 economies to continue to take significant fiscal and financial policy actions and avoid withdrawing support too early. "If there was ever a time to go big, this is the moment," she said.

Yellen raised concerns about low-income countries in particular, warning that "we risk a dangerous and permanent divergence in the global economy" without further international action to support low-income countries.

An allocation of new Special Drawing Rights (SDRs) at the International Monetary Fund (IMF) could enhance liquidity for low-income countries to facilitate their much-needed health and economic recovery efforts, she noted.

"We would also strongly encourage G20 members to channel excess SDRs in support of recovery efforts in low-income countries, alongside continued bilateral financing. We look forward to discussing potential modalities for deploying SDRs," Yellen said.

Yellen also called for better global cooperation to address climate change, as the U.S. Treasury Department will co-chair the relaunched G20 sustainable finance group.

"The G20 was created out of the need for international cooperation in the face of a deep, extraordinary economic crisis. We have come together to face great challenges in the past. We must do so again," she said.

Yellen's letter came after IMF Managing Director Kristalina Georgieva on Wednesday urged policymakers to take strong policy actions to prevent the dangerous divergence between and within countries when climbing out of the pandemic.

"Most of the world is facing a slow rollout of vaccines even as new virus mutations are spreading -- and the prospects for recovery are diverging dangerously across countries and regions," Georgieva said in a blog.