Chair of the Saudi B20 Energy, Sustainability and Climate Taskforce Mohammad Abunayyan stressed the importance of cooperation among governments, international organizations, civil groups and companies as the only way to overcome the coronavirus pandemic and secure future economic growth.
He said the taskforce was placing the finishing touches to its policy recommendations that cover medium- and long-term needs that are necessary in helping the world recover better and prepare for future crises.
Speaking to Asharq Al-Awsat, Abunayyan said the coronavirus pandemic and its impact on the economy and society was ongoing in destabilizing the business environment. He added that the business society was quick to respond to the pandemic.
Abunayyan is one of the most prominent leaders in the energy sector, with 37 years of experience in the trade and industry sectors. He serves as Chairman of ACWA Power International, Vision Invest, Dussur and several pioneering local and regional firms.
* In light of the current global economic situation, what is the role of B20 in building the economy during the coming period?
- Saudi Arabia’s presidency of the B20 comes at a time like no other in modern history. The world is facing the urgent need to unite the efforts of political leaders and cooperate in the face of the current COVID-19 crisis. As the voice of business to the G20, we believe we are uniquely positioned to identify solutions to ensure business continuity and support society at large.
Early on in the pandemic, we established a COVID-19 initiative to look at lessons learned and best practices from the global business community. Through several consultations, we tapped the expertise of these leaders to deliver actionable and inclusive policy recommendations in a special report to the G20 to jumpstart the global economy. We believe the actions incorporated in this six-point plan will play a critical role in rebuilding the economy back as we move towards the recovery phase of this crisis.
Cooperation and collaboration between governments, international organizations, civil society and businesses is the only way to achieve an effective and timely resolution to this pandemic and ensure future economic growth.
* How will the B20 taskforces strengthen the role of the private sector to achieve global economic growth?
- Our overarching goal at the B20 is straight forward – deliver policy recommendations to the G20 that advance the strength and viability of all businesses – small, medium and large – and the communities and ecosystems which they serve.
Our Taskforces – which cover several issues areas from energy to digitalization to future of work – are finalizing their policy recommendations over the next month. These recommendations address medium and long-term needs that are critical to help the world build back better and prepare for future crises.
We are strongly of the view that only global cooperation, collaboration and consensus between the private sector, governments and civil society can achieve global economic growth. B20 Saudi Arabia’s ambition is for the effort to continue in future presidencies in Italy, India and beyond as a legacy program.
* How will energy companies in general contribute to the sustainability of the global energy sector? and how will they guarantee supply?
- The COVID-19 pandemic has forced us all to deeply consider altering our practices, approaches and attitudes in the short term to ensure a safer and more resilient post-pandemic world. All businesses – including energy companies - must look to transition towards a cleaner, resilient and more digitally enabled future, and make meaningful changes by reducing emissions, investing in lower emissions portfolios and defining net-zero emissions pathways.
Discussions among the membership of our taskforce – executives and leadership from industry-leading companies, international NGOs and multilateral trade organizations – have yielded alignment on the importance of promoting a circular economy and accelerating clean energy transitions. Current production processes are unsustainable, as the global economy today uses the equivalent of 1.7 planets to produce global output and absorb waste. Companies extract more than 60 billion tons of raw materials per year – or 22 kilograms per person per day – to support economic activities.
It is clear these practices must evolve if we are to protect our planet and its industries and workers for the long term.
* What are the biggest challenges facing the private sector?
- When the B20 started its work last year to identify priority issues for the global business community, COVID-19 was not in the picture. COVID-19 and its socio-economic impact continue to make the operating environment for business highly uncertain.
We have all noticed that the business community has been both resilient and agile in responding to this global pandemic. Keeping the safety of their employees and customers paramount, organizations across the world have adjusted their operations and adopted innovative solutions to meet the demands of this new normal to ensure business continuity.
As we look into the lessons learned from the current situation, we all recognize that governments cannot face current and future challenges alone; we all have a stake in collaborative thinking and action. The actions we take today are key to leading us to a more resilient and sustainable economic future for all.
* There have been positive signs in the energy sector recently which point towards an expedited revitalization of the sector. What are your thoughts on that?
- Every sector has faced significant challenges as a result of COVID-19. Of course, it’s encouraging to see signs of the energy sector recovering. Energy remains a critical resource for powering the global economy particularly as businesses gradually reopen.
Going forward and in alignment with our B20 Saudi Arabia priorities, we believe it is important to profile the importance of accelerating the green agenda – which includes renewable energy and more sustainable energy infrastructure and storage. A sustainable recovery plan based on energy sector measures would boost global economic growth by 1.1% per year, save or create 9 million jobs per year, and avoid a rebound in emissions and put them in structural decline. It is the goal of B20 Saudi Arabia to achieve carbon neutrality and strengthen climate resilience of infrastructure that will also contribute to Building Back Better post COVID-19.
* What do SME’s have to do to get through the current crisis? And what is the role of B20?
- MSMEs – which form the backbone of the world economy – are one of the hardest hit by the economic impacts of COVID-19. We must maintain the viability of those millions of small businesses across the world upon which so many workers and families rely as they account for more than 80% of employment in many countries.
More needs to be done to directly support MSMEs to ensure their continuity. As the socio-economic impact continues to unfold, more fiscal and monetary measures might be necessary.
Due to the impact of the pandemic, the B20 has called for the continued support of lending institutions to protect services with a particular focus on the most vulnerable, including MSMEs. Specifically, B20 has called for:
1. Reducing or postponing tax payment. Measures should be taken to ensure availability of trade finance to MSMEs and support ongoing production in critical sectors and keep credit flowing.
2. Agreeing on urgent scaling of social protection for displaced workers. The measures we recommend include paying the wages and income of workers and employers of MSMEs, providing deferrals of rent, credit payments and financial liabilities, and suspending legal restrictions.
3. Accelerating the inclusive build-up of e-commerce capacities, especially in developing countries.
Even before COVID-19, B20 made MSMEs a cross-cutting theme for all its taskforces. This means that all of our policy recommendations must provide solutions to this community to help drive inclusive, resilient and sustainable economic growth.
* What are the steps needed to revitalize the global economy from your perspective?
- In early July the B20 released a special report to the G20 which outlines a six-point plan to address both the health and commercial aspects of our societies. It is also meant to prepare for the recovery phase of the pandemic around the world.
Our recommendations address several objectives: Building health resilience of our citizens, including employees, maintaining financial stability by ensuring open supply chains and reviving key sectors and embracing technology to digitize responsibly and inclusively.
First, we focus on building health resilience. This means accelerating a COVID-19 vaccine development and availability; guaranteeing funding for vaccine R&D and manufacturing; and expediting regulatory approvals.
Secondly, we believe the G20 must work to safeguard human capital, which means protecting employees’ health as well as their jobs in order to minimize unemployment. Further, we want to allow for free flow of labor across borders, which has been a challenge for global economies.
Third, prevent financial instability. We believe G20 should strengthen the global coordination of policy responses and particularly all unintended negative economic and financial spill-overs among governments, public agencies, and the multilateral institutions.
Fourth, to unclog global supply chains is absolutely critical. We must allow for the free flow of goods, ensuring servicing of infrastructure, the safety of workers and clearance of goods at customs.
Fifth, revive productive sectors, which means considering fiscal stimulus based on the principles of cooperation and ensuring investments in sustainable sectors and projects. It’s also critical to ensure energy market stability and revitalize the travel and tourism sector which has been hit particularly hard by this pandemic.
Lastly, digitalize responsibly and inclusively. The G20 must accelerate digital transformation. As we’ve all seen, the world had to quickly adopt digital tools but we still have a digital divide that must be addressed.
To arrive at these recommendations, we consulted with more than 750 global business leaders – from micro, small and medium sized enterprises to large multinational corporations. We have shared these recommendations with the G20 for consideration and we trust they will adopt them when they meet this November in Saudi Arabia.