Though many would say the idea is obvious, global cooperation is critical as the world tries to manage multiple and diverse threats to people, the environment, and the economy.
The Brookings Institution, the century-old American think tank, says cooperation should be a top priority for preserving the world economy amidst an onslaught of shocks.
First, the global community must sustain efforts to vaccinate as many people as possible against COVID-19. If countries lag behind others, the world remains at risk for potentially more dangerous and drug-resistant variants to form and spread, writes Brahima Sangafowa Coulibaly, Vice President and Director of Global Economy and Development.
Second, no one country can beat the climate crisis alone. “Notwithstanding some progress over the past decades, collective action to address the looming climate crisis has fallen significantly short, and there is growing consensus that the next years present a critical last-chance window of opportunity to ramp it up at all levels,” Coulibaly says.
Next, coordination among countries is needed to manage shipping logistics that are snagging global supply chains. As ease of transport is restored, shortages and pricing pressures will decrease.
Also, the G20 should reinstate the Debt Service Suspension Initiative (DSSI). “The issue of holdout creditors has always been a thorny one in debt restructurings. With strong support from its major shareholders, the IMF has the option to lend into arrears to the requesting countries, which will incentivize recalcitrant creditors to compromise,” Coulibaly writes.
Finally, the global governance system should be overhauled. A proposal calling for the G20 to set up a Global Liquidity Insurance Mechanism that will “institutionalize and broaden access to short-term foreign exchange liquidity” should be considered, says Coulibaly.
As the world becomes more interconnected, the more the shocks to it will be widespread. The measures the Brookings Institution calls for require a “radical reimagination of the multilateral system” that will enhance cooperation among nations. Strong global leadership is necessary for such coordination and cooperation to take place.