The inception for a new world order is here. Covid19 crisis the trigger, G20 the medium, and a dominant face of political leaderships the players, this inception is a step in the right direction. This could be a major disruptive change that puts global governance that had been hijacked by bureaucrats of multilateral institutions back in the hands of collective governments. At worst, these global institutions will reform and become more accountable to their principals; at best, a new world order will be born. Above all, it gives G20 that had been imploding from within and had degenerated into a networking junket for heads of governments, Finance Ministers, Governors of Central Banks and a retinue of quaint designations such as Sherpas, a new lease of life, credibility and legitimacy.

On the surface, in the first meeting of G20 finance ministers and Central Bank governors that has occurred without the paraphernalia of officials jet-setting around the world on taxpayers’ monies, the 14-page communique released virtually is as banal, as mundane, and as predictable as any other. The language too is similar to the December 2008 communique, when G20 took charge as the Board of Directors for the global economy. You see reflections of the same words, same expressions – keep trade going, provide help to poor nations, protect jobs – that have been discarded before the next meeting. Within G20 too the focus has been shifting to embrace virtue-signalling as a proxy for economic failures.

From fixing the economy in the Washington Summit in December 2008 summit, the G20 almost immediately began to lose its way. The London Summit in April 2009 started talking about “green and sustainable recovery”. The Pittsburgh Summit in September 2009 brought in climate change. The Seoul Summit in November 2009 introduced “global marine environment protection”. The November 2015 Antalya Summit embedded terrorism even as China continued to support Pakistan’s terror against India at the United Nations. All rhetoric, no action: that had become the G20 construct – a good place to meet leaders of the world’s top 19 economics and EU informally, throw in a few bilateral meetings but little else.

G20 had been captured by the unelected, unaccountable noise-makers. It needed a crisis. And Covid-19 that according to the IMF could be the worst since the Great Depression has provided it. And it is heartening to see governments grab this crisis with both hands and turn it into an opportunity to reform. Reading between the lines, here’s what the communique really says.

WHO will report to G20, not throw its weight on it

Effectively, the G20 has turned the now discredited World Health Organisation (WHO) into a report-writing organisation. It has sought evidence-based information from this China-captured institution to report to the principals behind it. In other words, it has snatched WHO from the hands of China and by the way things are moving, G20 may drag this failed and controversial organisation back on track, as the two paras below show.

We call on the relevant International Organisations and expert bodies and alliances to produce an evidence-based report , under the leadership of the WHO, highlighting the actions necessary and the financing gaps for COVID-19 that need to be filled.

, under the leadership of the WHO, highlighting the actions necessary and the financing gaps for COVID-19 that need to be filled. We commit to review, together with G20 Health Ministers, the forthcoming report by the WHO and relevant organisations, on longer term pandemic preparedness gaps, to support our assessment of the G20 Presidency’s proposed pandemic preparedness global initiative.

Ease banking norms

By bringing in small tweaks, the G20 has eased the increasingly harsh norms imposed by the Bank for International Settlements (BIS) on global commercial banks. This it has done through the mechanism of Financial Stability Board (FSB) and the tool of ‘flexibility’. The two paras below embed flexibility into the first of three pillars of BIS – minimal capital requirements, risk coverage and containing leverage. Which means the pressure on banks to maintain capital adequacy has been eased to tide over the Covid-19 crisis. This flexibility should reduce operational burdens on banks. G20 has also asked FSB to “support our response”. Effectively, the G20 has eased credit flows into economies. This will impact the way credit rating agencies work – they will have to rework their numbers, revisit their ratings and rethink their outlooks.

We commit to follow the FSB’s principles in its COVID-19 report to the G20 to monitor and share information on a timely basis to assess and address financial stability risks from COVID-19; recognize and use the flexibility built into existing financial standards to support our response ; seek opportunities to temporarily reduce operational burdens on firms and authorities ; act consistently with international standards, and not roll back reforms or compromise the underlying objectives of existing international standards; and coordinate on the future timely unwinding of the temporary measures taken.

; seek opportunities to ; act consistently with international standards, and not roll back reforms or compromise the underlying objectives of existing international standards; and coordinate on the future timely unwinding of the temporary measures taken. We ask the FSB to continue supporting international cooperation and coordination on the COVID-19 response through information sharing, assessing vulnerabilities, and coordinating on the response to policy issues, including measures that standard setting bodies and member countries take to provide flexibility within international standards or reduce operational burdens.

Focus on saving lives, demand standardised data

Again, this strikes at the heart of the China-WHO nexus. By demanding standardised and transparent cross-country data on Covid-19 that can be shared with all G20 members and other nations, the communique has not hesitated to venture into harsh territory. China has hidden data on the start and the spread of the Wuhan-based Covid-19 virus; a China-captured WHO has looked away. Even today, China is under watch for not giving clear data on the number and the type of victims – nobody is trusting the data it spews out. The three clauses below should end this manipulation.

We commit to full compliance with the International Health Regulations (IHR 2005) and the continued sharing of timely, transparent and standardised data and information between countries including on health measures and the effectiveness of non-pharmaceutical interventions .

. We will share the latest information and country experiences on COVID-19 containment measures, their implementation and subsequent removal to minimize negative spillover and second wave effects, including the risk of secondary waves of infections .

. To support this, we task International Organisations to support members in developing standardized data, analysis and sharing information on effective measures to restart economies whilst protecting health objectives, avoiding duplication.

Who’s the boss? G20

As the informal Board of Directors for the global economy, the G20 has taken power back from the World Bank Group and IMF. In one para, the G20 has turned the reporting hierarchy on its head. By asking international organisations to work together and “report back regularly to us”, the reporting lines have shifted. While little would change within the internal hierarchies of these multilateral institutions, their heads will have less flexibility and be forced to deliver greater accountability; this will trickle down. As they should have in the first place, as they must. This played out a day earlier, with a joint statement by the World Bank Group (WBG) and IMF: “The WBG and IMF will move quickly to respond to the G20 request for us to support this action [suspend repayment of official bilateral credit] by working closely with these countries.”

We support enhanced policy and operational coordination across all relevant International Organizations (IOs), at multilateral, regional and country levels, to ensure resources get to where they are most needed and in a timely fashion. We ask these IOs, in particular the IMF, World Bank and Regional Development Banks, to continue to work together and report back regularly to us.

Finally, in a footnote, the G20 has pushed back on a proposal by China. Among other things, China had proposed a $500 billion in the form of Special Drawing Rights (SDRs) to which all IMF member countries would contribute such that the money goes to the poorest countries. These countries are all part of China’s BRI (Belt and Road Initiative) trail. Which means, all countries would contribute to the poor countries repaying China’s debt. For countries such as the US, China, Europe, or Japan it would be in their currencies. But for countries such as India, it would have to come through hard-earned dollars. In other words, the rest of the world be paying China’s debt. Not acceptable, said the members.

The G20 International Financial Architecture Working Group also discussed the possibility of an Special Drawing Right (SDR) allocation or of countries that have excess SDRs granting or lending them to countries that need them. There was no consensus on the issue.

But let’s not get too excited. This is only the first step, an inception. How the crisis moves from here will determine the future course of action. China may not relent. Being cash-rich it may deepen its capture further. Multilateral institutions, finding a gap, may not reform. The crisis over, the world may revert to business as usual. And the seeds of a new way of looking at the world order that this communique outlines may fizzle out. True, all that may happen. But the sharpness and unambiguousness with which these changes have been introduced give us hope that the Covid-19 crisis has given the world an opportunity to reset itself and the G20 has taken the first steps. How this inception turns into reality will be a work in progress. The world must stay alert.