Apart from health problems, the main global issue is to ensure sustainable economic recovery. Strengthening the role of multilateral institutions, such as the IMF, World Bank and WTO, is a fundamental step.
By
A PRASETYANTOKO
·5 minutes read
KOMPAS/FAJAR RAMADHAN
A Prasetyantoko.
"Without unity, there is no peace, only bitterness and fury," Joe Biden called for the unity of the people of the United States during his inauguration as the 46th President of the US, Wednesday night (20/1/2021). In its Saturday (23/1) edition, The Economist magazine likened Biden\'s speech with Abraham Lincoln\'s inaugural address as the 16th President of the US in 1865 at the end of the Civil war era.
At least 25,000 National Guard troops were on standby in Washington DC, safeguarding the inauguration of Joe Biden and Kamala Harris. The number of troops deployed exceeded those deployed in Afghanistan and Iraq. This situation illustrated that Biden and Harris had inherited complex domestic problems nonexistent since the 1861 Civil War.
Amid this domestic complexity, various global problems also await the real policies of the new government. At home Biden has to fight for the reunification of a divided US public, while on the international scene, his main agenda is to restore the multilateralism regime that had been torn apart by Donald Trump. The principle of "American First" must be revised immediately so that the world will not be further divided along with the strengthening of the nationalist-populist movement in many parts of the world.
Multilateralism
Jayathi Gosh, an economist and activist from India, in his article on the Project Syndicate, suggests four policies that Biden can take immediately to restore global order that will have a real impact on the world\'s population. These policies will not require Senate approval so they can be implemented immediately.
First, allowing the World Trade Organization (WTO) to temporarily exempt the obligation to pay for intellectual property rights for the use of various drugs and medical equipment in coping with the Covid-19 pandemic. This proposal was submitted by India and South Africa to ensure access to health care, especially for poor countries. This proposal could not be implemented because it was rejected by the US during the Trump administration. Biden needs to immediately give a positive response to this proposal as a step to accelerate the resolution of the global health crisis.
Second, allowing the International Monetary Fund (IMF) to issue additional special drawing rights (SDRs) for all member countries. SDRs are a kind of international medium of exchange in the form of assets guaranteed to the IMF. In a difficult situation like today, the additional SDRs allocation of member countries will increase the IMF\'s ability to assist its members, especially small countries that are experiencing funding difficulties in coping with the health crisis and economic recession simultaneously.
AFP/MANDEL NGAN
US President Joe Biden and First Lady Jill Biden listen to the US National Anthem during the virtual Presidential Inaugural Prayer Service hosted by the Washington National Cathedral, in the State Dining Room of the White House in Washington, DC, on January 21, 2021.
Trump\'s US rejected the additional SDRs allocation worth $500 billion in April. India also opposed this policy. However, if Biden changes policy, India will not survive because it only has a small vote. This agreement is important so that the IMF will be able to assist the short-term funding needs of member countries experiencing liquidity problems.
Third, collaborating with other countries to implement an effective global tax system for multinational companies. Gosh, in his capacity as an independent commissioner for the Reform of International Corporation Taxation , suggested the imposition of a global tax of 25 percent on multinational companies.
France has imposed taxes on multinational companies, such as Google, Facebook and Apple. However, Trump rejected the imposition of this tax.
Fourth, bringing back the US to the Paris Agreement on climate change. In 2017, Trump opposed the deal and accused the Paris Agreement of being an unfair economic burden. Biden needs to correct this policy immediately.
Gosh\'s four proposals are very relevant in the context of restoring multilateralism and the creation of a rules-based global order. The Covid-19 pandemic requires more intensive cooperation at the global level. The protectionist spirit that puts forward domestic interests, as advocated by Trump, is completely irrelevant and complicates the resolution of this global recession.
Coordination in vaccine production and distribution is one of the most crucial global issues. Restoring the role of the US in the WHO will bring a positive impact for the acceleration of the resolution of the health crisis. The US also needs to play an important role in the global movement to provide equal access to vaccines, as initiated by the WHO in Covax.
Maite Otegi, 59 years old, is vaccinated with the Pfizer vaccine against coronavirus inside a mobile health unit in the small Pyrenees village of Oronoz-Mugaire, around 45 km (27 miles) from Pamplona, northern Spain, Tuesday, Jan. 19. 2021.
Apart from health problems, the main global issue is to ensure sustainable economic recovery. Strengthening the role of multilateral institutions, such as the IMF, World Bank and WTO, is a fundamental step. In addition, adopting an environmentally friendly development approach is also unavoidable.
The Chinese government targets to be carbon-free by 2060, while Japan aims for zero emissions by 2050. In that period, all cars must use batteries and the industry no longer uses fossil fuels.
How is it impacting Indonesia? First, the Biden-Harris government guarantees the return to a better global order. Although the future is still shrouded in uncertainty, turmoil can be better managed through coordination that respects common rules. Second, Indonesia needs to take a more progressive role in this changing global chain.
Changes in the global chain will result in disruption in the export-import market. We need to anticipate this change by remapping the global chain after the Covid-19 epidemic. Markets in Asia and Africa, which have not been well developed, may play a more important role in the future for the domestic economy.
Environmental awareness is not only a moral standard, but also a global standard which will likely become a new non-tariff barrier. We must anticipate this by identifying the possibility of getting a better position in the green economy arena in the future. Indonesia has the potential to become an important player in electric cars because it has the world\'s largest nickel content as a raw material for the production of electric batteries.
The light snow that accompanied the inauguration of Joe Biden gave new excitement to the global economy.
A PRASETYANTOKO, Rector of Atma Jaya Catholic University of Indonesia.
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