G20 Presidency also Marks Asian Era

Amid intense rivalries and the pressure of various crises, Indonesia has succeeded in finding common ground in multilateral forums like the Group of Twenty (G20).

KOMPAS/COKORDA YUDISTIRA

I Gusti Ngurah Rai International Airport, Badung, Bali, became the main door for the reception of the G20 Summit delegation. The airport management is preparing to adjust the operations of I Gusti Ngurah Rai International Airport for the smooth and successful 2022 G20 Summit.

JAKARTA, KOMPAS – Although it has been a challenge, Indonesia’s Group of Twenty (G20) presidency was no coincidence. As the world shook with crises and conflicts, Indonesia’s effort to find common ground between the various conflicting parties in a multilateral forum like the G20 is proof that the Asian era has been revived.

In the finance track, for one, various cooperation initiatives were agreed by G20 member countries to ease the financial burden of vulnerable countries in facing the threat of multiple crises, including food, health, debt and energy. One such initiative is the energy transition financing scheme, the Country Platform for Energy Transition Mechanism for a Just and Affordable Transition.

Febrio Kacaribu, the Finance Ministry’s Fiscal Policy Agency (BKF) head, said on Saturday (5/11/2022) in Bogor, West Java, that not all countries were ready to make the transition from fossil fuels to new and renewable energy in a short period of time.

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This was especially the case for developing countries, where shifting from fossil fuels necessitated a gradual and costly transition. The initiative, along with the total commitment funds agreed by the G20 member countries, would be announced at the G20 Bali Summit on 15-16 Nov. 2022, he added.

“It is hard to expect a country to switch immediately from fossil fuels to green energy. That is why we are introducing this initiative to finance energy transitions in countries that need it. Apparently, [the initiative] was welcomed by many G20 countries,” said Febrio.

Asia-Pacific era

Indonesia’s G20 presidency was marked by several technical achievements in cooperation. In the context of the Asia-Pacific, these achievements support interregional economic cooperation. The region is currently a bright spot amid the threat of a global recession, with several Asian countries continuing to perform well. Moreover, advancements and development in the region are progressing well, and the Asia-Pacific region continues to play an important role in global manufacturing.

This was revealed in an online interview on 13 Oct. with Krishna Srinivasan, the Asia-Pacific department director of the International Monetary Fund (IMF). According to Srinivasan, the IMF forecast 4 percent growth in 2022 and 4.3 percent growth in 2023 for the Asia-Pacific.

This has caught the attention of academics, politicians and economists alike, and thus the term ‘The Asian Century’ has emerged,

“Although growth is lower than the 5.5 percent average achieved by the Asia-Pacific region over the past two decades, the region is still outpacing the performance of the global economy,” said Srinivasan.

This performance is part of the region’s history. Time after time over the last 40 years, Asia has continued to record astonishing growth.

“This has caught the attention of academics, politicians and economists alike, and thus the term ‘The Asian Century’ has emerged,” Michael Pocress wrote in an article published on the Cornell University website on 4 Sept. 2020.

MADE NAGI/POOL/AFP

Indonesia's Finance Minister Sri Mulyani Indrawati (L) greets US Treasury Secretary Janet Yellen (R) during their bilateral meeting at the G20 Finance Ministers and Central Bank Governors Meeting in Nusa Dua on July 15, 2022.

The Asian Century started after World War II, and was triggered by East Asia becoming a catalyst for regional growth, with continuous and ongoing waves of development. Growth of the Japanese economy skyrocketed from the 1950s to 1970s. The Four Asian Tigers (Taiwan, Hong Kong, South Korea and Singapore) experienced similar progress from the 1960s to the 1990s. China also advanced through similar progress from the 1980s until today.

As they advanced, Japan, the Asian Tigers and China left manufacturing and turned to technological production processes. This resulted in their looking to other Asian countries for industrial relocation. New players then emerged, such as Vietnam, Thailand, Malaysia and Indonesia.

The foreign exchange crisis prompted India to reform its economy, which was once attached to the License Raj system. In 1991, then-prime minister Manmohan Singh launched reforms that prevented businesses from being controlled by only a handful of businessmen with close ties to the government.

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The economies of country after country rose as a result opening up, save for North Korea and Myanmar. These countries then pushed the wave of development to their neighbors, incorporating all of Asia to become a hub of the global economy. Moreover, it has been forecast that Asia will again achieve economic triumph as it did 300 years ago.

In the 2011 report, Asia 2050: Realizing the Asian Century, the Asian Development Bank (ADB) forecast that Asia would again have more than 50 percent of the global economy in 2050. Asia’s middle class would have an additional 3 billion people and by 2050, prosperity in Asia would surpass that of Europe and the United States.

Throughout this process will be one star respected by the world, namely China. This country did not just imitate Japan and the Asian Tigers in relocating its manufacturing industry.

China also beat the world with a program to escape the middle income trap, which describes countries trapped in a competition with new countries that have cheaper labor. China has not only advanced technology, but is also the only country that changed the paradigm of Western dominance in manufacturing commercial aircraft. China has opened Pandora’s box of technology, which goes hand in hand with China’s aim to see the Asia-Pacific as a partner.

Asia has certainly benefited greatly from integration.

According to the ADB, the Asia-Pacific was able to emulate East Asia’s success pragmatically, rather than rambling on with a development philosophy. The ADB also noted that Asia had developed mutual trust and confidence among other countries in the region, which was crucial to regional cooperation.

The ADB said the Asian Century constantly faced upcoming challenges. However, Asia was also aware that national programs formed the most important pillars of Asian economic integration.

These issues are discussed in a variety of forums on Asia, including the G20. This has brought Asia to the view that regional cooperation is not only about trade, but also about reminding each other of inequality and other social issues.

The IMF now also views Asia as highly reliable in multilateral cooperation.

“Asia has certainly benefited greatly from integration,” said Srinivasan. (AP/AFP/REUTERS)

This article was translated by Kesya Adhalia.