Indonesia’s G20 Presidency has Mission to Restore Forum’s Spirit
The G20 is actually a forum formed to address the global financial crisis. Now, in the midst of various crises, the G20 is expected to be able to play its role again.
By
Kompas Team
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KOMPAS
Finance Minister Sri Mulyani
JAKARTA, KOMPAS — In the midst of increasing global geopolitical tensions, Indonesia’s Group of 20 presidency is trying to restore the G20 as a forum for providing solutions to global problems. At the G20 Bali Summit next week, the leaders of the G20 member countries are expected to put aside their differences and agree on a solution to the multidimensional crisis facing the world.
“Economic and noneconomic cooperation is a prerequisite for the world to progress together. In Bali, world leaders are expected to agree and work together to save the world from crisis," Finance Minister Sri Mulyani told Kompas during an exclusive interview on Tuesday (11/8/2022).
The world is currently facing a successive series of crises that started with the scarring effects of the Covid-19 pandemic, followed by rising geopolitical tensions that triggered food and energy crises, the threat of climate change, and digital disruption.
Sri Mulyani underlined that the G20 was established to discuss the world’s problems. As a multilateral forum, the G20 met to address the global financial crisis of 2007-2008.
When the world’s leaders gathered then, they agreed to various solutions and reform measures to overcome the global financial crisis.
Amidst the current multidimensional crisis, Sri Mulyani said, the G20 was expected to fill that role again. On the one hand, the current condition of Indonesia's economy was stable, with Statistics Indonesia (BPS) reporting that the economy grew 5.72 percent year-on-year in the third quarter of 2022. On the other hand, she continued, Indonesia would not remain silent in the midst of the global situation today.
At the G20 Bali Summit to be held on 15-16 Nov. 2022, Indonesia would continue to seek mutual consensus through a leaders’ declaration to address the current crises.
We should be able to agree to disagree [on geopolitical issues] without destroying the agreed framework of cooperation.
"We hope that Indonesian [G20] presidency will produce a declaration at the level of the heads of state to give confidence, so the world will have a mechanism to deal with today's complicated global problems," said Sri Mulyani.
She believed that any disagreements among member countries could be managed.
“This is not something new because in the last 11 months, all countries have made their respective positions known. We should be able to agree to disagree [on geopolitical issues] without destroying the agreed framework of cooperation," she said.
No easy task
A number of G20 working groups and ministerial meetings over the past 11 months have not been successful in producing a communiqué or reaching consensus due to sharp polarization. However, the forum’s efforts did not stop there.
Sri Mulyani explained that last month’s fourth G20 Finance Ministers and Central Bank Governors Meeting (FMCBG) meeting in Washington, DC had produced a two-part Chair Summary.
Part One contains the attitudes of a number of countries with respect to the geopolitical tensions resulting from the Russia-Ukraine war and its spillover effects on the global economy. Not all member countries agreed to this part, the forum was unable to reach consensus or produce a joint communiqué.
KOMPAS/COKORDA YUDISTIRA
Minister of Communication and Information Johnny G Plate gave a welcoming speech at the opening of the G20 Digital Innovation Network (DIN) event at the Bali International Convention Center (BICC), Nusa Dua, Badung Regency, Bali, Saturday (3/9/2022).
Part Two summarizes the attitudes of member countries towards various concrete deliverables and action initiatives on various issues through financial channels and economic cooperation.
According to Sri Mulyani, almost all points in Part Two of the Chair Summary were agreed, excepting a note from China regarding debt restructuring assistance for poor countries, which was based on the Common Framework for Debt Treatment scheme established during Italy’s G20 presidency.
“However, in general, everything was agreed. Despite the ongoing political debate, the G20 countries have agreed to protect the world economy. This will be brought to the summit and become part of the leader's declaration," she said.
The bilateral meetings to be held during the summit would also help determine each country's political stance.
“Bilateral meetings are opportunities that are expected to produce agreement, or at least to clear up differences and misunderstandings. It would be even better if a collaborative initiative could be produced," she said.
In addition to debt restructuring assistance for vulnerable countries, food security response programs are among the concrete action initiatives established through the finance track. These programs aim to anticipate the threat of a food crisis with total funding of up to US$60.5 billion (Rp 944 trillion).
There is also a health financing program to anticipate future pandemics called the Financial Intermediary Fundfor Pandemic Prevention, Preparedness and Response, or the Pandemic Fund. The total commitment is $1.4 billion for the program, which aims to strengthen the global health architecture. Indonesia has contributed $50 million to the program.
To tackle the energy crisis, the G20 countries agreed on a financing scheme for a gradual and fair energy transition in developing countries, called the Energy Transition Mechanism Country Platform for a just and affordable transition.
Benefits
The Office of the Coordinating Economic Minister reported that apart from these financial channels, multilateral and bilateral forums agreed to 226 collaborative projects in global health infrastructure, digital transformation, energy transition, and other sectors. Of these, Indonesia proposed 14 initiatives that are located in the country.
Coordinating Economic Minister Airlangga Hartarto said Indonesia’s G20 presidency was able to produce 140 bilateral projects valued at $71.49 billion for Indonesia.
The G20 must again echo the importance of international economic cooperation, returning to the original mission of [its establishment].
The projects include 99 investment projects (grants) worth $60.7 billion, 11 financing projects (loans) worth $ 10.79 billion, and 31 projects that have no quantitative value, but have strategic value for Indonesia.
Economic department head Fajar B. Hirawan at the Centre for Strategic and International Studies (CSIS) Jakarta expressed his hope that the Indonesian presidency would revive the prominence of more inclusive international cooperation on the economy, especially for poor and developing countries that had been marginalized during the issues raised at the G20.
“Do not let countries divide or fall into populism or narrow nationalism that only cares about solutions to domestic problems. The G20 must again echo the importance of international economic cooperation, returning to the original mission of [its establishment]," said Fajar. (AGE/DNE/FAJ/SUT/LAS/JOS)
This article was translated by Hendarsyah Tarmizi.
