Indonesia’s Diplomacy Maneuver at the G20 Summit
The Bali Package will be an opportunity and a gamble for Indonesia's leadership in the global order. Its success will become its historic legacy that will be remembered by future generations and throughout the world.
Over the next two days, Bali will be the venue of the first Group of 20 Summit held by Indonesia, the only ASEAN country in the G20 forum, one of the largest economic forums in the world.
Indonesia is the anchor of ASEAN, with its stable democratic and economic strength over the past decade, among the G20 member countries.
Amid the Covid-19 pandemic, global inflation, climate change, energy and food crises and of course the conflict between Russia and Ukraine, we should be grateful that Indonesia is still a G20 member, with the Organisation for Economic Co-operation and Development (OECD) projecting economic growth of above 4 percent in 2022 and 2023 along with China, Saudi Arabia and India.
Indonesia is the anchor of ASEAN, with its stable democratic and economic strength over the past decade, among the G20 member countries.
The last time Bali witnessed a major conference was the ninth major conference of the World Trade Organization (WTO) on 3-7 December 2013. At that conference, the Bali Package was born, which aims to loosen global trade boundaries.
This Bali Package was also unique because it was the first agreement approved by all members of the WTO – an organization with a high level of conflict and complexity.
Concrete action
There have been many debates and criticisms of the G20 forum since the 1998 monetary crisis, be these in terms of the legitimacy, effectiveness or accountability of the G20.
As the only ASEAN country that is a member of the G20, Indonesia as the host and president in 2022 has given birth to many meetings outside the issue of global economic order.
Many discussions on agendas outside of economic issues have been carried out, including ministerial level meetings, which have never taken place before. These include, among other areas, planning and development, tourism, education, culture and the Sustainable Development Goals (SDGs) to meetings at the parliamentary level of G20 countries.
For this reason, it is interesting to observe how the declaration of the "Bali Package Volume II" can be formulated and provide concrete actions, not mere rhetoric, considering that the world is currently dying due to the multiple crises that plague it. It is necessary to push the performance of the G20 in Bali, including to spur a stronger, better, more equitable, sustainable post-pandemic global economic recovery.
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> Will the G20 be able to Navigate the Multidimensional Crisis?
G20 leaders must act on the group’s fundamental “engine” that so far has not received serious attention, namely reducing the gap in the level of commitment compliance among G20 countries.
This is a test of the credibility and effectiveness of the G20 as well as providing solutions that the world desperately needs.
Based on the records of the G20 Research Group and the University of Toronto, the G20 compliance rate is still low with an overall average of 71 percent. This includes thematic areas, such as health at 72 percent, digitalization at 68 percent and sustainable energy at 70 percent.
List of problems
Several key points that need to be brought up by Indonesia as the host and in formulating the Bali Package Volume II are drawn from an inventory of enormous, urgent problems worldwide in the social, economic, ecological and security sectors.
First, Russia. Its invasion of Ukraine has increased global energy and food problems which have implications in many aspects, up to fiscal and monetary. The "failure" of the United Nations as the vanguard of peace resolutions must be taken over by the G20.
Second, concentration and totality on the issue of climate change and sustainable development. Indonesia should be a pioneer and this is an opportunity for internal improvements, starting from the management of natural resources and the environment, such as forests, peat, mangroves, energy and mining to hydrometeorological issues.
About 75 percent of the world's carbon emissions come from the G20. The top 10 emitters of greenhouse gases (GHG) that cause global warming are members of the G20, namely the United States, China, Brazil, Indonesia, Germany, India, the United Kingdom, Japan and Canada.
G20 member countries, particularly Argentina, Australia, Brazil and Indonesia, are also major contributors to environmental degradation such as deforestation.
It is sad to see non-G20 countries like Pakistan sweat more with programs like its Tsunami Billion Trees initiative. Since 2018, 30 million trees have been successfully planted. In fact, the impact of Covid-19 which has created unemployment has been exploited by the Pakistani government by accommodating 63,000 people to plant trees.
Also read:
> Indonesia: Navigating a Difficult Global Economy
> The G20 and Global Economic Governance
Third, macroprudential policies. Economic growth is increasingly uneven, with rates varying across countries depending on the level of vaccination, the ability to recover and the sustainability of fiscal and monetary support.
The macroprudential perspective is also concerned with normalizing fiscal and monetary policy, while reducing governments’ unprecedented fiscal deficits, public and private debt, major central bank balance sheets and inflation, which has been stronger for longer than previously expected.
Likewise, the need for debt relief for poor and vulnerable countries, even though China refuses to disclose and reduce the debt of its clients. In fact, there are many steps that can be taken, including the transfer of debt to various other forms, including nature conservation (debt for nature swap).
Indonesia's step as a frontrunner country to manifest the Addis Ababa Action Agenda's sustainable financing agenda needs to be appreciated with its blended financing scheme. Development financing innovations that encourage the contribution of actors outside the government, such as the private sector and philanthropists, should be imitated and mainstreamed by the G20, especially in order to make the SDGs agenda a success.
Leadership at stake
The last is the need for the G20 to develop medium-term (five years) and long-term (20 years) economic and global development road maps.
These road maps need to be supported by analysis of the practical adaptation and mitigation of potential threats, hazards, challenges and disasters in the future that threaten and disrupt people's lives and livelihoods, both by natural and non-natural factors as well as human factors.
This can be supported by G20 partners, such as through the think tank 20 (T20), the youth 20 (Y20) and community organizations 20 (C20).
This Bali Package will be an opportunity and a gamble for Indonesia's leadership in the global order. Its success will become its historic legacy that will be remembered by future generations and throughout the world, following in the footsteps of the Dasasila Bandung (Bandung Principles) as a product of the 1955 Asian-Africa Conference (KAA), which contributed significantly in supporting world harmony and cooperation.
Bonataon Maruli Timothy Vincent Simandjorang
Bonataon Maruli Timothy Vincent Simandjorang, Researcher at the Center for Public Policy Research, National Research and Innovation Agency (BRIN)
This article was translated by Kurniawan Siswo.
