There have been efforts to make Indonesia an important part of the electric car supply chain. Indonesia is the world's largest producer of nickel, which is the main ingredient for electric batteries manufacturing.
By
A PRASETYANTOKO is rector of Atma Jaya Catholic University
·5 minutes read
AFP/SAUL LOEB
US President Joe Biden (R) and China's President Xi Jinping (L) shake hands as they meet on the sidelines of the G20 Summit in Nusa Dua on the Indonesian resort island of Bali on November 14, 2022.
The successful accomplishment of the Group of 20 Summit in Bali on 15-16 November was no fluke. It was the fruit of hard work, not only in organizing the event, but also in persistent efforts in transforming the economy so far.
Indonesia’s consistency and amenability were key to the approval of the Bali Declaration (the G20 Bali Leaders' Declaration). President Joko “Jokowi” Widodo is the only leader to have met directly with Ukrainian President Volodymyr Zelensky, Russian President Vladimir Putin, Chinese President Xi Jinping, and United States President Joe Biden as he has been engaging in mediation to help tone down global geopolitical tensions.
Many, even the government itself to a certain extent, had been previously pessimistic that the G20 Summit would result in an agreement. The ministerial-level meetings that had since February been held both on the financial and Sherpa tracks always failed to produce a communiqué. Russia's invasion of Ukraine caused G20 member countries to polarize, which many predicted might lead to its disbandment.
In addition, it was also agreed to form a Just Energy Transition Partnership for Indonesia fund worth $20 million.
However, the Bali summit proved otherwise. This declaration encapsulated fairly broad agreements. In anticipation of a pandemic, a Pandemic Fund was established with an initial committed financial support amounting to US$1.5 billion. In order to increase the International Monetary Fund (IMF)’s capacity to help countries affected by the crisis, a Resilience and Sustainability Trust was agreed with an initial commitment of $81.6 billion. In addition, it was also agreed to form a Just Energy Transition Partnership for Indonesia fund worth $20 million.
Indonesia's future
The Economist magazine, in its 19/11/2022 edition, raised the main theme of Indonesia in three long articles. One of them was titled "Why Indonesia Matters." The G20 meeting has brought Indonesia back into the world's spotlight, according to The Economist. Indonesia last came to the world's attention during the 1998 Asian crisis when we were part of the epicenter of the problem. The story is completely different now.
MEDIA CENTER G20 INDONESIA/SIGID KURNIAWAN
President Joko Widodo (right) welcomes the arrival of United States President Joe Biden at the location of the G20 Summit (G20 Summit) in Nusa Dua, Bali, Tuesday (15/11/2022).
Along with India, Indonesia is considered an Asian giant that has gained momentum from a geopolitical shift with the US and China as central points. However, Indonesia’s emergence in the global geopolitical constellation is also owed to its convincing economic performance.
In addition to the appealing huge potential, our economy has attracted the attention of investors because the transformation has been on the move in infrastructure, state-owned enterprises (SOEs), education, labor and investment regulations.
There have been efforts to make Indonesia an important part of the electric car supply chain. Indonesia is the world's largest producer of nickel, which is the main ingredient for electric batteries manufacturing. It produced up to 1 million metric tonnes in 2021, which was about 37 percent of the world's total production. In addition, Indonesia also has the third largest cobalt reserves in the world after Congo and Australia.
Indonesia is blessed with abundant natural resources. However, without us putting in great efforts, natural wealth could turn a backfiring curse. Endeavor in the raw material processing industry, coupled with concurrently stepped-up promotion for environmentally friendly industrialization are among the keys to economic transformation.
The government has pledged to phase out the dependency on coal-based steam power plants (PLTU). The commitment to achieving net-zero emissions in the electricity sector by 2050 has received funding support of $20 billion (some Rp 310 trillion) through the Just Energy Transition Partnership (JETP) scheme signed at the G20 Summit.
The scheme involves donors consisting of the US, Japan and several European Union (EU) member countries as well as private parties with the fund to be disbursed in stages over the next five years.
This funding scheme involves multilateral institutions, such as the Asian Development Bank.
Our energy transition has also received support from the Climate Investment Fund with the committed financial assistance of around $500 million, equivalent to around Rp 7.7 trillion. This funding scheme involves multilateral institutions, such as the Asian Development Bank.
Private support is expected to increase in the near future through various foundations, such as Bloomberg Philanthropies, the Bezos Earth Fund, the Rockefeller Foundation, IKEA and High Tide. In the financial sector, initiatives have come from members of the Glasgow Financial Alliance for Net-Zero (GFANZ) supported by Citi, Bank of America and others.
The G20 momentum needs to be followed up with hard work in various fields. In the field of renewable energy, Indonesia has the potential to become one of the largest renewable energy producers in the world. Taking advantage of the demographic bonus accompanied with technology-literacy promulgation, Indonesia has the potential to become one of the technology sector incubators supported by creative and innovative young human resources.
Regarding digital innovation, Indonesia has shown its far-reaching vision. Prior to the G20 Summit, five ASEAN central banks (Thailand, Malaysia, Singapore, the Philippines and Indonesia) agreed to use a digital-based integrated payment system at the initiative of Bank Indonesia (BI).
KOMPAS
President Joko Widodo invited the heads of state participating in the G20 to plant mangroves together at the Ngurah Rai Grand Forest Park (Tahura), Bali.
In the private sector, Indonesia's leading move in the digital field is also recognized. As of April 2022, there are 2,354 technology-based startups in Indonesia, which is the most in Asia, followed by Singapore with 1,013 startups. Home to two companies with decacorn status and eight unicorns, Indonesia shows potential in digital sector development.
Indonesia's hard work has so far born fruit. The accomplishment in the G20 Summit with many accolades is only part of Indonesia's (economic) transformation efforts. The biggest challenge is how to ratchet it up ahead.
The G20 Summit momentum needs to be carried over to make best use of the opportunities now and ahead. Hard work and consistency are the keys to the sustainability of transformation that has already started.
