Indonesia will take the presidency of G20 in 2022 which will hopefully open new window of opportunities for it, all the member countries and the world alike. On its part, Indonesia encourages and facilitates all countries to work together to achieve a stronger and more sustainable world recovery.
The Italian G20 presidency hosted nearly 175 events in 2021, including 20 ministerial meetings, two special meetings on health and Afghanistan with G20 leaders, 62 meetings of working groups, 60 Finance Track meetings, and several meetings with engagement groups.
It seems that during its presidency of G20 Indonesia will have to develop a “flight plan” that ensures new initiatives on economic recovery, international tax and climate finance. In this regard, Indonesia has rich experience chairing Investment and Infrastructure Working Group which should be responsible for overall guidance on global macroeconomic policies, global financial imbalances, and global economic growth. Thus Indonesia will be productive and participatory.
Indonesian leaders assured that they will focus on strengthening international cooperation to achieve equitable post-pandemic economic growth during its presidency of G20.
Hopefully, by assuming the 2022 presidency, Indonesia has a strategic opportunity to participate in determining the direction of global economic recovery in post-COVID-19 pandemic.
Fortunately the G20 comprises of developed and developing countries, which together account for 85 percent of the world’s gross domestic product, 80 percent of global investment, 75 percent of world trade and 66 percent of the world’s population. Moreover, Indonesia the only Southeast Asian member of the G20 was first invited to attend the G20 summit in 2008 in the United States. Thus Indonesian presidency of G-20 has numerous socio-economic, geopolitical and geostrategic orientations.
Indonesia is Southeast Asia’s largest economy and the fourth most populous country in the world. Interestingly, even in the darkest days of the COVID-19 pandemic, the leaders of Indonesia have managed to keep their democracy and economy relatively healthy.
Indonesia as G20 president would foster cooperative decision making. The coronavirus worsened prospects of multilateralism but hopefully, Indonesia can be a bridge to overcome these challenges. In this regard, Indonesia should chalk out holistic and comprehensive policies for securing equitable access to COVID-19 vaccines.
Moreover, Indonesia must consider issues of common interest for both developed and developing countries. Therefore, a comprehensive economic recovery agenda is the need of the hour for which Indonesia should play an active role during its presidency of G-20.
In this connection, Indonesian Finance Minister Sri Mulyani Indrawati called on G20 countries to prioritize efforts to tackle future pandemics by financing the health sector. The global economy and countries grappled with the deep human and economic cost brought on by this borderless, unforgiving pandemic which should be tackled through joint efforts during Indonesian G20 presidency. Indonesia agreed to set up a special forum focusing on financing, to coordinate prevention, detection and others responses during health sector disruptions. Furthermore, Indonesia’s 2022 presidency will provide the G20 with the opportunity to focus on promoting inclusive growth, while demonstrating the country’s growing political influence and offering a chance to shift global attention to the region’s needs. Asia-Pacific countries hard hit by the COVID-19 pandemic will be hoping of cohesive leadership of Indonesia and a clear pathway towards economic recovery.
Indonesia’s G20 presidency presents a unique opportunity for global leaders to deliver more inclusive, sustainable economic development for a region that desperately needs assistance.
Since 2009, the G20 leaders have met four times in the Asia-Pacific region, including in Seoul in 2010, Brisbane in 2014, China in 2016 and Japan in 2019. As Indonesia is the only Southeast Asian member in the group, its hosting will place important emphasis on the key challenges for emerging regional economies, particularly those members of the Association of Southeast Asian Nations.
ASEAN has maintained a close interest in the G20 agenda. Building on the ethos of ASEAN centrality, the regional grouping has actively supported Indonesia’s membership as an opportunity to pursue the wider interests of emerging economies on the global stage.
The ASEAN G20 Contact Group, established in 2009, has proven itself a useful mechanism for coordinating ASEAN’s position and interests on the G20 agenda. And with the notable exception of 2019, the ASEAN chair has regularly participated as an invited guest in the G20 summit.
Global recovery from COVID-19 will be the top priority for Indonesia and ASEAN. Working under the theme, ‘Recover together, recover stronger’, Indonesia will press G20 leaders for their commitment to deliver on a ‘triple-dividend’ agenda maximising investments in health and economic development to achieve climate-friendly, sustainable growth at local, regional and global levels.
Indonesian president Widodo signaled his government priority to advocate particularly for the interests of archipelagic and small island states as well as vulnerable groups. Youth engagement and employment, inclusive digital economy, women’s empowerment and low carbon solutions that unlock climate finance should be prominent themes of its presidency of G20.
Western governments, from Washington to Canberra, maintain high expectations for Indonesia to play a bigger, more constructive role in the world. Widodo’s expectations will be fairly straightforward that G20 leaders work cooperatively to facilitate collective strategies for economic recovery.
Understanding the challenges and the need for collective action, Indonesia will focus on three main pillars for its G20 2022 Presidency namely: Global Health Architecture, Sustainable Energy Transition, and Digital Transformation. Through these pillars, Indonesia will continue to take the lead on ensuring equitable access to COVID-19 vaccines, promoting sustainable and inclusive economic development through participation and digital economy.
For him, the 2022 G20 summit represents a dual challenge: shifting the global agenda towards the interests of developing Asia-Pacific economies and, in turn, strengthening Indonesia’s longer-term leadership position in the region. And he is likely to invest significant diplomatic capital to ensure Indonesia gets close to achieving these outcomes.
To conclude Indonesia should follow exit strategy to support economic recovery process particularly developing economies from the spillover effect of exit policies in countries further along their economic recovery journey typically advanced economies. It should address the element of economic uncertainty, financial crunch to secure future growth,
addressing the scarring effect of the crisis to increase productivity and growth in the long term, while paying due attention to the labour market, households, corporate sector and financial sector.
Indonesia should pursue digitalized payment system by standardizing cross-border payments (CBP) as well as the General Principles for Developing CBDC.
It should promote concept of sustainable finance because of high risk of climate change by transitioning towards a low carbon economy as well as sustainable finance from a macroeconomic and financial stability perspective.
Indonesia should implement e-financial policies, program, products and parameters by utilising open banking to increase productivity, as well as support the economy and financial inclusion for underserved communities, such as women, young people and MSMEs, including cross-border aspects.
During its presidency of G20 Indonesia should talk about international taxation particularly implementation of the joint OECD/G20 inclusive framework on tax planning strategies known as Base Erosion and Profit Sharing (BEPS).
Hopefully, G-20 Presidency will bring numerous befitting propositions to Indonesia starting from showcasing its strong economic resilience during COVID-19, projecting Indonesia’s position as one of the largest world economies, with the ability to represent other developing economies, providing value addition to Indonesia’s recovery in terms of economic activity as well as domestic and international public trust, supporting and boosting economic recovery activity in Indonesia, affirming Indonesia’s leadership in terms of international and economic diplomacy in the region, considering Indonesia is the only G20 member among ASEAN countries, positioning Indonesia at the forefront of international focus and attention, particularly in terms of the economy and finance, highlighting Indonesia’s impressive achievements to the world and represents a starting point for restoring post-pandemic economic confidence at home and internationally, presenting an opportunity to introduce Indonesia’s tourism sector and local products to the world, thus reviving the national economy and last but not least, recognizing of the importance of collective action and inclusive collaboration among major developed countries and emerging economies around the world has always been the core purpose of the G20. Today, the world needs it more than ever. The global pandemic has affected every aspect of the society, from health, education, to international trade. At the same time, gaps in countries’ capacities to address the crisis continue to prevent the world from fully controlling the common problems and crises facing us right now.
Hopefully, Indonesia will also maintain the aspiration to continue to improve G-20 collective capacity in securing the shared prosperity among nations, through various reform efforts in global taxation, stronger cooperation in fighting corruption, deepening of infrastructure financing, and pushing for a more democratic, and representative international cooperation.
