The finance track for Indonesia’s G20 presidency officially commences today December 9, with the first Finance and Central Bank Deputies Meeting (FCBD) taking place on December 9—10, 2021. This was conveyed by the Minister of Finance Sri Mulyani Indrawati and BI Governor Perry Warjiyo at a press conference in Nusa Dua, Bali.
Currently, the world is still facing high levels of uncertainty due to the pandemic. Inequalities in economic recovery between advanced and developing countries that are still trying to recover from the pandemic due to limited access to vaccines widened. The improvement in global economic performance, especially in advanced countries, accompanied by growing inflationary pressures has also led to tighter policies (tapering), potentially making these recovery disparities worsen. Meanwhile, a prolonged pandemic will cause persistent or ‘scarring’ effects; thus, the right exit strategy and efforts to overcome the scarring effect problem are prerequisites for a sustainable recovery. The main agenda of Indonesia’s G20 presidency as directed by the President of the Republic of Indonesia is narrowed into 3 areas, specifically inclusive health, digital transformation, and energy transition. In addition to realizing equitable vaccination, Indonesia’s G20 presidency is expected to succeed in accelerating digitization and directing global policy coordination related to climate finance.
The Minister of Finance Sri Mulyani Indrawati in a press conference said, “Indonesia’s G20 presidency will be an opportunity for Indonesia to show its role in leading global forums to address various challenges and issues at the world level. Indonesia is determined to overcome the global challenges that will continue to arise and seek the best solutions, ensure that all countries recover together, and encourage policy reforms that support stronger, sustainable, balanced, and inclusive economic growth post-pandemic. Accordingly, Indonesia’s G20 presidency will be carried under the theme Recover Together, Recover Stronger“. The Ministry of Finance and BI will encourage discussion of six (6) priority agendas in the financial track, specifically (1) Coordination of exit strategies in supporting global recovery, (2) Efforts to handle the scaring effects of the pandemic on the economy to support stronger growth in the future, (3) Strengthening payment systems in the digital era, (4) Development of sustainable finance, (5) Improvement of an inclusive financial system, and (6) International Tax Agenda.
In an agreement with the statement of the finance minister, BI Governor Perry Warjiyo, on the same occasion stated, “This initial meeting plays an important role in ensuring the sustainability of the G20 presidency in supporting global economic recovery both in the short and long term, in line with the theme Recover Together, Recovering Stronger”. In maintaining sustainability and strengthening global collaboration, today’s FCBD meeting involved the troika finance minister, namely the Italian Minister of Economy and Finance Daniele Franco, the Indonesian Minister of Finance Sri Mulyani Indrawati, and the Indian Minister of Finance Nirmala Sitharaman, in a hybrid High-Level Discussion which discussed various priority agenda in facing economic challenges. The meeting also discussed Recover Together: Policy Setting for Smooth Exit Strategy, and Recover Stronger: Addressing Scarring Effect to Secure Future Growth. The discussion presented panelists from the International Monetary Fund (IMF), Financial Stability Board (FSB), World Health Organization (WHO), World Bank, Bank for International Settlement (BIS), and Organization for Economic Cooperation and Development (OECD). Furthermore, Perry added that the finance track priority agenda in the G20 Presidency is relevant to BI tasks, including international cooperation in normalizing monetary policy, the implementation of regulations in the financial sector that is conscientious to financial sector readiness, and digitizing payment systems, including the Central Bank Digital Currency (CBDC).
In its G20 Presidency, Indonesia will continue several legacy issues, specifically (1) Integrating pandemic and climate risks in monitoring global risk; (2) Strengthening the Global Financial Safety Net (GFSN); (3) Increasing Capital Flow; (4) Continuing the Data Gap Initiatives; (5) Improving Financial Sector Regulatory Reform; (6) Strengthening debt management and transparency; (7) Accelerating the infrastructure agenda towards sustainable and inclusive development; (8) Optimizing financing support from multilateral development banks (MDBs); (9) Strengthening health system capacity in pandemic prevention, preparedness and response; and (10) Continued support for attracting private sector investment in low-income countries, such as in the African region.
The priority agenda and legacy issues of Indonesia’s G20 Presidency are expected to balance the global agenda with domestic priorities and interests, as well as align the interests of various parties, both developed and developing countries.