Nusa Dua – Bali, July 16th, 2022 – Today, Saturday (16/07), the G20 Ministers of Finance and Governors of Central Banks have finished the third meeting under the Indonesian G20 Presidency. The meeting was attended by G20 members, invited countries including Ukraine, and international organizations.
G20 Finance Ministers and Central Bank Governors (FMCBG) discussed seven agendas, namely 1) global economy; 2) global health agenda; 3) international financial architecture; 4) financial sector issues; 5) sustainable finance; 6) infrastructure; and 7) international taxation. In this 3rd meeting, Finance Ministers and Central Bank Governors of G20, Minister Sri Mulyani Indrawati, and Governor Perry Warjiyo co-chaired the sessions.
At the press conference, Indonesia’s Finance Minister, Sri Mulyani Indrawati and Governor Bank Indonesia, Pery Warjiyo conveyed the appreciation for the broad support from G20 members, invitees, and international organizations. Sri Mulyani stated “we have been able to make progress in building bridges towards each other until today and for the next so as to tackle the challenges that we are facing”. On that occasion, Perry Warjiyo also reiterated that despite the challenging circumstances we are facing, the G20 as the premier forum for coordinating global economic issues remain committed to deliver concrete actions to support a strong, sustainable, balanced, and inclusive growth and recovery.”
As G20 Presidency, Indonesia maintains the integrity of G20 in this challenging time by prioritizing open dialogues and by focusing more on concrete actions. The outcome document of this FMCBG meeting is a Chair’s Summary which consists of fourteen paragraphs. Chair’s Summary has been published in our G20 website. This is proof that G20 members are supporting the main agenda of the Indonesian Presidency, “Recover Together, Recover Stronger,” and committing to deliver concrete actions.
On the global economy and risk agenda, the discussion covered two main topics: the current global economic situation and its challenges, including discussion on the impact of the Covid-19 pandemic and war in Ukraine to the global economic prospects, global inflation, as well as food and energy security; and the exit strategies and addressing scarring effect as impact of the pandemic. Many members recognize that the supply and demand imbalance have exacerbated the current challenges due to global supply chain disruptions and rising commodity and energy prices. This condition triggers an increase in inflation, ultimately threatening food security, especially for vulnerable groups. Members reaffirmed commitment to using all available policy tools to address economic challenges to maintain financial stability and long-term fiscal sustainability. To ensure a well calibrated, well planned and well communicated exit strategy and to address scarring effects, the Indonesia Presidency has developed the G20 Presidency Note on Policy Setting for Exit Strategies to Support Recovery and Addressing Scarring Effect to Secure Future Growth.
On the Global Health, all members reaffirm the commitment to prioritizing collective and coordinated action to get the pandemic under control. Members also welcome the establishment of a Financial Intermediary Fund (FIF) for Pandemic Preparedness, Prevention, and Response (PPR). FIF is a concrete action to build a global health architecture in pandemic PPR by ensuring adequate, sustainable, coordinated financing for post-pandemic recovery. Members will continue discussing the FIF’s governance which should include the central coordination role of the WHO, be G20-driven and be inclusive of low- and middle-income countries, additional non-G20 partners; and its operating arrangements, with the goal of launching it in September 2022. Some G20 members have formally announced contribution to the FIF, and other are actively consider contributing. To date, a commitment of approximately USD 1.28 billion has been secured for the FIF for pandemic PPR, which includes contributions from the United States, The European Commission, Germany, Indonesia, Singapore, the United Kingdom, the Wellcome Trust, the Bill and Melinda Gates Foundation. This 3rd FMCBG Meeting received additional contribution pledges from, Italy, China, the United Arab Emirates, Japan, and Korea.
On the G20 commitment to enhance long-term global financial resilience, the G20 will continue to monitor the risks of increased capital flows volatility, negative spillovers, and uneven market conditions by taking into account the completed review of IMF Institutional View (IV) on Liberalization and Capital Flow Management, the continued work on the operationalization of the IMF Integrated Policy Framework, and BIS Macro-Financial Stability Framework. The G20 is also committed to continuing discussions on the macro-financial implications of Central Bank Digital Currencies (CBDCs) as these may be designed to facilitate cross-border payments while preserving the stability of the international monetary and financial system. A joint initiative between the Indonesia G20 Presidency with the BIS Innovation Hub through TechSprint 2022 aims contribute to the debate on practical and feasible solutions to implement CBDCs.
On Sustainable Finance topic, members underlined the critical role of sustainable finance for a green, resilient and inclusive global economic recovery and the achievement of the 2030 Agenda for Sustainable Development and the Paris Agreement goals. Members commend on the G20 Sustainable Finance Roadmap progress; Developing framework for transition finance and improving the credibility of financial institution commitments; scaling-up sustainable finance instruments, with a focus on improving accessibility and affordability; and discussed policy levers that incentivize financing and investment that support the transition. In line with the agenda, on 14 July also marks a milestone for Indonesia where launched the Indonesian Energy Transition Mechanism (ETM) Country Platform. The ETM is an ambitious plan that enables the upgrade of Indonesia’s energy infrastructure and accelerates the clean energy transition toward net-zero emissions in a just and affordable manner.
On the topic of Infrastructure, members reaffirm their commitment to revitalizing infrastructure investment in a sustainable, inclusive, accessible, and affordable way. Members also welcome progress in developing a framework to best leverage private sector participation to scale-up sustainable infrastructure investment, which will complement investment from other sources, including public investment and finance provided by MDBs, and in developing a policy toolkit to mobilize financing mechanisms to enhance infrastructure investment in cities and regions. The members also endorse the G20 blueprint for scaling up Infratech financing and welcoming the development of the Global Infrastructure Hub for the long-term future.
The Presidency thank members for their ongoing commitment to implement the historic agreement on the G20/OECD two-pillar international tax package. Members support the ongoing work on Pillar One and welcome the completion of Pillar Two Global Anti-Base Erosion (GloBE) Model Rules, which pave the way for consistent implementation at a global level as a common approach, and look forward to the completion of the GloBE Implementation Framework. Members call on the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) to finalize Pillar One, including by signing the Multilateral Convention in the first half of 2023, and call on the Inclusive Framework to complete the negotiations that would allow the development of the Multilateral Instrument for implementation of the Subject to Tax Rules (STTR) under Pillar Two. Members also reaffirm the objective to strengthen the tax and development agenda in light of the G20 Ministerial Symposium on Tax and Development, and note the forthcoming new G20/OECD Roadmap for Developing Countries and International Tax. Members support the progress made on implementing internationally agreed tax transparency standards, including regional efforts and welcome the signing of the Asia Initiative Bali Declaration.
Members reiterated the commitment to strengthening the long-term financial resilience of the international financial architectureincluding strengthening financial resilience and the global financial safety net; mobilizing the Special Drawing Rights (SDR), to date USD 73 billion has been pledges; stepping up the effort to address debt vulnerabilities, On June 16, the Creditor committee for Zambia has been establish and had its first meeting; and continue to work collaboratively with the Multilateral Development Banks (MDBs) to support vulnerable countries to navigate the aforementioned global economic challenges, to pursue sustainable economic and social development, and to support financing global public goods.
On financial sector issues, Members discussed the COVID-19 exit strategies to support equitable recovery for financial stability and scarring effects. It also discussed efforts to address vulnerabilities in the Non-Bank Financial Institutions (NBFI), the climate-related financial risks; crypto assets; financial inclusion and digitalisation; and new data gaps initiatives. Members support taking forward to reinforce global financial system resilience and asked the Financial Stability Board (FSB) to intensify its monitoring. G20 Finance Ministers and Central Bank Governors commit to sustaining global financial stability, including through continued coordination of policy measures and implementation of international standards. Members welcome the FSB’s Interim Report on financial sector exit strategies and scarring effects of COVID-19 and looks forward to the final report’s policy considerations prior to the Leaders’ Summit in November.
The G20 continues deliberation on payment system in the digital era to achieve faster, cheaper, more transparent and more inclusive cross-border payments as this would deliver widespread benefits for economies worldwide. G20 Roadmap for enhancing cross-border payments for faster, cheaper, safe, and inclusive cross border payments. As a showcase of a regional implementation of the G20 Roadmap for Enhancing Cross Border Payment Roadmap, ASEAN-5 central banks will sign a General Agreement on Payment Connectivity among ASEAN-5 Central Banks in November 2022
The Indonesian G20 Presidency has also organized a series of side events – back to back with the G20 meetings – reflecting the Indonesian Presidency theme ‘Recover Together, Recover Stronger’. The G20 High-Level Seminar on Strengthening Global Collaboration for Tackling Food Insecurity collaboration with Saudi Arabia aimed at addressing the current food and its related challenges, as well as potential global collaboration. Under the topic, Presidency expect to understand the perspectives and to gather up-to-date data on the current situation to identify data-driven solutions. It also needs to explore solutions to alleviate market shortages, support agriculture trade and fertilizer market as well as proposals on how global collaboration could be strengthened to address food insecurity and its related issues. In the High-Level Seminar on Macroeconomic Policy Mix for Stability and Economic Recovery engaged members to discuss the importance of macroeconomic policy mix. Besides that, members also discuss coordination between policymakers from monetary, fiscal, and real sector policies that play a crucial role in economic recovery. Indonesian G20 Presidency also held the 2022 G20 Infrastructure Investor Dialogue, Asia Initiative Bali Declaration, and other side events. The discussions in all of the side events provide enrichment and new perspectives to the discussions we have had in the room over the past two days. Presidency thank all Ministers and Governors who shared their thoughts and views in these side events.
Indonesia G20 Presidency reiterate that G20 have to send a clear message to the international community that the G20 has a strong commitment to actions. This means that, at the G20, all members need to ensure that G20 have concrete deliverables to respond to current global challenges. Through concrete initiatives, the world will soon recover and rise stronger. Recover Together, Recover Stronger