Nusa Dua, 14 July 2022 – The Minister of Finance of the Republic of Indonesia, Sri Mulyani, and her team again held physical and virtual bilateral meetings, a day before the Third Meeting of the Finance Minister and Central Bank Governors (FMCBG) began. The Minister of Finance discussed with three G20 Finance Ministers, namely the Minister of Finance of India, Ms. Nirmala Sitharaman; Australian Treasurer, Mr. Jim Chalmers; and UK Chancellor, Mr. Nadhim Zahawi. In addition to meeting with finance ministers from G20 member countries, the Indonesian Minister of Finance (Menkeu) also had the opportunity to meet Mr. Masatsugu Asakawa, President of the Asian Development Bank (ADB).
The discussion agenda for the bilateral meeting with the Minister of Finance was about strategic issues, such as food crisis due to geopolitical conditions, the availability of COVID-19 vaccination, the implementation of the Energy Transition Mechanism (ETM) to support sustainable finance, strengthening the Asian region economy, enhance human resources, and the G20 Presidency Indonesia.
The discussion on the food crisis became one of the main discussion agendas between the Minister of Finance and the Indian Minister of Finance, and the Australian Treasurer. The Ministers of Finance discussed the challenges to unfinished recovery, including the food crisis that occurred due to resolved geopolitical tensions. According to Ms. Nirmal, one of the regions that have experienced a significant impact is the African region, considering the dependence of African countries on Ukraine as a food supplier in their country. Shitaraman conveyed the need for an in-depth discussion on this matter by world leaders. In response to this, the Minister of Finance shared Indonesia’s initiative to discuss food security issues through a seminar on Food Insecurity at the third FMCBG in 2022. This must be followed by more concrete cooperation, especially for food availability and prices.
Food crisis and spillover effects from the war are the concerns to the UK Chancellor, Mr. Zahawi. He considered the need for a tangible solution for all levels of society and businesspeople who are currently threatened by the impact of high inflation, increasing food and energy prices. The Chancellor also underlined the importance of maintaining free trade and avoiding export bans that could exacerbate the impact of geopolitical conflicts. Full support also needs to be given to the bank’s capital adequacy framework, especially to help the least developed countries. In response, the Minister of Finance acknowledges that there is a political change in the UK and appreciates the UK’s important role in various strategic issues. The Minister of Finance agreed that in its development, war and its spillover effect caused suffering for mankind. The role of the G20, especially through the Finance Track, is needed to stay active in discussions and seek real solutions. “The G20 will continue to be the premier economic forum as it was in 2008 in response to the current and future economic crises,” said the Minister of Finance.
Access to vaccines and its availability is one of the main topics that was discussed with Minister Nirmala and Mr. Asakawa. The Minister of Finance agreed on the importance of maintaining access and availability of COVID-19 vaccinations which should not be overlooked, considering that the pandemic has not been fully resolved. Asakawa discussed one of ADB’s financing activities for the pharmaceutical sector. The Minister of Finance understands the rationalization of financing needs in the sector as a form of reform in the health sector. These steps are aimed at establishing a reliable and trusted vaccine production center, so that it may support preparations for future pandemic as agreed in the Indonesia G20 Presidency through the establishment of the Financial Intermediary Fund (FIF).
To Mr. Asakawa, Minister Sri emphasized ADB’s important role in ensuring the success of Sustainable Finance agenda. ADB has initiated the Energy Transition Mechanism to assist developing countries in energy transitioning to be more sustainable and affordable, aligned with the “just and affordable” value. This was also conveyed by Minister of Finance to Treasurer Chalmers, who stated that Australia can be a reliable partner to support Indonesia.
The Minister of Finance also discussed the importance of helping the economic recovery of the Asian Region and the development of Human Resources (HR). The Minister of Finance hopes that ADB as a multilateral development bank in the region can help countries in Asia that are most affected in this pandemic era. Regarding international tax issues, Mr. Asakawa highlighted the International Taxation agenda, particularly regarding the delay in the implementation of the Multilateral Convention or Pillar 1 by the OECD. “The delay in the implementing Pillar 1 does not hinder other tax initiatives in Asia,” continued the Minister of Finance. The Minister of Finance referred to the implementation of one of the side events of the third FMCBG, namely the Asia Initiative, which focuses on the commitment of Asian countries to enforce tax transparency to reduce tax avoidance practices. Mr. Asakawa expressed his commitment to continue to support the Indonesian presidency, while conveying that currently ADB is also focusing on improving human resources, competitiveness index, and domestic resource mobilization (DRM). In line with this, Treasurer Chalmers also conveyed to the Minister of Finance that Australia also has a priority to establish bilateral relations in the education sector with Indonesia.
Specifically on Indonesia G20 Presidency, Minister Sri Mulyani and Minister Nirmala also agreed that G20 must communicate to global community all the deliverables that were successfully achived during the presidency.