Creator: Maria Monica Wihardja, ISEAS-Yusof Ishak Institute
The challenges of the twenty first century are world and existential — local weather change, pandemics, meals insecurity and nuclear conflict. International challenges require a worldwide response and higher world governance. However mustering an efficient response can be inconceivable if the worldwide group stays reliant on the outdated establishments and processes that have been established after World Warfare II.
With the mud but to settle from the COVID-19 pandemic, Indonesia is having to recalibrate the agenda of its G20 presidency. The conflict in Ukraine has stoked rising meals, vitality and fertiliser costs — all world shocks to which the G20 should reply.
The grouping should cope with the chance that US–China relations will regress after the Speaker of US Home of Representatives Nancy Pelosi’s go to to Taiwan. Indonesia should work even more durable throughout its G20 presidency to untangle this geopolitical snafu.
Indonesia chaired the second G20 International Ministers Assembly and the third Finance Ministers and Central Financial institution Governors Assembly of its presidency in July 2022. Whereas no joint communiqué was produced, Indonesia actually delivered in its management. Regardless of heightened tensions over the Russia–Ukraine battle, all G20 members attended the conferences. This exhibits the belief G20 nations place in Indonesia as an neutral chair due to its longstanding non-aligned overseas coverage.
Within the G20 International Ministers Assembly, nations mentioned strengthening multilateralism and addressing the worldwide meals and vitality crises. Indonesia additionally held 23 bilateral conferences as a part of the agenda. The G20 Finance Ministers and Central Financial institution Governors assembly delivered 12 negotiated paragraphs.
Important agreements have been made on points starting from the institution of the Monetary Middleman Fund for Pandemic Prevention, Preparedness and Response to raised handle future pandemics, and the OECD–G20 Worldwide Tax bundle to enhance the worldwide tax system. However the assembly failed to supply an settlement on two paragraphs regarding the impression of the conflict in Ukraine. This meant {that a} Chair’s Abstract was launched as an alternative of a joint communiqué.
Indonesia is working to ship concrete outcomes underneath the three precedence agenda for its G20 presidency — world well being infrastructure, inclusive digital transformation and vitality transition. Indonesia is now additionally focussed on addressing failing world meals provide chains. Reaching world cooperation on meals safety could be a serious achievement for the G20. Cooperation might embrace organising world and regional meals buffers, encouraging nations to be clear about their nationwide meals reserves and even the signing of a worldwide meals treaty.
As low-hanging fruit, the G20 might construct on and strengthen current mechanisms, such because the Agriculture Market Info System launched through the 2011 G20 presidency. The G20 might equally coordinate with the UN Disaster Response Group and International Agriculture and Meals Safety Program to help these nations that face dire meals shortages when large-scale battle happens.
The G20 might additionally handle the scarring results of the COVID-19 pandemic — such because the disruption to all ranges of schooling and weaker bodily capital accumulation by firms — which might drag down potential for long-term financial progress.
G20 members may additionally assist restructure the sovereign debt of much less developed and low-income nations by working by way of the G20 Debt Service Suspension Initiative and the Frequent Framework for Debt Therapy. Debt restructuring might assist much less developed and low-income nations avert debt misery and defaults amid the financial impression of inflation and the pandemic.
The G20 might additionally handle digital transformation challenges just like the exploitation of non-public knowledge, knowledge stewardship, cybersecurity, the digital divide in entry to and utilisation of the web and concentrated markets on this community economic system. These challenges should be addressed by way of correct worldwide requirements, norms and ideas earlier than it’s too late to bend the ethical arc of digital transformation in direction of the nice. The digital transformation needs to be extra seen in financial statistics, like productiveness and employment, to raised perceive its financial results.
A Roadmap Towards a Frequent Framework for Measuring the Digital Economic system, delivered underneath the Saudi Arabian G20 presidency in 2020, offered an agreed definition of the digital economic system and a set of indicators for measuring jobs, abilities and progress inside the sector. The roadmap must be prolonged to measure not solely the dimensions of the digital sector but additionally the results of digital transformation, together with its results on inequality, the surroundings, political stability, and shopper psychology.
Above all, Indonesia’s G20 presidency has the potential to revive confidence in multilateralism. Its presidency might assist defend the establishments that assist multilateralism by addressing institutional sclerosis within the World Commerce Group, reforming worldwide monetary establishments just like the IMF and World Financial institution and revamping the worldwide financial system. The G20 needs to be a convenor for sustained and structural reforms to world governance.
To maintain the G20 related, instances of disaster ought to function a wake-up name to deal with underlying structural points and keep away from a repeat of well being or financial crises. G20 members ought to proceed to debate matters of frequent curiosity and eschew being hijacked by any particular person member’s agenda.
Ambassador Triansyah Djani, Indonesia’s G20 Co-Sherpa warns that ‘if the G20 breaks up, all people will go unilateral. We wish to be sure that the G20 stays intact and continues to be the premier discussion board for worldwide financial cooperation that’s in a position to answer world financial challenges’.
India, which holds the 2023 G20 presidency, would be the subsequent host tasked with promulgating the consensus-based ideas and guidelines of the G20 to protect its unity and existence.
Maria Monica Wihardja is an Economist and Visiting Fellow within the Indonesia Research Programme and the Regional Financial Research Programme on the ISEAS–Yusof Ishak Institute, Singapore.
