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Tuesday, August 9, 2022

G20 Presidency 2022: Recover together and recover stronger

By Agustaviano Sofjan (*)

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In 2022, Indonesia is under the spotlight for G20. The Group of Twenty (20) is the premier international economic cooperation for addressing global challenges and concerns through collective actions. G20 brings together world’s major developed and developing economies with high economic power in terms of GDP nominal.

The climax of G20 Presidency will be during the Summit in Bali, Indonesia on November 15-16, 2022. State/Government Leaders from G20 members are expected to attend, including invited countries representing certain regions as well as leaders from various international organizations and other relevant stakeholders.

Why is G20 so important and strategic? G20 members account for over 80% of global GDP, 75% of international trade and more than 2/3 of the global population. G20 groups Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union.

G20 was created in 1999 in the wake of the Asian financial crisis, to unite finance ministers and central bankers from 20 largest established and emerging economies. Then a decade later in 2008-2009 at the height of the global economic crisis, G20 was elevated to include Heads of States and Governments.

From then on, G20 was no longer a financial and bankers forum only, thus becoming a global forum for discussing and finding solutions in the larger development context. G20 has two main work-streams: first, the financial track which is dealt by the Financial Ministers and Bank Governors; and second, Sherpa track are Ministers from Development aspects, Health, Energy, Trade, Industry, Environment, Labour, Education, Information and Communication (ICT), Agriculture and including Foreign Affairs.

The significance of the G20 Forum is not only for government high levels. The G20 Forum has engaged numerous groups with a purpose of reaching out and exchanging inputs from non-governmental sectors. B20 for Businesses, S20 for Science, T20 for Think Tanks and Research Centres, L20 for Labour, W20 for Women, Y20 for Youth, P20 for Parliament, and C20 for Civil Society. In addition, Indonesia has brought up SAI-20 for Supreme Audit Institutions to work within the framework of G20.

Indonesia’s Presidency is timely. Indonesia assumed its presidency during a challenging time when all countries are in the progress of recovering from the impacts of the Covid-19 pandemic and global uncertainties. Indonesia is the only member of G20 from ASEAN or the Southeast Asia region, playing a significant role in restoring global health and the economic recovery. More so, Indonesia is ranked 10th among the G20 countries in terms of Purchasing Power Parity and recognized as a New Established Emerging Market with GDP of over US$1 trillion.

This year is considered to be the momentum for recovery, and therefore Indonesia’s Presidency of G20 is not only critical but also timely to render contribution in encouraging cooperation post pandemic for the betterment of all countries.

Recover Together, Recover Stronger. This is the theme that Indonesia has chosen for G20 Presidency in 2022. The theme underscores Indonesia’s aims to invite the entire world to work together, support one another to recover together, recover stronger, and be more sustainable.

With this spirit Indonesia will continue to work closely with like-minded countries on enhancing economic development and stability in the region. Vietnam as Indonesia’s strategic partner in Southeast Asia would be a country of significant importance in achieving this pertinent purpose. Indonesia and Vietnam both comprise 60% of the population and 45% of the economy of ASEAN member countries. Consequently, the acceleration of their economic recovery would contribute and boost the stability and economic development of the entire region.

Three priority issues during Indonesia’s Presidency: Global Health Architecture, Sustainable Energy Transition, and Digital Transformation. The G20 Presidency amid a pandemic demonstrates a good perception of Indonesia’s economic resilience to the crisis. Furthermore, Indonesia can orchestrate the G20 discussion agenda in such a way that it supports and has beneficial impact on Indonesia’s as well as developing countries’ economic recovery.

Lesson learned from the impact of the Covid-19 pandemic endured by all countries has given the need to further explore a Pandemic Preparedness and Response (PPR) as resilient health systems. PPR is a global health architecture that includes financing future pandemics in the form of global health fund to aid countries experiencing crises. Currently Indonesia and Vietnam have a high rate of full vaccination, above 75% of its population.

With this high rate, it is hoped that the lives and livelihoods of the people will be improved, more robust and adaptive to the new normal. It would therefore be important for governments of countries in the region, including Vietnam to create employment opportunities for all, especially those who are most vulnerable to the impacts of the pandemic. The G20 Presidency of Indonesia will carry out discussions throughout the year to produce a policy that ensures business continuity, generates resilient, sustainable, and prosperous business innovation, as well as emphasizes entrepreneurship and MSMEs as key instruments in job creation. It is evident that MSMEs are the most impacted during the pandemic. Almost 90% of Indonesia and Vietnam’s economy are supported by MSMEs.

On energy transition, green economy and environmental sustainability – the G20 members accounted for 75% of global energy demand; hence, the G20 members have a strategic role and responsibility in supplying clean energy for the future. At the COP 26, Indonesia and Vietnam have pledged commitments on achieving net zero emissions. Vietnam by 2050, and Indonesia by 2060 or sooner. The pathways for net zero emission principles and strategies among others are: increasing new renewable energy consumption, carbon capture and storage (CCS) utilization, electric vehicles in the transportation sector, reducing fossil energy by carbon tax and trading. Countries, including Indonesia and Vietnam should enhance cooperation toward achieving the net zero emissions.

Another important lesson learned from the pandemic is the growing importance of digitalization. Digital economy will be the future. Businesses who survived the pandemic are those who are adaptive and innovative on digitalization. World Bank data shows that around 80% of MSMEs connected to the digital ecosystem are more resilient.

In this context, the G20 Presidency of Indonesia will also discuss agenda on preparing excellent human resources, including the empowerment of women, to encourage entrepreneurship in the future. The young generation needs to demonstrate these main prerequisites values such as high adaptability, driven, entrepreneurial mindset and integrity. Demographically, data shows that both Indonesia and Vietnam’s working force are dominated by the young generation. Digital transformation would include discussions on connectivity, digital skills and digital literacy, cross-border data flow and data free flow with trust.

With the enormous and significant strength of such a Forum, I believe that G20 can certainly become a global agenda setter. Indonesia’s G20 Presidency has come up with priority issues that are relevant and timely on global health issues, digitalization transformation and the energy transition. The working groups and Ministers level are still working at the Finance and Sherpa tracks in ensuring deliverables are to be adopted at the upcoming summit in Bali.

Development, prosperity and sustainability without peace in the world would not be achievable. The President of Indonesia has also invited the President of Ukraine to attend the Summit, and together with Leaders of G20 members are also expected to be present in Bali.

A forum which is inclusive with engagement groups, issues dealt are significant support to global challenges and opportunities. The G20 Presidency of Indonesia is expected to be a catalyst to inclusive global economy recovery that puts forward both public-public and public-private partnerships as well as policy innovations to support global economy recovery. Let us hand-in-hand make a better world. Recover Together, Recover Stronger!

(*) Agustaviano Sofjan is the Consul General of Indonesia in HCMC

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