Jakarta, The Indonesia Post – The weather in Washington DC, United States, which has been sunny for several days, suddenly became cloudy on Thursday (13-10) on the sidelines of the 4th Meeting of the G20 Finance Ministers and Central Bank Governors (FMCBG).
The cold and windy weather ahead of the fall seems to signal global conditions in 2023, which will be full of uncertainty and the situation will be more challenging.
The cause is none other than the geopolitical conflict in Europe whose impact is disrupting supply chains as well as rising energy and food prices and causing global inflationary pressures.
Conditions that threaten the world in a recession are reinforced by the latest International Monetary Fund (IMF) report which states that the global economy will slow down to 2.7 percent in 2023, or decreased 0.2 percent compared to the outlook in July 2022.
Minister of Finance Sri Mulyani Indrawati who was also the leader of the meeting said that this challenge cannot be faced by countries individually because it requires multilateral cooperation, especially the G20 which has an influence on 85 percent of the world economy to find joint solutions.
A number of finance ministers and G20 central bank governors attended in-person meetings that have been held for four times at the G20 Indonesia 2022 Presidency to formulate a number of views.
The meeting which was attended by 66 leaders in person and four people virtually also invited the Minister of Finance of Ukraine, which marked the 3rd invitation to be held during the Indonesian Presidency.
Sri Mulyani acknowledged that the diversity of G20 members is a dynamic that can hinder understanding in responding to global issues, although this can also be a common strength.
“We certainly have differences in position, benefits and experience in various ways, but these differences can allow for the search for the best solutions that are inclusive for the world,” she said.
The differences in the meeting did not cause the deadlock of the FMCBG forum considering that the meeting resulted in several agreements on macro policies at the G20 Chair’s Summary, although not in the form of a more binding communique.
The summary emerged from six discussion agendas such as the global economy, international financial architecture, financial sector regulations, sustainable financial infrastructure investment, and international taxation.
One of the results is the continued strengthening of macro-policy cooperation, maintaining financial stability and fiscal sustainability in the long term and preparing cushions to reduce the risks and negative impacts of spillovers.
In addition, macroprudential policies in G20 countries also need to be strengthened to anticipate possible systemic risks in line with conditions of strengthening liquidity.
Related to this, Sri Mulyani ensured that the various policy responses that were launched must also be described in a specific, clear, coordinated and well-communicated manner so that the message can be conveyed.
“Global challenges also require cooperation and synchronization of the macro and fiscal policy mix as well as policy instruments to address common problems and support economic recovery effectively,” she said.
Togetherness
On the same occasion, Governor of Bank Indonesia (BI) Perry Warjiyo ensured that the G20 Indonesia Presidency had voiced the importance of cooperation and understanding in the midst of various risks that could disrupt the potential of the world economy, because much progress had been made.
“Togetherness in the G20 is important because the handling of global macroeconomic policies is currently showing a lot of progress, especially for risk mitigation in the financial channel,” he said.
Several efforts in the financial channel will continue to be made, including through coordination of macro and monetary policies that will continue to be carried out to prevent a weakening economy that is not accompanied by price increases or inflation that can burden the public (stagflation).
Based on the G20 Chair’s Summary, the central bank also agreed to continue to monitor food and energy price pressures and continue to strengthen monetary policy based on data, clearly communicated, inflation expectations to maintain recovery momentum and impact on various countries.
The many points of agreement in the FMCBG show that the Indonesian G20 Presidency has succeeded in helping to maintain the integrity of the G20 as a global forum in formulating economic and financial policies.
The FMCBG meeting is also an important point in the agenda of Indonesia’s chairmanship in ASEAN in 2023 so that regional countries can realize economic and financial resilience, promote payment connectivity to encourage financial inclusion as well as financial transactions and investments in local currencies.
Not only that, the G20 Presidency of Indonesia has also succeeded in overseeing economic recovery during the COVID-19 pandemic in accordance with the tagline recover together, recover stronger, which is a message for the world to recover quickly with the spirit of togetherness.
In addition, the diversity of culture, culinary, and MSME products shown by Indonesia during the G20 Presidency in 2022 has given good memories and impressions.
BI Deputy Governor Dody Budi Waluyo said most of the participants of the FMCBG meeting saw Indonesia’s G20 Presidency as something positive because it was able to provide its own uniqueness.
Even on the sidelines of the FMCBG meeting, the participants received authentic Indonesian culinary dishes in the form of Nusantara rice, which included Nasi Uduk, Grilled Chicken, Tempe Bacem, and Pepes Mushroom.
“This light testimony serves as a counterbalance to the discussion of a fairly harsh substance, meaning that the members feel that this is a positive point of the G20,” he said.
Overall, Indonesia as the holder of the G20 Presidency in 2022 has sought to transmit the spirit of cooperation, collaboration, and mutual consensus that are beneficial for finding solutions to overcome global issues in the context of a multilateral spirit.
Previously, the 1st FMCBG meeting at the G20 Indonesia Presidency took place in February 2022 in Jakarta, the 2nd meeting in April 2022 in Washington DC, USA, and the 3rd meeting in July 2022 in Nusa Dua, Bali.
Indonesia’s G20 presidency will end after the G20 leaders’ summit in November 2022 in Nusa Dua, Bali. After that, India won the trust to hold the next G20 chair in 2023. (mhn/bbs)
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