Escalation of the trade war between the United States and China has disrupted global financial market and brought on a setback in international free trade. A number of countries have fallen victims such as Turkey and Argentine.
Indonesia`s currency rupiah has lost much of its value against the U.S. dollar forcing the government to slap restriction on imports of various consumer goods and to put a brake on infrastructure development.
International trade has suffered big setback with protectionism marked with the imposition of high import tariffs that led to trade war.
The global market and economy are beset by uncertainties that forced many countries to resort to monetary tightening. Gloomy future forces world leaders to address their respective domestic economic problems, how to weather the uncertainties brought about by the trade war. There are no more world leaders concerned with the common interest of saving the world from the threat of what President Joko Widodo called the "evil winter".
Finance Minister Sri Mulyani Indrawaty at a meeting of the World Bank Committee here last weekend said international trade is important to improve the quality of economic growth, create new jobs and sustainability.
Escalation of the trade war between two world economic giants, the United States and China brought about global economic uncertainties, pushing emerging economies to the brink of bankruptcy. Developing economies including Indonesia are the hardest hit by the trade row.
IMF has even downgraded its projection of global economic growth rate by 0.2 percentage point to 3.7 percent in 2018 and 2019 lower than estimate in July.
President Joko Widodo (Jokowi)addressing the opening of the annual meeting of IMF and WB here on Friday last week, called on world`s policy makers to put an end to policy that would lead the world to gloomier future, after 10-year endeavor to free the world from the threat of global depression.
Danger of evil winter is not a false threat, Jokowi reminded the world economic and financial policy makers at the big international meeting.
President Jokowi described the present global situation as portrayed in the serial film of Game of Thrones with big power rivalry that would only end in global depression besetting not only the loser but also the victor. What is good being the world`s most powerful amid sinking world?
Ten years ago the world worked together to wriggle out of global financial crisis. The destructive storms were checked with bold fiscal and monetary measures that need extraordinary courage by world leaders. Policy makers raked their brains to save the world from sinking deeper in the mire of disputes.
However, today the world sees itself being driven by egocentrism closer to greater uncertainty that could bring about a scene of destruction and frustration.
Calls are growing for an end to egocentrism . Finance Minister Sri Mulyani Indrawati asked advanced nations and world economic big powers like the United States and China to come to negotiation table seeking solution to the trade dispute.
The tension receded when the United States gave signals that it is ready to discuss renewal of trade agreement with its main trading partners - Mexico and Canada in North American Free Trade Agreement - South Korea, the European Union and Japan.
Sri Mulyani said the United States is expected to give similar signal to continue negotiations with China to sort out the bilateral trade row.
Christine Lagarde, a French lawyer and politician who is now IMF Managing Director, said escalation of trade war could result in a slashing of one percentage point in the Global Gross Domestic Product (GDP) in the next two years.
For mutual interest all countries in the world need to ease the tension as a result of protracted trade war and at the same time reform the global trade system toward the creation of just and fairer trade .
Lagarde said all countries need to work together to sort out problem in world trade and gave stress on consistency in structural reform.
The meeting of Finance Ministers and Central Bank leaders of the G20 countries also ended with strong call for cooperation in international trade to save the world from being mired in trade frictions.
"We agree that international trade is very important as growth engine. Therefore, it is necessary to ease the tension that would turn out negative sentiment to the market and increasing financial uncertainty," said Argentina Finance Minister Nicolas Dujovne who chaired the meeting held on the sidelines of the IMF-WB annual meeting.
Cooperation between the G20 countries is a key to maintaining global financial stability, Dujovne said addressing the meeting which was attended by 20 Finance Ministers and 17 Central Bank Governor from the member countries.
The result of the Bali meeting would be brought to the G20 Summit Meeting scheduled to be held on 30 November-1 December 2018 in Buenos Aires.
Meanwhile, World`s Central Bank leaders who met on Sunday also discussed steps to be taken in facing the global economic uncertainty and to ward off the impact of trade war on the global financial market.
Indonesian Finance Minister Sri Mulyani said the country`s economic growth could be hampered with potential global economic slowdown in 2018 and 2019.
Developing economies are feared to go downtrend either because of disrupted international trade and more expensive cost of fund.
Sri Mulyani said if Indonesia could keep the pace in invest growth, the country`s economic growth could be maintained, but if exports failed to grow as expected the growth could be slowed.
Reporting by Ahamad Buchori
Editing by Albert Saragih