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Indonesia to focus on economic recovery during G20 Presidency

Indonesia to focus on economic recovery during G20 Presidency

President Joko Widodo spoke at a G20 Summit's virtual meeting from the Bogor city-based Presidential Palace on Nov 22, 2020. ANTARA/HO-Biro Pers Setpres/aa. (Handout Biro Pers Setpres)

Indonesia will assume the Presidency of G20 in late 2021 for the first time since the forum was established in 1999. Indonesia was invited to join the forum in 2008.

Italy, the current G20 president, will hand over the presidency to Indonesia at the Rome Summit, which is scheduled on October 30-31, 2021.

Indonesia was elected to the G20 Presidency for 2022 during the G20 Summit in Riyadh, Saudi Arabia in November 2020.

It will hold the G20 Presidency, themed “Recover Together, Recover Stronger” to reflect the spirit of collective recovery, from December 1, 2021 till November 2022.

The Group of 20 or G20 is an international forum that brings together the world’s major economies. Its members account for more than 80 percent of global GDP (gross domestic product), 75 percent of global trade, and 60 percent of the population of the planet.

The G20 members comprise Argentina, Australia, Brazil, Canada, China, France, Germany, Japan, India, Indonesia, Italy, Mexico, Russia, South Africa, Saudi Arabia, South Korea, Turkey, the United Kingdom, the United States, and the European Union. Spain is also invited as a permanent guest.

In fact, Indonesia, the world’s fourth most populous nation, is the only ASEAN (Association of the Southeast Asian Nations) state that was invited to join as a G20 member.

To ensure the smooth and successful implementation of the G20 events that will be hosted by Indonesia next year, President Joko Widodo has issued decree No. 12 of 2021 on the National Organizing Committee (OC) of the Indonesian G20 Presidency.

The OC members include Coordinating Minister for Economic Affairs, Airlangga Hartarto, as chairman I of Sherpa Track; Minister of Foreign Affairs, Retno L. P. Marsudi, as chairman II of Sherpa Track; Minister of Finance, Sri Mulyani Indrawati, as chairman I of Finance Track; the Governor of Bank Indonesia as chairman II of Finance Track; Coordinating Minister for Politics, Law, and Security, Mahfud MD, as chairman of events; and Minister of Communication and Informatics, Johnny G. Plate, as chairman of communication and media for the G20 Summit.

Indonesia will have seven priority agendas for the finance track for Indonesia's G20 Presidency in 2022, according to Minister Indrawati.

The first priority is coordination on global policies to recover the economy, including on the exit policy to assist economic growth in each country, as well as globally, and at the same time, ensure that it becomes more sustainable, she said.

The second priority concerns the pandemic's impact on health and economic sectors, which has led to supply disruption and corporations hanging in balance, she informed.

The third priority is the central bank digital currency (CBDC), Indrawati said. Sustainable finance is fourth on the agenda and covers the roles of the financial sector in supporting important agendas at the global level, including climate change and green finance facility that is aimed to create green and sustainable economic transformation, she added.

The fifth priority is cross-border payment and will focus on taking advantage of the optimization of digitalization for boosting productivity, and at the same time, address the risks and challenges that may emerge, she disclosed.

The sixth priority is financial inclusion, which includes SMEs, focusing on the use of open banking to encourage productivity and supporting economic and financial inclusion, including in cross-border aspects, she said.

The seventh priority is the progress and implementation of global taxation principles, including the ones related to tax incentives, she added.

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"Indeed, this is one of the important priorities for Indonesia, which is currently carrying out tax reform," the minister said.

Meanwhile, as for national benefits, the G20 Presidency is expected to boost domestic consumption by up to Rp1.7 trillion, according to Minister Hartarto.

"Domestic consumption is estimated to reach Rp1.7 trillion, the gross domestic product (is predicted to) increase up to Rp7.47 trillion, and (generate enough) employment to absorb around 33 thousand workforce in various sectors," Hartarto said on September 15, 2021.

The minister remarked that the figures are expected to increase by 1.5 to twofold in aggregate as compared to that during the 2018 International Monetary Fund and the World Bank Meeting in Bali, as Indonesia has plans to organize 150 meetings during its one-year presidency.

In addition, the Indonesian government will also emphasize the importance of strong coordination among ministries and institutions and involvement in the 16 working groups as well as the involvement of non-governmental and civil society stakeholders in the 10 engagement groups.

Hartarto noted that the G20 Presidency will also support social development since it will provide Indonesia the opportunity to raise the topic of vaccine production and distribution.

"We continue to push for vaccines to become global public goods. We also encourage to ease accessibility of the vaccines for Indonesian people and low-income developing countries," he remarked.

During its presidency, Indonesia plans to hold a G20 Summit in Bali in 2022 under the strict implementation of health protocols.

The spokesperson for the COVID-19 Handling Task Force, Prof. Wiku Adisasmito, expressed optimism that the G20 events in Indonesia will run smoothly.

"Indonesia will host this prestigious event. Indonesia is responsible for this event, hence the government is trying to keep (COVID-19) cases stable," he said.

The government is focusing on achieving a mortality rate of less than two percent, active cases of less than 100 thousand, and a positivity rate of less than five percent, he informed.

"The government will continue to do its best," he said.

Indonesia has managed to reduce the daily confirmed COVID-19 cases by around 92 percent from the peak figure on July 15, 2021 during the second COVID-19 wave, which was recorded at 56,757.

At the G20 Health Ministers' Meeting held in Rome on September 5-6, 2021, several countries and international organizations lauded Indonesia for lowering its COVID-19 cases significantly and for its high vaccination rate, according to Health Minister Budi Gunadi Sadikin, who attended the meeting.

He thanked the United States, several European and Asian countries, as well as Australia for donating 40 million COVID-19 vaccine doses to Indonesia.

As of September 20, 2021, at least 79,657,762 Indonesians have received their first COVID-19 vaccine dose, while 45,224,650 people have received the second vaccine dose. Overall, the government is aiming to vaccinate at least 208 million people to build herd immunity against the virus.

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