Indonesia must reevaluate its G20 presidency's agenda as the COVID-19 pandemic's aftermath has not yet been fully resolved. Rising food, energy, and fertilizer prices are all effects of the conflict in Ukraine, and the G20 must act to address these global shocks.
The grouping has to deal with the possibility that US-China relations will deteriorate as a result of Nancy Pelosi, the speaker of the US House of Representatives, visiting Taiwan. Indonesia needs to put in even more effort while holding the G20 presidency to sort out this geopolitical mess.
In July 2022, Indonesia presided over the third meeting of Finance Ministers and Central Bank Governors and the second G20 Foreign Ministers Meeting. Despite the lack of a joint statement, Indonesia showed strong leadership. All G20 members showed up despite heightened hostilities resulting from the conflict between Russia and Ukraine. This demonstrates the confidence G20 nations have in Indonesia as a neutral chair as a result of its long-standing non-alignment foreign policy.
Countries discussed enhancing multilateralism and addressing the world food and energy crises at the G20 Foreign Ministers Meeting. The agenda included 23 bilateral meetings with Indonesia. Twelve negotiated paragraphs were delivered at the G20 meeting of finance ministers and central bank governors.
On topics like the creation of the Financial Intermediary Fund for Pandemic Prevention, Preparedness and Response to better manage upcoming pandemics and the OECD-G20 International Tax package to enhance the global tax system, significant agreements were reached. However, there was no agreement reached at the meeting on two paragraphs that dealt with the effects of the conflict in Ukraine. As a result, a Chair's Summary rather than a joint communiqué was made public.
Under the three priority agenda items for its G20 presidency — global health infrastructure, inclusive digital transformation, and energy transition — Indonesia is working to produce tangible results. Indonesia is currently concentrating on fixing the world's broken food supply chains. For the G20, achieving international cooperation on food security would be a significant accomplishment. Incentives for nations to be open about their national food reserves, the signing of a global food treaty, and even the establishment of international and regional food buffers are all examples of cooperation.
The G20 could strengthen already-existing mechanisms, like the Agriculture Market Information System introduced during the G20 presidency in 2011, as low-hanging fruit. Similar coordination between the G20 and the UN Crisis Response Group and Global Agriculture and Food Security Program could help those nations that experience severe food shortages during major conflicts.
The COVID-19 pandemic has left its mark on society, disrupting education at all levels and weakening corporate investments in physical capital, which could limit long-term economic growth. The G20 could address these effects.
Through the G20 Debt Service Suspension Initiative and the Common Framework for Debt Treatment, G20 members may also assist in restructuring the sovereign debt of less developed and low-income nations. With the economic effects of inflation and the pandemic, debt restructuring could help less developed and low-income countries avoid debt distress and defaults.
The G20 could also address issues related to the digital transformation, such as market concentration in this network economy, data exploitation, data stewardship, cybersecurity, and the digital divide in access to and use of the internet. Before it is too late to bend the moral arc of digital transformation in favour of the good, these challenges must be addressed through appropriate international standards, norms, and principles. The digital transformation should be more apparent in economic statistics like productivity and employment to better understand its economic effects.
Delivered in 2020 during Saudi Arabia's G20 presidency, A Roadmap Toward a Common Framework for Measuring the Digital Economy included a common definition of the term and a set of indicators for tracking employment, skill development, and sector growth. The roadmap needs to be expanded to account for not only the size of the digital industry but also the effects of the transformation, such as how it affects political stability, consumer psychology, inequality, and the environment.
Above all, the G20 presidency of Indonesia has the potential to reestablish trust in multilateralism. By addressing institutional sclerosis in the World Trade Organization, reforming international financial institutions like the IMF and World Bank, and modernizing the international monetary system, its presidency could help safeguard the institutions that support multilateralism. The G20 should serve as a focal point for long-term, structural changes to international governance.
Crisis situations should act as a wake-up call to address underlying structural problems and prevent the recurrence of health or economic crises in order to keep the G20 relevant. Members of the G20 should avoid being diverted by any one member's agenda and keep talking about issues of common interest.
Indonesia's G20 Co-Sherpa, Ambassador Triansyah Djani, issues a dire warning: "If the G20 breaks up, everyone will go unilateral." The G20 should continue to exist in its current form and serve as the leading platform for global economic cooperation in order to address current and future challenges.
The next host, India, will be tasked with spreading the G20's consensus-based principles and rules in order to maintain the group's cohesion and continued existence. India will also hold the G20 presidency in 2023.
Adapted from "What can we expect from Indonesia’s G20?"
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