G20 Committed to Strong & Resilient Economic Growth

Jakarta, InfoPublik – G20 Finance Ministers and Central Bank Governors Virtual Meeting was held on July 16-18 with main agendas include Global Economy and the G20 Action Plan in Response to the COVID-19 Pandemic, as well as G20 Finance Track Deliverables in 2020.

The world is still facing great uncertainty as global output is projected to fall by 4.9% this year, with gradual recovery will only come by next year. Both IMF and WB stated that the COVID-19 pandemic has had a major impact on global economy, with total losses estimated at US$12 trillion by the end of 2021.

Each country experiences a different level of economic impact due to COVID-19, of which those with weak economic fundamentals having the extra risk of debt crisis.

Despite the tremendous need for global financing in handling the impact of COVID-19 and economic recovery efforts, multilateral development organizations still have limitations in providing loans and grants.

G20 members alongside international institutions will maintain global cooperation in mitigating the impact of COVID-19, which includes the G20 Action Plan.

The overall fiscal support of all G20 countries reaches up to US$10 trillion, with focus on improving the health system, social security, increasing employment, and supporting business enterprises.

Efforts to recover the global economy must be even and coordinated, focusing on domestic policies to achieve a safe recovery, enhancing G20 collective policies in recovering the world economy, as well as seizing opportunities for future economic inclusiveness and sustainability.

"Even today, uncertainty looms regarding when the health and economic crisis due to COVID-19 will end. The pressure on global economy is a warning to us all—we have to respond quickly, accurately, and in a coordinated manner. G20 leadership is crucial in supporting the recovery of the world economy," said Indonesian Finance Minister Sri Mulyani Indrawati in a press release on Wednesday, July 22.

G20 countries submitted an update on their adopted policies in handling COVID-19 and recovering the economy. The process is expected to support economic growth that is resilient, sustainable, and inclusive.

G20 Finance Ministers and Central Bank Governors have also agreed on a number of deliverables as follows: “Enhancing Access to Opportunity” through “Menu of Policy Options on Enhancing Access to Opportunities for All” as a guide for countries in expanding access for vulnerable groups, women, and young people to bask in an all-inclusive economic growth.

In preparing the document, the Saudi Arabian Presidency had chosen three Indonesian policies: Smart Indonesia Card Program (KIP), Link and Match Vocational Education Program, and Ultra Micro Credits program (UMi) as case studies. A number of countries appreciated the UMi program, which has been supporting the commitment to empower women in inclusive economic policies.

G20 also appreciated the involvement of creditor countries through the implementation of the DSSI (Debt Service Suspension Initiative) to suspend debt payments for poor countries in helping them to respond to the crisis. As for international tax, the G20 encouraged the achievement of global consensus on handling digital tax challenges, including a review of the global implementation of the principles of Base Erosion and Profit Shifting (BEPS).

G20 also conveyed the important role of infrastructure development in accelerating economic recovery, including the use of technological innovation (InfraTech), increased private sector involvement, and the application of Quality Infrastructure Investment (QII) Principles. The QII principles include life cycle costs, integration of environmental and social interests, including women's economic empowerment, resilience building against natural disasters and other risks, and the strengthening of infrastructure governance.

This virtual meeting was led by the Finance Minister of Saudi Arabia, Mohammed Al-Jadaan, and was attended by the Finance Ministers and Central Bank Governors of all G20 countries, World Bank, IMF, and other international institutions as well as invited countries. The Indonesian delegation in this meeting was led by the Finance Minister and the Deputy Governor of Bank Indonesia.

Reporter: Isma

Translator: Wisnu Wardoyo