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ndonesia, like other emerging economies, has large external financing needs to develop and modernize its economy. Unfortunately, a disorderly deleveraging toward the last three months of 2008 triggered a massive reversal of capital flow.

As global banks retreat into domestic lending and domestic financial markets, both the government as well as the corporate sector in Indonesia are put under increasing strain. Financing their activities has become more difficult, more uncertain and more expensive.

There are concerns as to how corporations will be able to roll over maturing debts in the coming months. In a nightmare scenario, this difficulty in accessing cross-border funding due to the drying up of foreign funds could lead to a massive financing shortfall, followed by a serious spiralling of corporate insolvency and wealth destruction.

It is, therefore, crucial that the IMF and Multilateral Development Banks (MDBs) be provided with enhanced financial resources, equipped with the flexibility and creativity to utilize all schemes to support emerging markets dealing with the base of the economic pyramid (BOP) and for budget support.

Without these, not only will the emerging markets face difficulties in addressing their internal problems, but also they would not be able to participate in the coordinated global efforts to provide governments' with budget stimulus.

The need for the MDBs to establish Global Expenditure Support Financing/GESF is critical to guarantee the coordinated global policy.

From our own perspective, it is important that the US and other rich countries provide leadership in breaking the liquidity trap and encourage the banking sector to resume lending both at home as well as in offshore markets.

Currently, barriers to free flow of capital seem to be rising. Global banks have told their corporate customers in emerging markets that there is pressure to focus credit on domestic customers.

As a result, some corporations in emerging markets may become casualties of this move toward financial nationalism.

The corporate sector in Indonesia obviously supports responsible lending practices, tighter lending standards, as well as efforts to improve financial regulation.

However, we are concerned with the attitude of the banks in the West to look inward and lean toward lending at home by indiscriminately withdrawing their offshore activities, so-called financial protectionism.

The Indonesian Chamber is hopeful that the commitment of the G20 Finance Ministers in their communiqu* last weekend could soon be translated into real action to help emerging and developing economies cope with the reversal in international capital flow.

Indonesia supports more trade rather than less trade. However, we are seeing today a real threat of an outbreak of protectionism, including financial protectionism.

There have been cases where our exports have been subjected to subtle protectionist measures by our trading partners, such as using health and safety standards to block the import of our products to their markets. We are also facing growing antidumping investigations as well as other claims, such as allegations of transhipment or violations of environmental standards etc.

Our exporters are facing an increasing number of inward-looking measures that are WTO consistent, but will effectively keep foreign products out.

The same exporters also have to face much tougher trade financing and a credit situation, which, if not solved immediately, could have dire consequences.

On the other hand, the Indonesian Chamber has received complaints from certain trading partners in regard to trade measures perceived to be import restrictive.

In our observation, economic nationalism is on the rise all over the world. Despite the rhetoric on the evils of protectionism, in a climate of rising public sentiment for curbing import to save jobs, some political leaders have started to blame free trade for various social and economic ills, while other leaders seem to be showing weakening commitment to free trade and globalization.

It is important that the United States keep to its commitment as the champion of open trade and business activities, including the financial sector, as opposed to sending confusing signals to the rest of the world.

To summarize, two engines of global growth, capital flow and trade, simultaneously continue to slump. The crisis began in the United States, but only international cooperation - and collective efforts - can get us to jump-start the global economy to a speedy recovery.

The G20 leaders must demonstrate leadership to keep trade open, for example by committing to use their actual tariff rates rather than bound tariff rates as reference.

They must also demonstrate their commitment to cross-border banking as opposed to encouraging a retreat into domestic lending.

They may consider the option of limiting the scope and time of some trade measures in the bailout/stimulus plans.

And finally, G20 leaders must also redefine the role/mandate of the IMF and World Bank in assisting cash-strapped emerging economies to meet their financing requirements. The leaders must make a clear deadline for the implementation of the reform agenda of these Bretton Woods institutions.

These institutions must also address "the stigma issue" of some countries in accessing their facilities due to their engagement in the past. The facilities should not be subject to conditionalities but instead should be supportive to national and regional-based facilities.