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RI to propose global financial safety net in G20 summit
The worldwide impacts of the financial crises in the US and Europe have inspired Indonesia to propose the establishment of a global financial safety mechanism in the upcoming G20 summit, a senior official says
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he worldwide impacts of the financial crises in the US and Europe have inspired Indonesia to propose the establishment of a global financial safety mechanism in the upcoming G20 summit, a senior official says.
Deputy Trade Minister Mahendra Siregar told reporters Friday that developing economies would need to access special financial facilities in order to cope with the impacts of a global economic crisis.
He said countries such as Indonesia, due to their rapid economic expansion, could no longer access multilateral loan facilities available to less developed countries.
"The emerging economies need a global safety net not just to resolve problems related to the balance of payments but also to address challenges within a state budget hampered by a crisis," he said.
Mahendra said a financial facility would help emerging economies fulfill their role as the engine for global economic growth amid a period of uncertainty about the recovery of US consumption and austerity measures implemented by European countries.
President Yudhoyono, he said, would request G20 leaders gathering in Toronto, Canada, from June 26 to 27, consider a mechanism for a global financial safety net.
The Toronto meeting is the first for G20 member countries after the forum of economies was declared a premier forum for the economic cooperation by their leaders during the Pittsburgh meeting in September 2009.
Yudhoyono will also call for the completion of the Doha Round negotiations, Mahendra said.
"The completion of the Doha Round negotiations would mean the establishment of an international trade arrangement that could serve as an alternative source for global economic growth," he said.
The Doha Round, which started in 2001, aims to correct some of the imbalances in the global trading system by laying down a multilateral deal on tariffs, as well as other measures.
Under the current draft, rich countries would lift barriers to their food markets and cut trade-distorting farm subsidies while developing countries, excluding the poorest, would open their markets to more products and services.
An agreement on an overall package has proved elusive, with the United States arguing that big emerging economies such as Brazil, China and India should do more to facilitate a deal.
Mahendra said the development issues would also be presented by President Yudhoyono in the Toronto meeting.
"Indonesia expects increased attention from the G20 forum on development issues both in addressing global crises as a short target to be resolved and in accelerating development for better prosperity for developing countries in the long term," he said.
He said developing countries were typically most severely affected by global economic instability because they lacked a strong social safety net.
"A global crisis creates more severe damages in developing countries than in developed countries, which have better social safety nets," he said.
Moreover, he said, the global crisis had hampered a global shared commitment in addressing the development agendas. "I hope the G20 forum can underline a strong political will for the implementation of the previous summit's decisions, leading to a sustainable global recovery," he added. (ebf)
