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A case for RI leadership in G20
There are many differing views at home on Indonesia’s engagement in the G20
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here are many differing views at home on Indonesia’s engagement in the G20. Some react with indifference, others are skeptical about the legitimacy and effectiveness of the G20 in discussing global problems. But, a growing number of people see the importance of the G20 and hope that Indonesia can fully engage and ensure that its people’s interests are taken on board.
President Susilo Bambang Yudhoyono has pointed out that for Indonesia, the G20 is the most strategic international forum to advance its national interests and take responsibility in addressing global problems. His proactive approach in the G20 has helped leverage the country’s leadership in the G20 on which the people should capitalize. After all, Indonesia actually plays a more important role in global affairs now than ever.
Under Yudhoyono’s leadership, Indonesia has achieved a high level of economic growth amid the global financial crisis and was the only G20 member country that reduced unemployment during that period. As a thriving democracy, Indonesia has shown resilience not only as an economy but also as a nation. The country has maintained a “free and active” foreign policy that reflects not only its concerns but also those of the emerging markets and developing countries.
Indonesia’s efforts to maximize its engagement in the G20 should begin by achieving domestic consensus on our economic diplomatic priorities. We should see the G20 as a new global reality and center of our focus. When asked what represented the greatest challenge for a statesman, ex-UK prime minister Harold Macmillan said: ‘Events, my dear boy, events,” and the big event today is the G20.
For the next decade or so, we may expect that discussions on global economic issues will shift to the G20 and we could also expect the G20 to encompass a wider agenda. As a permanent member of the G20, Indonesia cannot afford to miss this opportunity to leverage its international posture and project its diplomacy to better serve domestic and regional interests, as well as to articulate the voice of the developing world.
George Bernard Shaw once said: “The people who get on in this world are the people who get up and look for the circumstances they want, and if they can’t find them, make them.” Thus we should change our “passenger mentality” in responding to global economic circumstances. Indonesia’s engagement in the G20 has huge consequences because it puts it in the driver’s seat. The country no longer has the luxury of being a bystander and seeing itself as an “innocent victim” of global phenomena, blaming others for creating externalities that harm us. Indonesia’s engagement in the G20 can only be justified if it can encourage others to take on board its perspective and interests in the G20 to shape the future of the global economy and financial architecture.
As for implementation, the G20 principle of “leading by example” means that we should treat the G20 as the frontline battleground for our economic diplomacy since any agreement will have overreaching global influence. Given our level of institutional capacity, this actually sounds as more a challenge than an opportunity for us. Nonetheless, every great nation in history learned its trade through overcoming such challenges, and so does Indonesia.
The next question is what should be our focus in the G20? Currently, Indonesia is leading development and anticorruption initiatives in the G20 that clearly show the government’s priorities of accelerating development and fighting corruption.
But in a broader sense, the most urgent priority for Indonesia, and where it should take leadership in the G20 and “push forward or die trying”, is the reform of global economic and financial governance. For too long, various global institutions have been dominated by a group of aging economies, whose share in the world economy is becoming smaller.
The 2008 financial crisis, and the emergence of the G20 as the premier global economic forum, provides a once in a lifetime opportunity for emerging markets and developing countries (EMDCs) to raise their case to have a greater voice and representation in international financial institutions. It should be the priority for Indonesia and other EMDCs that the governance of global public institutions, such as the IMF and the Multilateral Development Banks, reflect the new constellation of the global economy. This would allow a new paradigm in the operation of the international financial system.
We cannot afford to see global institutions, with all their resources and institutional capacities to support global economic stability, unable to effectively deliver their mandates because of legitimacy and credibility problems due to imbalances in governance. Just as when we managed to use the 1998 financial crisis to reform our political system, Indonesia should use this crisis to reform global economic governance once and for all.
Indonesia should capitalize on its membership of the G20 to advance its national interests and global responsibilities. Its experience and viewpoint as an emerging economy provides a high degree of credibility for Indonesia’s calls for a fairer global order that supports more equitable solutions. We should seize this golden opportunity to take full advantage of our growing global importance, and the G20 is one forum that would allow us to advance this aim.
The author is the G20 desk manager at the Indonesia’s Finance Ministry and assistant Sherpa for Indonesia. The views expressed in this article are those of the author.
