The historic Group of 20 event on Nov. 15 and 16 in Bali has resulted in a very positive agreement in anticipating future world-economic conditions. The G20, which consists of 19 members and one European Union institution, is expected to play a real role in creating a new world-economic paradigm based on awareness of creating world peace and collaboration that benefits all parties without discrimination, and encourages a carbon-free green economy as an implementation of sustainable development.

The G20 meeting in 2022 is indeed taking place amid the conditions of a world that is trying to recover from the effects of the COVID-19 pandemic, which has destroyed the world's economy for the previous two years. The declining condition of the world economy was also exacerbated by the effects of Russia's war with Ukraine, which lasted a relatively long time, impacting on aggravating economic conditions for both countries that were directly involved in the conflict and those that were not directly involved, but directly affected. This situation is ultimately triggering widespread food and energy scarcity throughout the world; this situation triggers fears of a world-economic recession in 2023.

A glimmer of hope arose from the G20 meeting in Bali -- bearing in mind that the countries that are members of the G20 contribute 60 percent of the world's population, control 75 percent of global trade and contribute 80 percent to the world’s GDP. This means that the G20 has a very strategic role and is a key factor in creating a world economic order in accordance with the basic principles of recovering together and recovering stronger.

The G20 has so far contributed significantly to three important world agendas, namely: 1) encouraging world-economic growth and financial reforms after the 2008 global-financial crisis; 2) tax policy, namely by encouraging the exchange of information taxes to end tax evasion, which has been one of the problems in trade, especially countries that are members of the OECD; and 3) in managing COVID-19, including suspending foreign-debt payments for low-income countries; providing financial assistance in all activities related to managing COVID-19; reducing or eliminating import-tax costs for products that help in management of COVID-19; and reducing costs of vaccines, hand sanitizers, disinfectants, medical devices and medicines.

At the high-level conference that was held in Bali, there were three important issues on the main agenda, namely: 1) global health, 2) digital transformation, and 3) the food and energy crisis that is currently sweeping the world. The implementation of the three agenda requires intensive cooperation and collaboration between countries in the world, not unfair competition based on win-win ideology, and also not discrimination. As it is known, climate change is one of the main causes of global-food insecurity at this time; global climate change has triggered a decrease in production and crop failure in various countries, so that production has decreased drastically. The impact of this phenomenon is that as of October 2022, there are already 21 countries that have implemented export bans on food products in order to secure their country's domestic needs. This has disrupted the balance of supply and demand in the global market, which has also triggered an increase in world-food prices. The imbalance between demand and supply was also exacerbated by the prolonged war between Russia and Ukraine. In addition to these factors, the trigger for the increase in food prices also came from an increase in commodity prices since March 2022, which had an impact on rising fertilizer prices, thus triggering further increases in world-food prices. This is evidenced by FAO data showing food prices, vegetable oil and cereals in 2022 experienced the highest increase of 35.65 percent and 24.33 percent respectively, compared to 2021.

In anticipating world-food insecurity, the G20 must cooperate with various food-insecurity initiatives and prepare strategies to increase production capacity so as to reduce imports and increase food exports and control food prices to reduce inflation. In this case, there is a need for a global funding initiative in the food production sector to address future food challenges, including via efforts to: 1) promote a resilient and sustainable agricultural and food system; 2) promote agricultural trade that is open, fair, transparent and non-discriminatory to ensure the availability and affordability of food that benefits all parties; and 3) encourage innovative agricultural-entrepreneurship capabilities via the development of digital agriculture to increase the income of rural farmers and sustainable-agricultural development. Apart from that, it is also necessary to encourage the creation of competitive agricultural and fisheries human resources, encourage the use of technology, develop innovation capabilities, strengthen the food-logistics system, transform a sustainable-food system and increase the development of irrigation-system infrastructure.

To address global-health problems in the long run, it is very important that the G20 plays a role in helping low-income countries to further overcome the effects of COVID-19; continue the commitment to support all vulnerable countries to recover together, recover stronger; strengthen the Global Financial Safety Net; and encourage the Multilateral Development Bank to increase development financing to support economic recovery. One of the initiatives created is the donation of G20 members at their meeting in Bali in raising funds of US$1.4 billion, which can be used for managing COVID-19, which is currently incomplete due to financial difficulties. In addition, it is important to maintain and improve the long-term quality of the global climate by increased efforts to keep nature cleaner and reduce as much as possible the use of carbon-producing energy. So, it is very important for the countries that are members of the G20 to encourage efforts to reduce pollution, including by increasing the use of electric vehicles; the use of alternative renewable energy in all aspects of production activities; the use of solar energy, ocean waves and wind; and cooperation in sustainable-environmental preservation.

The COVID-19 pandemic has changed human behavior in business activities, including the increasing importance of digitalization in conducting business transactions both internally and externally between countries. Digital transactions will enable the transaction process to be implemented more effectively and efficiently in terms of faster time, less effort and lower costs. The G20 needs to support policies in mobilizing funding and finance for inclusive- and quality-infrastructure investment in various regions and cities, including digital-financial infrastructure; digital finance will enable lower transaction costs, apart from being paperless as well as supported by increasingly efficient and effective transaction speeds.

In the aspect of trade, it is necessary to encourage bilateral cooperation between countries by using local money as an instrument for business and investment transactions; the use of local money will reduce dependence on one particular currency, so that it is more protective against the effects of inflation originating from other countries (import inflation). In addition, it will enable the empowerment of the world's currencies as a transaction medium.

The G20 also needs to encourage countries in the world to carry out structural reforms at the country level, particularly in providing a conducive-investment climate, simple bureaucracy, trade administration, taxation, infrastructure and financial digitalization. This is important to do to accelerate the joint economic-recovery process, so that the recovery process can be implemented more robustly. It is important to implement structural reforms to improve investment prospects and attractiveness originating from abroad and the role of the private sector, namely related to sustainable-infrastructure development. In anticipating the long-term impact of COVID-19, it is necessary to further encourage the growth of the manufacturing sector, especially micro, small and medium enterprises, by paying attention to increasing the quality of human resources and the use of technology, both production technology to increase productivity and information technology to increase quantity and quality of marketing both domestically and to export destinations. Micro, small and medium enterprises of a very large number will enable them to contribute more broadly in increasing world-economic growth, as well as reducing unemployment by employment absorption, especially of workers with simple skills and low levels of education in developing countries.

Writer: Dr. Putu Ngurah Suyatna Yasa, S.E., M.Si

Universitas Warmadewa Denpasar Bali

Email: putusuyatna2963@gmail.com

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