The Jakarta Post
Amid a global economic slowdown and concerns over protectionism, Indonesia is pushing for countries to work together to break trade barriers and achieve inclusive economic growth on the way to 2018.
On Sunday, in the first session of the G20 Summit in Hangzhou, China, President Joko “Jokowi” Widodo focused on pushing for a worldwide commitment for a more inclusive economic reform, as he reminded the forum of its target of securing additional global growth of 2 percent by 2018.
World leaders of major economies and some developing countries, like Indonesia, are at the annual economic summit, which is being held in China for the first time.
“G20 must enhance communications and avoid economic policies that create negative impacts and every economy must have a solid and inclusive growth agenda,” Jokowi said.
In 2014, the summit in Brisbane resulted in the countries’ commitment to add about 2 percentage points to world economic growth. Over the years, however, countries have shown sluggish performance in reaching the target amid a global economic meltdown, pushing countries to encourage domestic growth and shy away from vigorous international trade.
In Hangzhou, G20 countries are set to agree in a communique at the end of the summit that all policy measures — including monetary, fiscal and structural reforms — should be used to achieve solid and sustainable economic growth.
“We have to stick to that commitment, but at the same time, we also hope that any policy taken by [any] G20 nations should not be at the expense of others,” said Jokowi.
Jokowi also underlined Indonesia’s commitment to keep its economy open, competitive and inclusive, which he believed would contribute to the global economy.
He deemed the three main areas of cooperation of this year’s G20 — innovation, a new industrial revolution and the digital economy — as being very relevant because of the growing development of information technology.
As a leader of the country with the biggest Muslim population in the world that has realized the potential of sharia financing, Jokowi also promoted sharia financing as one alternative infrastructure financing scheme, alongside the more traditional schemes that involve multilateral financing agencies.
He also gave a similar argument he often used at home, that infrastructure development would indeed boost economic growth.
Foreign Minister Retno Marsudi earlier said that “We [all] have to stick to that commitment, but at the same time we also hope that any policy taken by [any] G20 nations should not be at the expense of others”. She said the idea should also be implemented in terms of trade.
“Having all the FTAs [free trade agreements] is OK, but another important [factor] is also to see fair trade in the world,” Retno added.
The summit will continue on Monday with four sessions, including a forum that will discuss matters outside the economy, like counterterrorism.
Jakarta will also raise the issue of combating corruption, as Retno has said any efforts to improve the economy would go back to square one if corruption remains rampant.
As Indonesia struggles to widen its stubbornly narrow tax base, the nation demanded healthy, fair and transparent taxation practices at the G20 ministerial meeting in Chengdu in July.
Last year in the Antalya G20 Summit in Turkey, Jokowi suggested to G20 leaders that the global financial architecture should be reformed to allow developing countries play a bigger role in international funding organizations.
Chinese President Xi Jinping warned at the opening of the summit about the danger of protectionism.
His warning on Sunday followed bilateral talks with Barack Obama that the US president described as “extremely productive”, but which failed to bring the two sides closer on thornier topics, such as tensions in the South China Sea.
With the summit taking place after Britain’s vote in June to exit the EU and before the US presidential election in November, observers expect G20 leaders to mount a defense of free trade and globalization and warn against isolationism.
The global economy has arrived “at a crucial juncture”, Xi said, in the face of sluggish demand, volatile financial markets and feeble trade and investment.
“Growth drivers from the previous rounds of technological progress are gradually fading, while a new round of technological and industrial revolution has yet to gain momentum,” he said.
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