Indonesia took the reins from Italy to assume the G20 Presidency in 2022 at the 16th G20 Summit in Rome, Italy, on October 31, 2021. The Indonesian presidency was announced during the G20 Summit in Riyadh, Saudi Arabia, in November 2020.
Indonesia will hold the office for the first time since the multilateral forum was founded in 1999. It is the only Southeast Asian nation ever to become a G20 member and will be the first country in the region to host the prestigious summit.
The G20 was established to bring together the world's major developed and emerging economies, to solve the global economic conditions hit by the global financial crisis in 1997-1999.
Together, G20 members represent more than 80 per cent of world GDP, 75 percent of international trade and 60 percent of the world population. As the premier platform for international economic cooperation, there are high expectations for the G20 to spearhead the global recovery, addressing the world challenges, and play a critical role in creating an enabling environment for inclusive global growth and development.
As part of the G20 decision-making process, working groups of experts and relevant ministries under the Sherpa Tracks lead in-depth analysis of internationally relevant issues to provide recommendations on the G20 agenda and priorities. As trade and investment are vital to global economic growth and increased employment, the G20 Trade and Investment Working Group (TIWG) was established in 2016 during the China presidency. The TIWG addresses the major issues related to trade and investments and strives to coordinate the actions of the G20 countries to strengthen trade and investments worldwide.
This year, Indonesia proposed adding industrial issues to the TIWG to become the Trade, Investment, and Industry Working Group (TIIWG). The TIIWG theme at the 2022 G20 Forum is "Collective Economic Recovery: Aligning Trade, Investment and Industry Agenda with SDGs". The Directorate of International Trade Negotiation, the Ministry of Trade, co-chairs the working group with the Ministries of Investment and Industry.
We were honoured that the Director-General of International Trade Negotiation, Mr Djatmiko Bris Witjaksono, accepted us amid his hectic schedule on Monday (17/01), to discuss the importance of Indonesia's G20 Presidency for the benefit of the Indonesian people and the international communities.
Q: What does it mean for Indonesia to hold the G20 Presidency, especially during the pandemic recovery time?
A: Indonesia's G20 Presidency marks an important milestone for emerging countries to begin the succession of hosting G20 summits. Garnered by the trust to lead an elite club of the world's largest economies while the world is still grappling with the devastating impacts of the COVID-19 pandemic shows appreciation and recognition for Indonesia's resilience in facing a crisis.
Despite the current growth we are seeing in many parts of the world, the global economic recovery is uneven and remains subject to downside risks. Unequal vaccination rates across countries can also contribute to the risks of uneven recovery.
Holding the G20 Presidency means that we have the privilege to shape international policies to catalyse sustainable and inclusive recovery and growth, representing interests within and beyond its member countries, including developing countries, small island economies, and the vulnerable. We must ensure that no countries are left behind in this pandemic recovery time, as encapsulated in our presidency theme of "Recover Together, Recover Stronger".
In this G20 Presidency, Indonesia calls upon the nations worldwide to make a joint effort, working hand in hand, supporting each other to recover together, growing stronger and sustainably.
Indonesia's G20 Presidency allows us to show our leadership in international diplomacy as a 'bridge builder' and as 'part of the solution' to promote partnership and create an enabling environment in strengthening global economic governance and contributing to the world economic recovery.
As stated by our President, H.E. Joko Widodo (Jokowi), Indonesia set three main pillars for its G20 Presidency in 2022, comprising the global health architecture, digital and economic transformation, and energy transition, which are essential in realising the equitable global economic recovery.
Indonesia's G20 presidency is also expected to strengthen our synergy in trade, investment and industry to support our country's economic recovery.
Q: What would be the benefits for Indonesia by holding the G20 Presidency, especially in trade and investment?
A: The implementation of Indonesia's G20 Presidency this year is expected to provide us with significant benefits in economic, social, and political aspects.
Based on the Ministry of Finance's estimation, we hope for an additional IDR 7.4 trillion to the national GDP by organising more than 157 G20 meetings. We also expect an increase in domestic consumption by up to Rp 1.7 trillion ($119.2 million) from government and G20 delegations spending, involvement of MSMEs and the local economy, and absorption of 33,000 workers in various sectors (committees, personnel, and others).
On the political aspect, Indonesia's G20 Presidency will put Indonesia in the world spotlight and be a good branding opportunity. In the long term, it will increase international confidence toward Indonesia, which will encourage investment commitments from G20 members, international organisations and global communities.
Q: What are the Trade, Investment and Industry Working Group agendas led by the Ministry of Trade to implement Indonesia's G20 Presidency's three priority topics in promoting national and other developing countries' interests?
A: We must encourage policy changes in the trade, investment and industrial sectors to catalyse economic recovery. The recovery process should align with the G20 commitment to contribute to global efforts in achieving the Sustainable Development Goals by 2030. This commitment will be the foundation for policy changes in trade, investment and industrial that we will determine together.
Therefore, in collaboration with other G20 member countries, Indonesia will endorse the mainstreaming of trade, investment, and industrial policies and agendas to achieve the SDGs.
We will raise six agendas during the TIIWG meeting this year. The following four TIIWG agendas directly implement the three main pillars of Indonesia's G20 Presidency.
First, Trade, Investment and Industry Response to the Pandemic and Global Health Architecture supports the first pillar of the President's directive on global health architecture. The trade aspect supports the multilateral trading system for patents and distribution of vaccines and medicines (TRIPS waiver). The investment aspect will include increasing investment in the health sector.
Meanwhile, the industry focuses on scaling up vaccine production. This agenda will support the achievement of SDG 3: Good Health and Well Being.
We will continue to seek equal access to COVID-19 vaccines for all countries, particularly by encouraging the emerging economies to establish vaccine production and distribution hubs. In this case, Indonesia has the capacity in the pharmaceutical sector.
Second and third, the Digital Trade and Sustainable Global Value Chains (GVCs) and the Industry 4.0 for Sustainable and Inclusive Industrialisation will support the second pillar of the President's directive, digital economic transformation. The trade aspect will focus on digital trade and its rules and digital trade facilitation cooperation, such as implementing cross-border paperless trade to increase the participation of Micro, Small and Medium-sized Enterprises (MSMEs) and women-led businesses in GVCs.
The industrial aspect plays a role in implementing Industry 4.0 in the industrialisation process. This priority issue supports the achievement of the SDG 5: Gender Equality, SDG 8: Decent Work and Economic Growth, and SDG 9: Industry, Innovation and Infrastructure.
Fourth, Sustainable Investment supports the third pillar of the President's direction in investment that encourages the use of new and renewable energy. We need to facilitate a sustainable flow of investment to promote sustainable industrialisation to support value-added exports in the end. Products resulting from this sustainable investment and industry will be exported to partner countries. This priority issue supports the achievement of SDGs 8: Decent Work and Economic Growth and SDG 17: Partnerships.
In addition to the above agendas, Indonesia will raise two priority issues that have not been resolved in this working group: WTO Reform and Contribution of Multilateral Trading System to the Achievement of SDGs.
The Ministry of Trade will chair the TIIWG G20 meeting and strive to make this common interest acceptable to all G20 delegates and agreed upon by all G20 trade ministers.
Q: How the MoT will approach the implementation of the mandates?
A: The pandemic has made us all realise the importance of strong coordination at the global level and multilateral cooperation in overcoming the pandemic.
Ministers in the health and finance sectors continue to make joint commitments to issue policies in overcoming the pandemic. However, this has yet to be seen in the trade sector, including how to reach an agreement among WTO member countries regarding commitments to adjust trade rules for equitable access to vaccines.
The world community is now looking forward to the contribution of trade in supporting the pandemic and economic recovery as trade should function as one of the driving forces for economic growth and prosperity.
We need to build convergent understanding to restore the trade function and address the issues to strengthen global trade rules. Through the TIIWG, we will underline the vital role of trade in achieving the SDGs, the importance of sharing responsibility and building more trust among countries in the G20 and the WTO, and call for cooperation from all nations to accelerate inclusive and sustainable economic development recovery. We will discuss this interest with all member countries, stakeholders and international organisations and underscore that this is an important and urgent issue.
We need to come back to trade. We need to come back to our commitment to achieve the SDGs.
Q: What will be the possible challenges the G20 countries face in the trade, investment and industry to recover from the global pandemic?
A: The main challenges we face are structural problems that we have been dealing for a long time, even before the COVID-19 pandemic.
First, the multilateral trading system does not work properly, which is marked by the weakening of the three functions of the WTO. Those are: decreased relevance of the WTO as a forum for negotiating and making multilateral trade rules; ineffectiveness of the WTO in enforcing rules and monitoring member country policies; and the dispute resolution procedure (Appellate Bodies) is not fully functioning.
Second, today the global community faces three coinciding disruptions: pandemic and humanitarian disruption, digital and technological disruption, and climate change disruption. It takes enormous resources and attention to tackle these three layers of problems.
Trade, investment and industry must be part of the answer. Indonesia, through the G20 Presidency, has the opportunity to take the lead in setting the agenda and commitments at the global level in this regard.
All countries should reap maximum trade, investment, and industry benefits for an inclusive and sustainable economic recovery.
Q: How can ARISE+ Indonesia's technical assistance fit into the G20 agenda in trade and investment?
A: Since 2019, ARISE+ Indonesia has supported the Ministry of Trade and other relevant ministries/agencies in capacity building on issues related to international trade negotiations, including conducting reviews and studies needed to support negotiations.
I think ARISE+ Indonesia can also support Indonesia's G20 Presidency, especially in the TIIWG working group, by conducting analysis or studies to underpin narratives and consensus of priority issues promoted by Indonesia. These studies and analyses should be strengthened by valid data to get endorsement from all G20 member countries.