Indonesia’s finance minister on the G20: Just don’t mention the war

Indonesia’s finance minister on the G20: Just don’t mention the war

There’s been plenty of those this year, including at the G20 finance and central bank governor meetings in Bali last week. Russia’s participation in that meeting prevented a formal communiqué at the end of proceedings, as it has at other G20 meetings this year.

The impact of the war has been dire, particularly on those countries Ms Sri Mulyani describes as “innocent bystanders”, which have no direct stake in the conflict and may not have signed on to the economic sanctions backed by G7 nations.

In some developing and middle-income countries, the combination of soaring energy and food prices, has derailed the faltering post-pandemic recovery. “Many countries are already fragile. Now they have to face the effects of this war on strategic commodities. This can lead to financial crises and political crises. It is a very dangerous situation.”

By last week’s meeting, the third finance meeting this year, the host nation had settled on the rules. All members can have their say about the war, but then they have to get back to business. Last weekend, that included setting up frameworks to evaluate the food needs of poorer countries and then matching these with appropriate help, as well as advancing debt relief discussions.

“We are the finance track. If they want to talk about the war, there are other platforms: NATO, the G7, the UN Security Council. So, I remind them, it’s agreed that each can make a statement about the war, and then we are going back to the main game.” Ms Sri Mulyani said.

“If we can’t get full agreement, only a nuanced agreement, that’s okay. We all know what is good for the world. And Indonesia, with this presidency, we will relentlessly, continuously and repeatedly use the G20 as the premier platform for economic collaboration and co-operation.”

Indonesia, South-East Asia’s largest economy, is uniquely qualified to lead the G20 at this difficult time due to its size, legitimacy and its tradition of non-alignment, according to Peter Drysdale from ANU’s East Asia Forum.

Few would argue Ms Sri Mulyani, a former World Bank managing director who first served as Indonesia’s finance minister from 2005 to 2010 and was reappointed in 2016, is well qualified to wrangle the finance track.

“Sri Mulyani is key to the effectiveness of the ‘gang of four’ ministers who are coordinating Indonesia’s management of the G20 process and has the capacity to help President Joko Widodo lift Indonesia to a whole new level of engagement in global affairs,” Mr Drysdale said.

Last year Forbes included her in its list of the world’s 100 most powerful women. She says she had drawn on experience gained in the 1990s when she was involved in Indonesia’s negotiations with the IMF. Other formative experiences including coping with the aftermath of the 2004 Indian Ocean tsunami, and charting a course out of the 2008 global financial crisis.

“Those experiences helped me over the weekend. What also helped is that every member made it clear they supported Indonesia’s presidency. The more you can provide a dialogue that is seen as fair, people will operate at an appropriate level – no matter how strongly they feel about a particular issue.”

“We focus on not getting provoked. On remaining calm. When people get emotional, we provide a break. If you want to walk out, it’s okay for you to walk out, and then we will return to the discussion.”

But there will be no agreement on how to address the root cause of much of the world’s economic pain until there is an end to the war in Europe.

“We cannot separate the war and the sanctions. The country that is perpetuating the war says the sanctions are making conditions worse. The ones that are deploying the sanctions say they are doing so because of the war.”

The economic fallout from the sanctions is precisely the outcome desired by the US and other nations that have signed on to the sanctions, Ms Sri Mulyani observes.

“The best option is for both sides to stop.”

Until that happens, every G20 meeting is likely to end without consensus.

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