Andi Kristian (0606078746),
Citra Karina (0606079130),
Fernandes Raja Saor (0606079553),
Jeska Daslita (0606079881)
Vita Alwina (0606081154)
October 19, 2009
G20 Meeting. Economy Development
October 19, 2009
The facts and the background of G-20 are:
1. The membership on G-20 is G-7, Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Republic of Korea, Russia, Saudi Arabia, South Africa, Turkey, and European Union. Besides that, IMF and World Bank present in ex-officio basis dan fuction as resource person to several economic and financial isues.
2. The G-20 (more formally, the Group of Twenty Finance Ministers and Central Bank Governors) is a group from 19 of the world's largest national economies, plus the European Union. The G-20 is a forum for cooperation and consultation on matters pertaining to the international financial system.
3. Some issues which come and relate to the G20 membership are: (i) the absence of non G-7 European Countries. European Country non G-7 tidak adanya negara Eropa non-G7 (solved by entering EU to the G-20), (ii) the minimum representation of Africa (G-20 is the financial system forum not development forum), and (iii) the membership of Indonesia which experiencing political instability and economic depression after financial crisis (but strong support from some countries especially Japan and Austalia has secured Indonesia position in G-20 forum as the only representative of Southeast Asia (ASEAN)).
4. The agreement to coordinate global economic strategies in the midst of a critical transition from crisis was one of the most impressive achievements by the G-20 in Pittsburgh. In the agreement, the 20 countries’ leaders pledged:
a) To launch a framework that lays out the policies and the way we act together to generate strong, sustainable and balanced global growth.
b) To make sure our regulatory system for banks and other financial firms reins in the excesses that led to the crisis.
c) To reform the global architecture to meet the needs of the 21st century.
d) To take new steps to increase access to food, fuel and finance among the world’s poorest while clamping down on illicit outflows.
e) To phase out and rationalize over the medium term inefficient fossil fuel subsidies while providing targeted support for the poorest.
f) To maintain our openness and move toward greener, more sustainable growth.
5. Finally, The G-20 agreed to meet in Canada in June 2010 and in Korea in November 2010. The G-20 will be expected to meet annually thereafter and it will be held in France in 2011.
Do research on the achievement of the recent G20 meeting that relates to governance law and law enforcement in relation to the global economic crisis? What is the benefit of the G20 meeting result for Indonesia?
III. The Relation of The Rules and Facts
1. Leaders’ statement on the Pittsburgh Summit, September 25-26, 2009;
2. United Nations Conference on Trade and Development (UNCTAD);
3. United Nations Convention Against Corruption (UNCAC); and
4. United Nations Framework Convention on Climate Change
Indonesia has successfully navigated the global financial crisis. It has been recorded as one of the world’s highest growth rates country, has been one of the world’s top performing stock exchanges, has managed to reduce inflation and interest rates, has increased foreign exchange reserves, and has managed to achieve foreign exchange stability. Over this period, especially in 2009, Indonesia held free, fair and non-violent general and presidential elections, has continued with domestic reforms, and has made inroads to combat corruption. The G20 has played a key role in supporting Indonesia’s success story, and this underlines the importance of G20 as the globe’s most representative and influential grouping of countries.
There have been many lessons learnt from our global financial crisis experiences and the role of the G20. The G20 acted quickly and in a coordinated fashion. These are the two key lessons from our experience of the global economic crisis and future crisis — to be effective the G20 needs to act proactively and to collectively. Indonesia was quick to support and push the case for counter-cyclical financial and economic measures. The G20 meetings at Sao Paulo, Washington and London supported this approach and the membership placed its combined might behind the push for appropriate and responsible counter-cyclical measures. The G20’s efforts in this area have bolstered consumer confidence, which as we have seen in Indonesia, was one of the key reasons we have maintained our positive growth results.
The G20 also rightly argued the central role of international financial institutions in combating a global financial crisis, which leads to the second lesson learnt. International Financial Institutions, Multilateral Development Banks and Regional Development Banks must be able to provide targeted and adequate assistance when it is most needed. The G20 was pivotal in supporting the push for a recapitalization of MDBs, RDBs and the IMF. G20 support has helped these institutions partly offset the lending gap, and to provide targeted lending in support of sustainable counter-cyclical efforts. These lending efforts must be in support of balanced, equitable and sustainable growth.
We must ensure that the international financial institutions remain nimble enough to respond to crisis in a timely fashion, which leads to the fourth lesson learnt. International Financial Institutions, Multilateral Development Banks and Regional Development Banks must have governance mechanisms that reflect fully international best practice and hold the management boards accountable for the IFI’s performance. The G20 also correctly identified the urgent need for financial sector reform as another lesson learnt from the crisis, and collectively we continue to work on initiatives in this area to ensure the global economy has prudent financial monitoring mechanisms and that we do not see a return to the lax practices of the past. We simply cannot afford a return to ‘business as usual’. The last significant lesson, a lesson learnt from earlier crisis, is that in all of these activities we must not lose sight of the need for an exit strategy. The Pittsburgh summit could give more thought to how these considerations may help part a forward path for the G20. Besides that, the benefits of Indonesia participation in G-20 are:
1. Indonesia become the new member of Financial Stability Forum (FSF) which is the standard setting body for the financial system;
2. Indonesia get Deferred Drawdown Option (DDO) from World Bank, Asian Development Bank (ADB), Japan and Australia for solving the poverty and becoming the infrastructure model of GESF;
3. The G-20 member which become the biggest share holder in ADB has committed for increasing ADB Capital to stimulate the development in Asia; and
4. Developed Countries have committed to give the increasing capacity for developing finacial sector in Developing Countries.
Dino Patti Djalal, Juru Bicara Intenasional Presiden.