First of all let us make sure we all understand the vision and mission of this ultra-elite group. The G20 was created in response to both the financial crises that arose in a number of economies in the 1990s and to a growing recognition that some countries were not adequately represented in global economic discussion and governance. So it is a body that was formed to do good and prevent unfairness in world trade. Is it succeeding?
It is the premier forum for international cooperation on the most important aspects of the international economic and financial agenda, and brings together the world’s major advanced and emerging economies, comprising Argentina, Australia, Brazil, Canada, China, EU, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, UK and USA.
The G20 Countries together represent around 90% of global GDP, 80% of global trade, and two thirds of the world’s population. That being said its objectives are still more evenly balanced: (a) Policy coordination between its members in order to achieve global economic stability, sustainable growth; (b) To promote financial regulations that reduce risks and prevent future financial crises; and (c) To create a new international financial architecture.
So did these economically strong but politically diverse nations manage to fulfil the mission that they set themselves at this critical time in world history, when one of the members is actually illegally at war with another nation and causing much of the distress to global trade and economic stability. Let us look at the final result first.
G20 Agrees on 5 Important Points in Leaders' Declaration at Bali G20 Summit
The leaders of the G20 members on Wednesday, November 16, 2022, declared the G20 Bali Leaders' Declaration at the Summit, which encompassed five important points agreed upon by the G20 member countries.
First, G20 members will be agile and flexible in carrying out their macroeconomic policies, and will continue to carry out public investment and structural reforms, promote private investment, and strengthen multilateral trade. They will also try to create resilience of global supply chains to support sustainable, inclusive, and equitable long-term growth.
The G20 members will also ensure long-term fiscal sustainability with assistance from the central banks of each member country. "So that price stability is achieved," as quoted from the Declaration Leaders' official document.
Second, the G20 member countries must commit to preserving macroeconomic and financial stability. The method can be done by optimising all available tools to reduce risks of degradation by noting the steps taken since the global financial crisis occurred.
Third, G20 members will take action to promote food and energy security and support market stability. Countries members will also provide direct temporary support to restrain the impact of rising prices, and strengthen dialogue between producers and consumers.
"As well as increasing trade and investment for the needs of long-term food and energy security, sustainability, fertiliser, and energy systems," as cited from the official document of the Leaders' Declaration.
Fourth, G20 Members will continue to invest in low and middle-income countries and other developing nations through various sources and more innovative financing instruments, including catalysing private investment to support Sustainable Development Goals (SDGs).
G20 member countries also requested the Multilateral Development Banks to advance their action to mobilise and provide additional financing within their mandates. "To support the achievement of SDGs, including through sustainable development and infrastructure investment, and responding to global challenges," as quoted from the Declaration Leaders' official document.
Fifth, G20 members are committed to accelerating the achievement of sustainable development or SDGs, promoting welfare for the G20 through sustainable development.
To the average person all these declarations are just government talk; terms that mean nothing to ordinary people seeking reassurance that their economy will not collapse and that there will not be another world war which is threatened daily on the more sensational news programs. But, all-in-all, it is good news that they managed to actually make a joint declaration and have at least some sort of harmony.
Then again, if we look behind the standard declarations, there were some significant moments that may mean a lot.
- Leaders of G20 deplored Russia's aggression in Ukraine "in the strongest terms" and demanded its unconditional withdrawal in a declaration adopted at the end of a two-day summit. This included Russia as a signatory, which many thought rather surprising!
The war in Ukraine was the most debated article of the leaders' declaration, the president of host Indonesia said, while urging all sides not to escalate tension. French President Emmanuel Macron said G20 leaders agreed to push Russia towards de-escalation in the Ukraine conflict and expressed hope China could play a bigger mediation role in the coming months in that respect.
Russian Foreign Minister Sergei Lavrov, who headed the Russian delegation to the summit in the absence of President Vladimir Putin, of course, condemned "politicisation" of the meeting.
-They agreed to pace their interest rate rises carefully to avoid spillovers and warned of "increased volatility" in currency moves.
- The G20 leaders agreed to pursue efforts to limit the global temperature increase to 1.5C confirming the stand by the temperature goal from the 2015 Paris Agreement on climate change. That could boost negotiations at the U.N. COP27 climate summit in Egypt, where some negotiators feared the G20 would fail to back the 1.5C goal.
- The declaration also said G20 countries would accelerate efforts towards the phase-down of unabated coal power. Negotiators at the COP27 summit in Egypt are wrangling over whether to expand this to phase down all fossil fuels.
- Biden and Chinese leader Xi Jinping agreed on Monday to resume co-operationon climate change.
And for us, perhaps the most important announcement was that:
A coalition of countries including the United States and Japan announced on Tuesday they would mobilise $20 billion in public and private finance to help Indonesia shut coal power plants and bring forward the sector's peak emissions date by seven years to 2030.
But did President Jokowi think the meeting was a success? His assertion was that there that were four solid results with benefits for the country.
First, he said Indonesia’s G20 Presidency resulted in a pandemic “reserve.” “A pandemic fund of US$1.5 billion has been formed,” the President said, and the fund will be a catalyst to mobilise other funding for the health sector that comes from different sources.
Second, the establishment of a Resilience and Sustainability Trust (RST) by the International Monetary Fund (IMF) totalling US$ 81.6 billion to help countries that are vulnerable to crises.
Third, as noted above, the United States and its allies agreed to raise US$20 billion through the Just Energy Transition Partnership (JETP) to support Indonesia’s energy transition program.
The funds were generated by the G7+ led by the United States and Japan, with US$10 billion coming from the International Partner Group (IPG) and US$10 billion from the Glasgow Financial Alliance for Net Zero (GFANZ).
Fourth, G20 member countries are committed to reducing land degradation by up to 50 percent voluntarily.
All members of the G20 also approved the Leaders' Declaration which consists of 52 points in 14 pages. We should be very grateful this was all achieved amicably and peacefully. Well done President Jokowi.
On a fun side note: Joe Biden Shares to Jokowi That He'd Like to Stay in Bali
In his conversation with Indonesia’s President Joko Widodo or Jokowi, Biden said he might stay on the Island of the Gods.
“President Biden, welcome to Bali. Welcome to Indonesia,” said Jokowi before the bilateral meeting as quoted from the White House’s page on Wednesday, 16 November.
Biden responded to Jokowi's warm welcome. “Well, as I told you, Mr. President, I don’t think I’m going home. You had me staying on the beach,” he said while laughing.
Biden said he was happy to meet Jokowi again. “You’ve been a good friend. I was happy to welcome you, back in May, at the White House. And I want to thank you for your hospitality and your support of this G20. You’ve done a wonderful job thus far,” he told Jokowi.
Biden also said that Indonesia is a vibrant and critical partner of the US. As the world's two largest democracies, the US and Indonesia work together to preserve a rules-based system and international order and uphold human rights.
“And together, we’re pursuing a better future. We’ve finalised a new partnership, through the Millennium Challenge Corporation, to invest nearly $700 million in developing high-quality transportation and infrastructure here in Indonesia,” said Joe Biden.
Now that is a result worth waiting for, and perhaps a result of G20, perhaps not.