What is G20 and What is The Role of The G20?

Indonesian President Joko Widodo (Jokowi) officially opened the G20 Summit, at The Apurva Kempinski Bali, Bandung Regency, Bali, Tuesday (11/15/2022).

Indonesia is currently holding an important celebration, namely the G20 Presidential which will be held from 1 December 2021 to the upcoming G20 Summit in November 2022. This means that Indonesia will host the G20 for a full year. What is the G20 and why was Indonesia chosen to host this important meeting of Ministers of Finance and Central Banks of the world's largest economies?

Quoted from the websites of the Ministry of Finance and Bank Indonesia, the G20 or Group of Twenty is a major forum for international economic cooperation whose members are the countries with the largest economies in the world consisting of 19 countries and 1 European Union institution. The G20 represents more than 60% of the world's population, 75% of global trade, and 80% of the world’s GDP. G20 members consist of South Africa, the United States, Saudi Arabia, Argentina, Australia, Brazil, India, Indonesia, the United Kingdom, Italy, Japan, Germany, Canada, Mexico, the Republic of Korea, Russia, France, China, Turkey, and the European Union.

Meanwhile, according to the sherpag20indonesia.ekon.go.id website, the formation of the G20 in 1999 arose as a result of the international community's disappointment with the failure of the G7 in finding solutions to the global economic problems faced at that time. The prevailing view at that time was that it was important for middle-income countries and those with systemic economic influence to be involved in negotiations to find solutions to global economic problems. The forum then embraces developed and developing countries to jointly overcome the main crises that hit Asia, Russia, and Latin America.

Initially, the G20 was a meeting of Finance Ministers and Central Bank Governors, however, the G20 Summit has also been attended by Heads of State since 2008 and in 2010 a discussion was held regarding the development sector.

The role of the G20 

1. Handling of the 2008 global financial crisis. The G20 is considered to have helped the world get back on track with growth and pushed for reforms in the financial sector.

2. Tax policy. The G20 has spurred the OECD to encourage the exchange of tax-related information to end tax evasion.

3. Contribution in handling the Covid-19 pandemic which includes deferring payment of foreign debts of low-income countries, injection of handling Covid-19, reduction/abolition of import duties and taxes, reduction of duties on vaccines, hand sanitizers, disinfectants, medical devices and medicines.

4. Other issues include trade, climate, and development.

The G20 was formed in 1999. Its main objective is to expand policy discussions that are beneficial for solving Global Finance problems. The G20 consists of the United States, Argentina, Brazil, Australia, Canada, Mexico, Turkey, Indonesia, South Korea, Japan, China, Germany, United Kingdom, India, Saudi Arabia, South Africa, Italy, France, Russia, and one of the Regional Organizations European Union. Besides that, the Managing Director of the International Monetary Fund was also involved.

The President of the World Bank together with the chair of the International Monetary and Financial Committee and the Development Committee participated in the ex-officio meeting of the Minister of Finance and the Governor of the Central Bank.

Together with the G20 developing countries are taking part in finding and providing solutions to the problems of the world economic crisis, including Finance, Trade, Infrastructure, Investment, Employment, Combating Corruption, Agriculture, Innovation, Technology, and the Digital Economy. The G20 meeting was supported by various things, firstly the Summit Summit, meetings at the level of Ministers of Finance, Central Bank Governors, and working groups consisting of experts from G20 countries dealing with specific issues related to the broader G20 Agenda, with the aim of being included in the Ministry segment and finally the Summit.

Countries that Attending the G20 Summit

There were 17 countries present at the Bali G20 Summit. The names of the representatives present included the US President, Joe Biden, the President of China, Xi Jinping, the President of South Africa, Cyril Ramaphosa, the King of Saudi Arabia, Salman bin Abdul Aziz, the President of Argentina, Alberto Fernandez, the Australian PM, Anthony Albanese, the President Brazil, Jair Bolsonaro, PM India, Narendra Modi, PM UK, Rishi Sunak, PM Italy, Giorgia Meloni, PM Sepang, Fumio Kishida, Chancellor of Germany, Olaf Scholz, PM Canada, Justin Trudeau, President of Mexico, Andres Manuel Lopez Obrador, President South Korea, Yook SeokYeol, Russian President, Vladimir Putin, French President, Emmanuel Macron, Turkish President Recep Tayyip Erdogan and EU Commission President Ursula Gertrud von der Leyen.

The Results of the G20 Summit

As for what the Leaders of the G20 Summit stated in the 2022 Bali Declaration, there were 52 paragraphs in the results of the G20 Summit. Some of them Jokowi said there were two concrete results that were agreed upon, namely:

1. Pandemic fund collected USD 1.5 billion. A pandemic fund is a collection of funds from around the world that will be used in the event of another pandemic in the future.

2. Funds collected from the IMF are allocated for operational revitalization and sustainability of USD 81.6 billion. The funds will be used to help countries facing crises. Finally, it is fitting that the Indonesian government feels fortunate to be the host of the 2022 G20.

Regarding digital economic transformation, consensus has also been reached by many countries, especially in supporting the digital economy development agenda in developing countries, including encouraging the involvement of MSMEs.

On the energy transition agenda, Indonesia has also succeeded in obtaining commitments of US$20 billion from several developed countries that are members of the G7 to support Indonesia's energy transition.

Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance Febrio Kacaribu said that the Indonesian G20 Presidency had been successful and successfully held. This was marked by the achievement of a common consensus or Leaders' Declaration.

Febrio said the G20 Presidency also provided an opportunity for Indonesia to demonstrate its achievements in handling the pandemic, increase investor confidence in the Indonesian economy, and demonstrate a strong perception of economic resilience in the country.

There was something interesting when the G20 Summit took place, namely the unique activity given by Jokowi to representatives of the G20 countries, namely planting mangroves. Following back from the Ministry of Finance's website, as a member of the G20 forum, Indonesia can benefit from earlier information and knowledge about developments in the global economy, potential risks faced, as well as economic policies implemented by other countries, especially developed countries. Thus, Indonesia is able to prepare the right and best economic policies. In addition, Indonesia can also fight for its national interests with international support through this forum. Indonesia's name and achievements are also increasingly recognized and recognized by various international organizations and forums.