TEMPO.CO, Jakarta - Indonesia and other G20 country members expressed their commitment to boosting world economic growth and reinforcing economic resilience at the national and global levels.
The commitment to realizing strong, balanced, sustainable and inclusive growth is reflected in a number of monetary and fiscal policies, as well as structural reform. The commitment is expressed in the G20 Finance Ministers and Central Bank Governors meeting held on March 17 and March 18, 2017, in Baden-Baden, Germany.
Bank Indonesia (BI) governor Agus D.W. Martowardojo, who attended the meeting with BI and Finance Ministry’s delegations expressed his appreciation for the G20 commitment.
BI spokesperson Tirta Segara said that Indonesia supports the Germany’s G20 Presidency focus amid the global economy recovery and endeavor to achieve the G20 collective growth target set at 2 percent in 2018.
“The focus emphasizes the importance of implementation of the G20 commitments set forth in a document known as the Growth Strategy, particularly those related to structural reforms,” Tirta said in a press release on Monday, March 20, 2017.
Tirta added that Indonesia also supported Germany’s G20 Presidency agenda related to the Note of Resiliency as a non-binding reference for G20 country members. The guide is expected to strengthen the economic resilience amid global uncertainties related to policies made by developed countries, geopolitical risks, and protectionism trend.
The resilience strengthening effort is also supported by the consolidation of Global Financial Safety Net (GFSN), with the International Monetary Fund (IMF) holding the key role and the collaboration between the Regional Financial Arrangement (RFA) and the IMF.
Tirta revealed that Indonesia positively welcomed the development of new liquidity assistance from the IMF similar to the swap facility for country members with solid economic fundamentals.
“Indonesia hopes that the new instrument will be available soon and that G20 will support the IMF to finalize the new instrument,” Tirta said.
Indonesia also supports G20 discussion on capital flows management (CFM). Although Indonesia has liberated capital flows since 35 years ago and obtained benefits for economic financing, Tirta realized that capital flow openness poses a risk related to excessive capital flow volatility.
In order to mitigate the risk, Tirta explained, Indonesia views that the CFM is necessary to complement healthy macroeconomic policies in a bid to protect the economy and domestic financial stability from negative global impacts.
G20 is also committed to timely and consistently implementing the reform agenda in the financial sector. Tirta explained that Indonesia supports an endeavor addressing the structural vulnerability from asset management activities, shadow banking, over the counter (OTC) derivatives, central counterparties (CCP), Basel capital 3, and misconduct risks.
Indonesia also supports structural framework that will evaluate impacts of the implementation of global financial reform for improvement in the future.