Introduction
Indonesia’s Presidency of the Group of 20(G20) which concluded in November 2022 was marked by deep rifts over the Russia-Ukraine conflict and concerns over the spike in global food and energy inflation. Indonesia assumed the G20 Presidency at a time when the world was still recovering from the devastating effects of the COVID-19 pandemic that impacted global economic recession. Further, the increasing risks and uncertainties stemming from catastrophic climate events along with geopolitical tensions had to be managed by Indonesia, in order to build cooperation and keep the focus on the global recovery efforts towards normalising growth.[i]
Against this backdrop, Indonesia G20 Presidency laid out three priorities, namely (1) global health architecture, (2) sustainable energy transition, and (3) digital transformation, under the overarching theme of “Recover Together, Recover Stronger”. During the opening ceremony of G20 Indonesia Presidency, on December 1, 2021, President Jokowi while stating the theme and three priorities, emphasised on strengthening global solidarity and togetherness towards addressing key issues of economic recovery, health, and tackling climate change and sustainable development issues.[ii]
The Indonesian G20 Presidency
Indonesian G20 Presidency based on the theme “Recover Together, Recover Stronger” called for more collective action and inclusive collaboration amongst the major developed countries and emerging economies.[iii] Despite the rising geopolitical tensions witnessed in 2022, Indonesia emphasised on the fact that the G20 is not meant to be a political forum but to address issues of economics and development.[iv] The three priority issues were selected as key pillars to formulate the strategies to accelerate a sustainable, inclusive, and strong recovery.[v]
The first priority paid attention towards building global health architecture. The pandemic experience clearly pointed out to the fact that a global health crisis requires a multilateral and multi-sectoral response. Therefore, the first priority issue sought to develop global health system resilience and emphasised on closing the funding and supply gaps to help boost the capacity of developing countries to distribute and administer vaccines.[vi] The second priority while aim at prioritising economic growth of the developing countries was to ensure that the overall recovery process does not endanger the planet for the future generation. This was in line with laying a solid foundation for and accelerating green growth, which was a commitment pledge made by the leaders at the 2021 United Nations Climate Change Conference (COP26). The third agenda being digital transformation was specifically designed to restore the post-pandemic global economic order through the utilisation of digital technology. This included sectors that constitute a source for new economic growth potential and leveraging digitalisation to advance literacy and skills.[vii]
During the Indonesian Presidency, 150 meetings at different levels were organised, including the Summit in Bali held last November, which saw the coming together of the G20 leaders and signing of a Joint Declaration.[viii] The meetings through the Finance and Sherpa Tracks and various working groups provided an atmosphere for dialogue and engagement in discussions to provide recommendations to the G20 Summit on the agenda of the G20.
The Finance Track in support of the theme had three ambitious targets towards a post-pandemic recovery, which were (1) more productive and balanced global economy through even recovery and enhanced efficiency in the economy, (2) greater financial and monetary system stability to be achieved through increased financial resilience and macroeconomic stability, and (3) broader equality and sustainability through sustainable and inclusive growth. The priority issues in the Sherpa Track were (1) devising a comprehensive exit strategy to support recovery, (2) meeting the vaccination target, (3) transforming the economy with the benefits of digitalisation, and (4) securing access to technology and funds for energy transition.[ix]
Factors that Shaped Indonesia’s G20 Presidency
Indonesia has a predominant role in shaping the regional order, and the G20 Presidency offered a chance for it to set the global agenda for a post-pandemic recovery. Through its G20 Presidency, Indonesia hoped to attain a level of international cooperation by emphasising on collective and coordinated actions that under an increasingly polarised world became challenging. The following sub-sections would examine some of the key factors that helped shape Indonesia’s priorities for its G20 Presidency. In understanding the key agendas undertaken by Indonesia, it is critical to understand its foreign policy behaviour and its strategic thinking that has been conditioned by evolving internal and external environment.
Multilateralism in Indonesia’s Foreign Policy Approach
The G20 Presidency provided Indonesia to showcase its global leadership in setting the global agenda. This is rooted in the Republic’s philosophy and Constitution that envisages its role and contribution to the establishment of a world order, based on freedom, perpetual peace, and social justice.[x] The Association of Southeast Asian Nations (ASEAN) established in 1967, marked a new phase in Indonesia’s foreign policy. Adopting a more constructive relationship with its neighbours through ASEAN was to ensure that any form of expansionist aggression does not occur in the region in the future, and through dialogues, members are able to resolve their differences. Thus, the Suharto government chose to follow the path of regional cooperation instead of conflict. As one of the prime movers in the formation of ASEAN, Indonesia actively attempted to improve its economic and cultural relations with its fellow members – Malaysia, the Philippines, Thailand, and Singapore –and its neighbours in Southeast Asia.[xi]
Given this scenario, Indonesia has often emphasised on upholding the unity and centrality of ASEAN, through which it wanted to shield Southeast Asia from the increasing geopolitical tension and rivalries.[xii] To help manage the challenges of the 21st century, Indonesia constantly favours a multilateral approach through which it seeks to build new partnerships to address emerging challenges of regional and global concerns.
Indonesia’s G20 Presidency came at a difficult time in the aftermath of the pandemic and a multilateral system which was already under pressure. Indonesia’s Presidency focussed on recovery, but the conflict in Ukraine derailed its agenda and brought along new challenges of food and energy security. Given the new complexity on account of geopolitical tensions, Indonesia emphasised on multilateral cooperation in tackling the consequences of the conflict and also in addressing the long-term issues.[xiii] The G20 Bali Leaders’ Declaration also reflected this by emphasising on upholding the multilateral system in order to safeguard peace and stability.[xiv]
Economic Dimensions and the Emerging Uncertainties
Moving from Sukarno’s “Guided Democracy”, Suharto’s “New Order” was based on the premise of modernity. This new approach attracted multinational corporations into its market that helped turn Indonesia into an exporter of manufactured goods. In the aftermath of the Asian financial crisis 1997-98 like the rest of the countries in Southeast Asia, Indonesia’s growth declined sharply.[xv] This led to the adoption of more liberal policies by Indonesia that included removal of import restrictions, lowering of tariffs and increasing engagements in international trade agreements. However, the rise of protectionism in the aftermath of the Global Financial Crisis of 2008 which escalated anti-globalisation trends resulted in stagnant growth in international trade and investments and falling demand for commodities which made up 60 percent of Indonesia’s exports.[xvi] The Indonesian government was effective in steering its economy through the 2008 Global Financial Crisis, with its economy faring much better in comparison to other nations some of whom were experiencing negative growth rates. The Masterplan for the Acceleration and Expansion of Indonesian Economic Development 2011–25 (MP3EI) announced during the second Susilo Bambang Yudhoyono administration (2009-2014) in May 2011 was to build on its positive growth trajectory. The MP3EI laid out plans to transform Indonesia into a developed nation in the 21st century and place itself in the top ten advanced economies in the world by 2025 and the top six by 2050.[xvii]
The Global Maritime Fulcrum (GMF) announced in 2014 at the East Asia Summit by President Jokowi is set to further revive Indonesia’s economy through the strengthening of its maritime capabilities and potential. President Jokowi has a strong commitment towards achieving more equitable economic growth for his people including infrastructure initiatives that prioritise integrating the relatively poor eastern part of Indonesia with the more prosperous western islands of Java and Sumatra. However, this development agenda has been disrupted due to the pandemic and the ongoing conflict in Ukraine.[xviii]
As the largest emerging economy amongst ASEAN members that has a stable political system, the G20 Presidency offered Indonesia the opportunity to help transform and build the post-pandemic global economy. While being focussed on strengthening key economic sectors, Indonesia’s G20 priorities ensured that the Sustainable Development Goals (SDG) 2030 target remains on track.
The Russia-Ukraine Conflict
In Indonesia’s G20 Presidency, which began with the intent to build international cooperation for post-pandemic recovery, the Russia-Ukraine conflict proved to be a major constraining factor. Indonesia maintaining its neutrality since the start of the conflict stems from the fact that right from its independence it remained a non-aligned nation as witnessed during the entire Cold War period.[xix] In June 2022, President Jokowi visited Ukraine and Russia and became the first Asian leader to visit the warring countries. During his visit, President Jokowi encouraged both the leaders to start a dialogue on ending the conflict, which was derailing the post-pandemic recovery by causing food and energy shortages, leading to a surge in global inflation. Given that the conflict was also creating a division within the G20, Indonesia by offering its support in peace efforts to both Putin and Zelenskyy was seen as attempting to unite the forum. To ensure that the G20’s agenda does not get sidelined due to the ongoing conflict, Indonesia invited both the Ukrainian and Russian leaders in order to placate those that threatened to boycott the Summit in Bali.[xx] The joint communiqué of the Bali Summit strongly condemned the ongoing conflict and called on Russia’s unconditional withdrawal, as the conflict is causing immense human suffering and affecting recovery and growth.[xxi]
The Russia-Ukraine conflict dominated much of the Indonesian G20 Presidency and became a major challenge for the collective and coordinated actions it had hoped for. However, despite the conflict overshadowing its entire Presidency, Indonesia pulled together a credible series of events and also brought together all the G20 leaders at the Summit in Bali, which was the first since the start of the Ukraine conflict. The Leaders’ Declaration also included some common ground and renewed commitments to addressing global economic recovery as well as long-term challenges such as climate change.
Beyond the Indonesian G20 Presidency
As India took over the Presidency of the G20, its key priorities include technological transformation, green development and LiFE (Lifestyle for Environment), women-led development, SDGs implementation acceleration, reformed multilateralism, and inclusive growth. These issues would build on the priorities laid out by the Indonesian Presidency, as they are centred on global economic recovery and development. The G20 Presidency of Indonesia and its successors India, Brazil, and South Africa provide a unique opportunity to set the agenda towards realising the aspirations of the Global South. The first Sherpa meeting of India G20 Presidency was held on December 4–7, 2022, in Udaipur, during which there was an emphasis on providing a bigger voice to the Global South. India is building on the pathway set by Indonesian G20 Presidency by looking at strengthening collective action among the G20 countries. Indonesia has extended its full support for the success of India’s G20 Presidency to ensure continuity by building collaboration on issues such as digital transformation, which would be a key for expediting global economic recovery.[xxii]
After the 1997–98 Asian financial crisis and the 2007–08 global financial crisis that led to a substantial decline in the world GDP growth, there were signs of recovery, which were however derailed as a consequence of the COVID-19 pandemic and the ongoing conflict in Ukraine. At a time of an increasingly polarised world, Indonesian G20 Presidency, which emphasised on collective and coordinated actions, remains relevant towards advancing a strong, sustainable, inclusive, and resilient economic recovery.
*****
*Dr. Temjenmeren Ao is a Research Fellow at the Indian Council of World Affairs
Disclaimer: Views expressed are personal
[i]Hariz Baharudin, “ASEAN not Interested in Doing Business with Single Major Power Exclusively: George Yeo”, The Straits Times, January 10, 2023, https://www.straitstimes.com/asia/asean-not-interested-in-doing-business-with-single-major-power-exclusively-george-yeo, Accessed on January 10, 2023.
[ii]“Remarks of President of the Republic of Indonesia at the Opening Ceremony of G20 Indonesian Presidency 2022, 1 December 2021”, Cabinet Secretariat, The Republic of Indonesia, https://setkab.go.id/en/remarks-of-president-of-the-republic-of-indonesia-at-the-opening-ceremony-of-g20-indonesia-presidency-2022-1-december-2021/, Accessed on January 12, 2023.
[iii]V. Srinivas, “G20 @ 2023 – The Roadmap to Indian Presidency”, ICWA, August 8, 2022, /pdfs/g20[at]2023[dot]pdf, Accessed on January 12, 2023.
[iv]Sana Jaffrey, “At the G20, Indonesia Claims Long-Overdue Limelight on the Global Stage”, Carnegie Endowment for International Peace, November 14, 2022, https://carnegieendowment.org/2022/11/14/at-g20-indonesia-claims-long-overdue-limelight-on-global-stage-pub-88397, Accessed on January 5, 2023.
[v]Yulius Purwadi Hermawan, “The G20 Presidency of Indonesia: With Great Trust Comes Great Responsibility”, Heinrich Böll Stiftung, January 31, 2022, https://th.boell.org/en/2022/01/31/g20-Indonesia-2022, Accessed on January 10, 2023.
[vi]“Briefing by G20 Indonesian Presidency to the General Assembly”, United Nations, April 1, 2022, https://www.un.org/en/desa/briefing-g20-indonesian-presidency-general-assembly, Accessed on January 10, 2023.
[vii]Yulius Purwadi Hermawan, “The G20 Presidency of Indonesia: With Great Trust Comes Great Responsibility”, Heinrich Böll Stiftung, January 31, 2022, https://th.boell.org/en/2022/01/31/g20-Indonesia-2022, Accessed on January 10, 2023.
[viii]Hariz Baharudin, “ASEAN not Interested in Doing Business with Single Major Power Exclusively: George Yeo”, The Straits Times, January 10, 2023, https://www.straitstimes.com/asia/asean-not-interested-in-doing-business-with-single-major-power-exclusively-george-yeo, Accessed on January 10, 2023.
[ix]Yulius Purwadi Hermawan, “The G20 Presidency of Indonesia: With Great Trust Comes Great Responsibility”, Heinrich Böll Stiftung, January 31, 2022, https://th.boell.org/en/2022/01/31/g20-Indonesia-2022, Accessed on January 10, 2023.
[x]Ibid.
[xi]“Indonesia”, National Intelligence Estimate (NIE 55-68), US Department of States, December 31, 1968, https://nsarchive2.gwu.edu/NSAEBB/NSAEBB242/1968_NIE-55-68.pdf, Accessed on January 12, 2023.
[xii] Donald E. Weatherbee, Indonesia in ASEAN: Vision and Reality (Singapore: ISEAS Publishing, 2013), pp. 62–63, 65-67.
[xiii]“Discourse: Strengthening Multilateralism, Finding Solutions at G20 FMM”, The Jakarta Post, July 8, 2022, https://www.thejakartapost.com/opinion/2022/07/07/discourse-strengthening-multilateralism-finding-solutions-at-g20-fmm.html, Accessed on January 17, 2023.
[xiv]“G20 Bali Leaders’ Declaration, Bali, Indonesia, 15-16 November 2022”, https://www.g20.org/content/dam/gtwenty/gtwenty_new/about_g20/previous-summit-documents/2022-bali/G20%20Bali%20Leaders%27%20Declaration,%2015-16%20November%202022.pdf, Accessed on January 16, 2023.
[xv]Norman G. Owen (Edi), The Emergence of Modern Southeast Asia: A New History (Honolulu: University of Hawai`i Press, 2005), pp. 435–438.
[xvi]Yose Rizal Damuri and Mari Pangestu, “Who is afraid of economic openness? People’s perceptions of globalisation in Indonesia”, in Arianto A Patunru, Mari Pangestu, and M Chatib Basri (edi), Indonesia in the New World: Globalisation, Nationalism, and Sovereignty, (Singapore: ISEAS Publishing, 2018), pp. 109 and 113.
[xvii]Yuri Sato, “State, Industry, and Business in Indonesia’s Transformation”, in Khoo Boo Teik, Keiichi Tsunekawa, and Motoko Kawano (eds.)Southeast Asia Beyond Crisis and Traps: Economic Growth and Upgrading (Springer Nature: Cham, 2017), pp. 72–73, 79.
[xviii]Sana Jaffrey, “At the G20, Indonesia Claims Long-Overdue Limelight on the Global Stage”, Carnegie Endowment for International Peace, November 14, 2022, https://carnegieendowment.org/2022/11/14/at-g20-indonesia-claims-long-overdue-limelight-on-global-stage-pub-88397, Accessed on January 5, 2023.
[xix]Leonard C Sabastian, “Domestic Security priorities, ‘balance of interests’ and Indonesia’s management of regional order”, in Joseph Chinyong Liow and Ralf Emmers (edi), Order and Security in Southeast Asia: Essays in memory of Michael Leifer, (Routledge: Oxon, 2006), p.176-180.
[xx]Niniek Karmini, “Explainer: Why Indonesia’s Leader Is Visiting Kyiv, Moscow”, AP News, June 30, 2022, https://apnews.com/article/g-7-summit-russia-ukraine-putin-zelenskyy-kyiv-4dac309a424d3392224962ce14d35a99, Accessed on January 12, 2023.
[xxi]“G20 Bali Leaders’ Declaration, Bali, Indonesia, 15-16 November 2022”, https://www.g20.org/content/dam/gtwenty/gtwenty_new/about_g20/previous-summit-documents/2022-bali/G20%20Bali%20Leaders%27%20Declaration,%2015-16%20November%202022.pdf, Accessed on January 16, 2023.
[xxii]“Indonesia Suggest New Working Groups Under India’s G20 Presidency”, TEMPCO.CO, December 11, 2022, https://en.tempo.co/read/1667088/indonesia-suggests-new-working-groups-under-indias-g20-presidency, Accessed on January 18, 2023.