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G20 Fails to Reach Agreement Amid Global Recession Threats

Nusa Dua, CNN Indonesia

Minister of Finance Sri Mulyani signaled no joint statement or communique at the meeting of the three G20 finance ministers and central bankers amid the threat of a global recession.

He said the encounter resulted in 14 points. However, not all finance ministers and central bank governors agree with the first and second points.

“Most of the paragraphs are supported by many countries, only two paragraphs have differences and reflect that they cannot be reconciled,” Sri Mulyani said at a press conference in Bali, Saturday (16/7).



First, many members consider the Russo-Ukrainian war to be the cause of the world’s economic downturn and the threat of a recession.

This situation made inflation soared in almost all countries. As a result, the world economy collapsed.

“Many (G20) members agreed that the global economic recovery was slowing due to the Russia-Ukraine war which was strongly criticized and called for an end to the war,” said Sri Mulyani.

However, some G20 countries have different views on the Russo-Ukrainian war. Because, there are countries that support Russia.

“Because I want to convey views on certain issues, especially war, the statement of war still has different views in the G20, as a perception of the opposition of member countries,” explained Sri Mulyani.

Second, some G20 countries are concerned about the risk of a food crisis. However, a number of other G20 countries are also worried about the energy crisis.

Citing the official G20 website, there is no difference in points three to 14. The third point contains the central bank’s commitment to stabilizing the price of goods. This is so that inflation in a number of countries also returns to safe levels.

Fourththe G20 also agreed to prioritize the establishment of a financial intermediary fund (FIF) for pandemic prevention, preparedness and response (PPR).

FifthG20 countries agreed to tackle tax evasion. Sixththe G20 is committed to strengthening the long-term financial system, including developing capital markets.

SeventhG20 countries form resilience and sustainability trust (RST) to help finance low-income countries. Eighththe G20 is committed to increasing sustainable infrastructure investment.

Ninththe G20 is committed to addressing global challenges such as climate change and environmental protection. Tenththe G20 countries agreed to continue to push for the clean energy transition.

Eleventh, the G20 sees the need to strengthen the resilience of the global financial system. The 12th, G20 countries are preparing comprehensive crypto asset regulations.

ThirteenthThe G20 will increase financial inclusion because the COVID-19 pandemic has widened the gap between the rich and the poor. This makes the number of people who are not served by the financial sector more and more.

Fourteenththe G20 will increase the capacity of the Financial Action Task Force (FATF) in an effort to combat money laundering and terrorist financing.

Previously, World Bank President David Malpass had warned that some countries would find it difficult to avoid a recession due to the war between Russia and Ukraine and disruption of global supply chains.

“The war in Ukraine, lockdowns in China, supply chain disruptions and the risk of stagflation are hitting growth. For many countries, a recession will be hard to avoid,” Malpass said.

In economics, a country is called a recession after experiencing contraction in two consecutive quarters.

Even so, the World Bank indicated that Indonesia was free from the threat of recession.

According to a World Bank report titled Global Economic Prospects for the period of June 2022, the Indonesian economy is projected to grow 5.1 percent. That figure is down 0.1 percent from the projections released by the World Bank in January 2022.

But still higher than the realization of Indonesia’s economic growth of 3.7 percent in 2021.

In fact, the World Bank predicts that the Indonesian economy will continue to grow until 2024. The international institution projects that the Indonesian economy will penetrate 5.3 percent in 2023 and 2024.

[Gambas:Video CNN]


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