By Sri Mulyani Indrawati, Finance Minister of Indonesia & Josh Frydenberg, Treasurer of Australia.
FOR TWO YEARS our nations have stood shoulder to shoulder against an adversary that recognises no borders or authority. We have felt the impact of Covid-19 on different scales, yet both nations have seen lives lost, healthcare systems strained and our economic resilience threatened.
We must remain vigilant in the face of threats; however, we can see clear signs of brighter days ahead, and begin 2022 with a sense of hope and optimism.
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| Sri Mulyani Indrawati, Finance Minister of Indonesia & Josh Frydenberg, Treasurer of Australia |
Across our region the progress of development has been severely affected. Personal sacrifice, the pursuit of scientific and technological breakthroughs, strong political will and international cooperation have all been required to combat the virus. And while the pandemic goes on, indications are that the tide is turning. The spread of the Omicron variant appears to be peaking in Australia and is expected to follow suit in Indonesia.
So, as finance ministers and central bank governors meet at the G20 in Jakarta this week, there are promising signs we are entering a sustainable recovery together.
Both countries are in a good economic position by global standards. In Australia, real GDP is expected to grow by 3.75 per cent in 2021-22, with unemployment at 4.2 per cent. Indonesia’s real GDP is forecast to grow strongly by 5.2 per cent this year and unemployment shows clear signs of recovery, dropping to 6.5 per cent in August last year.
We have learnt many lessons from the pandemic, chief among them that we are strongest when we work together. We have seen that our best responses have been multifaceted. As the first wave of Covid swept the globe and the search for a vaccine began, we closed international borders, safeguarded citizens and healthcare systems, and supported individuals, households and businesses with financial stimulus packages on a scale never before imagined.
Prolonged lockdowns severely affected our economies and the ability of business, especially small businesses, to stay afloat.
In Australia we committed a total of $314bn in direct economic support for households and businesses. Indonesia dedicated more than 20 per cent of each year’s budget since 2020 to the pandemic handling and economic recovery program. This program covers pandemic-related health spending, sustains vulnerable citizens’ welfare and keeps businesses running. It has successfully accelerated vaccination efforts to cover more than 50 per cent of the population last year, and it has contributed to the quality and strength of the economic recovery and decreased Indonesia’s poverty rate to pre-pandemic levels.
However, there will be many more hurdles to overcome before Covid is behind us. Omicron has been a fierce demonstration of the risk new variants pose. It is critical that we get shots in arms and reach our G20 target of 70 per cent global vaccination coverage by mid-year.
Safe, timely, equitable and affordable access to vaccines, therapeutics and diagnostics is essential, and low and middle-income countries must not be left behind. We need to support the work of the G20 Joint Finance and Health Task Force to optimise our collective and co-ordinated response to this pandemic and arm ourselves with the right tools to support prevention, preparedness and response to future pandemics and health emergencies. This includes strengthening current financing for pandemic preparedness.
We must be resolute in strengthening the global health architecture. All our futures depend on it, as does the global economic recovery which, while promising, is uneven. Advanced and emerging economies are at different stages.
Global financial safety nets will need strengthening, including through mechanisms to channel additional assistance to those countries most in need.
Australia and Indonesia have been great partners throughout the pandemic and into recovery, but we also keep our eyes on what lies ahead. In reviving our economies, we have never had a better opportunity to grow and invest in a more sustainable way.
G20 members this week demonstrated a desire to look at the entire policy tool kit for addressing climate change. We will prepare strategies to ensure that transition to a lower-emissions economy will be done in an orderly, just and affordable manner. Low-emissions technologies and sustainable investments will help us meet our climate objectives.
Covid-19 has challenged us all, but like any great crisis it also has thrown up unexpected opportunities.
Harnessing the power of digital technology has never been more critical, not only to boost productivity and clean technology options but also to accelerate the recovery and drive inclusiveness.
Indonesia’s presidency of the G20 this year – followed by the chairmanship of the Association of Southeast Asian Nations (ASEAN) next year – provides an opportunity to spearhead regional recovery action.
The Indo-Pacific region’s stability is of fundamental importance to both our countries. Implementation of the Indonesia-Australia Comprehensive Economic Partnership Agreement and the associated economic co-operation program will go a long way to promote trading links and foster confidence.
This agreement will unlock the vast potential of the economic partnership and support a shared recovery. An opportunity presents to address supply chain disruptions, which must not be allowed to persist or deter our commitment to open regional and global trade.
We can achieve this and so much more if we remain focused and unified.
The relationship between Indonesia and Australia will be more important than ever.