G20 Summit & Indonesia: President Joko Widodo Speaks in Hangzhou
At the G20 summit in Hangzhou (China) Indonesian President Joko Widodo urged the leaders of the 20 strongest economies, in particular leaders of the advanced economies, to curb protectionist measures (tariff and non-tariff barriers) as these measures entail negative consequences for emerging markets. Trade could be the engine of international economic growth. Protectionism, however, undermines the flow of trade and therefore blocks accelerated economic growth. Widodo made this statement on Monday (05/09) at the third session of the G20 summit in Hangzhou's International Expo Center.
Instead, the 20 strongest economies are advised to engage in free trade deals. Indonesian President Widodo, often called Jokowi, said the commitment to engage in open and free trade (including with the non-G20 nations) will boost international trade and lead to much-needed accelerated economic growth.
Another request from Widodo to the G20 member nations (especially the advanced economies) is to open access for micro, small and medium-sized enterprises that originate from emerging markets. These enterprises should be able to enter the global value chain in order to boost economic growth and create a more just society as a whole. In the case of Indonesia, the micro, small and medium-sized enterprises are the backbone of the economy, accounting for about 99 percent of total enterprises active within the domestic economy, accounting for 60.6 percent of Indonesia's gross domestic product (GDP), and generating around 107 million jobs.
Another subject that was touched upon by Widodo was international terrorism and the global refugee crisis that both bring along (economic) costs. Widodo stated that nations need to take firm actions in order to prevent the emergence of more terrorist attacks in G20 member nations, such as France, Turkey and Indonesia. However, he emphasized that nations need a 'soft power' approach, not a 'hard power' approach to solve the issue as bold military action ('hard power') will not resolve anything, and may actually exacerbate the situation. The focus should be on cross-boundary intelligence information gathering and coordination as well as tackling the root causes of terrorism. These root causes include poverty, inequality, and marginalization.
Widodo added that Indonesia is in the midst of making its investment climate more attractive, particularly through deregulation, the simplifying of permitting procedures, improving the nation's trade facilities, improving the investment mechanism, and safeguarding stable minimum wage growth (in recent years minimum wages had jumped considerably, hence causing concern among investors).
After his statement at the G20 summit, Widodo also urged Indonesia to focus on the e-commerce industry. A country such as China with the Alibaba Group has been a phenomenon in this industry. Indonesia should be able to do something similar. Recent research conducted by Google Inc. and Temasek Holdings Pte signals Southeast Asia's digital economy (which includes e-commerce, online games, advertising and other economic activities related to the Internet) is expected to surge to USD $200 billion by 2025. The same research mentions that Indonesia's digital market will account for 40.5% - or USD $81 billion - of this total market. With an estimated USD $46 billion, Indonesia's e-commerce sector will contribute most to the total.
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