Indonesia: G20 summit successful confidence-building measure, leaders pledge economic assistance to Asia
In the recent G20 summit, the role of emerging economies in addressing the global economic and financial situation was acknowledged by the leaders of advanced economies.
The G20 leaders delivered a declaration of strong commitments to coordinated programs of action to restore economic stability shortly and recovery as soon as next year and stressed, among other things, the importance of stimulating trade between emerging economies and developed economies.
The G20 summit also agreed on an elaborate action to clean banks of toxic assets, strengthen financial supervision and reiterate commitment to promoting free, fair global trade (resisting protectionism) and investment in compliance with the World Trade Organization rules.
The emerging and developing economies are key beneficiaries of the G20 agreements, with G20 leaders agreeing to treble the resources of the IMF to US$750 billion, the provision of $100 billion in additional lending by multilateral development banks and $250 billion of trade finance support.
Indonesia is the only Southeast Asian country in the influential G20 grouping, and is among the developing economies in the G20 that stressed the need to address the basic needs of developing countries in this economic downturn.
Just prior to the G20 summit, Japan's Prime Minister Taro Aso promised the Indonesian President that Japan would take measures to prop up Asian economies that are struggling with the deepening global recession, a Japanese government official said Wednesday,.
“The key (to world recovery) is restoring Asian economic growth ... Japan will announce several measures to achieve that purpose," the prime minister was quoted as saying.
Japan has agreed to extend US$14.5 billion in financial assistance to Indonesia to help the latter deal with the impact of the global financial crisis. US$12 billion of the assistance would be extended in the form of a bilateral swap facility in the framework of the Chiang Mai Initiative, US$1.5 billion in the form of Samurai bonds, US$500 million in regular loans for 2009, and US$500 million in financing facilities.
Indonesian Finance Minister Sri Mulyani said one of the new initiatives taken by Japan to help reduce the impact of the global financial crisis was adding US$25 billion to its budget for Overseas Development Assistance for all Asian countries.
"The funds are the Japanese’ commitment to the world in the framework of G20 to curb the negative impact of the crisis, particularly on developing countries in Asia," she said.
She said the funds were for the 2009-2010 fiscal year.
The Jakarta Post, Indonesia and the G20
, 3 April 2009, http://www.thejakartapost.com/news/2009/04/03/indonesia-and-g20.html
Antara News, Japan to extend US14.5 billion in financial aid to Indonesia
, 3 April 2009, http://www.antara.co.id/en/arc/2009/4/3/japan-to-extend-us145-billion-in-financial-aid-to-indonesia/