Indonesian President to G-20: Ukraine Tensions Could Hurt Global Economic Recovery

Geopolitical tensions over the situation in Ukraine could undermine global economic recovery, President Joko “Jokowi” Widodo said on Thursday as he opened a two-day meeting of G-20 finance ministers hosted by Indonesia.

A de-escalation of tensions is required at a time when nations are trying to recover from the COVID-19 pandemic, he told finance ministers and central bank governors from the Group of 20 of the world’s major economies, which includes the United States, Russia and China.

“In a situation like this, this is not the time for rivalry,” Jokowi said as Indonesia hosted its first meeting as the 2022 president of the G20.

“This is not the time to create new tensions that disrupt the global recovery, let alone endanger the safety of the world, as is happening in Ukraine today.”

The G-20 financial gathering – being held in-person as well as virtually – comes as coronavirus cases driven by the Omicron variant are rising in several countries, torpedoing plans to fully reopen.

The International Monetary Fund recently lowered its global growth forecast for this year as rising infections, supply-chain disruptions and higher inflation hamper economic recovery worldwide.

In its World Economic Outlook report published last month, the IMF said it expected global economic growth to weaken to 4.4 percent this year from 5.9 percent in 2021.

Tensions, meanwhile, have risen along the border between Russia and Ukraine after the Kremlin deployed military forces, fueling speculation about an impending invasion. Russian President Vladimir Putin has demanded that the North Atlantic Treaty Organization (NATO) stop its expansion to Eastern European countries and deny membership to Ukraine. 

A potential conflict in Ukraine would add to the economic uncertainty, Jokowi said.

“The pandemic is not over yet, and the world economy is still reeling. In a situation like this, no single country can stand alone,” he said.

“All countries are connected to each other, no one is isolated. The rise of one region will revive another region, the collapse of one region will also bring down other regions.”

In a briefing, Indonesian Foreign Minister Retno Marsudi told reporters that she had separate phone calls on Wednesday with her Russian and Ukrainian counterparts – Sergey Lavrov and Dmytro Kuleba – but she did not provide details about their discussions.

She also said that Ukraine President Volodymyr Zelenskyy would visit Indonesia to discuss bilateral partnerships with Jokowi.

Last week, the Indonesian Ministry of Foreign Affairs expressed “great concern” about the situation at the Russia-Ukraine frontier.

“Indonesia calls upon all parties to exercise utmost restraint and to give the maximum chance for dialogue and diplomacy to succeed. Conflict benefits no one,” the ministry said in a statement.

Tensions involving Ukraine, Russia and the United States could be a test of Indonesia’s one-year leadership of the G-20, according to Yose Rizal Damuri, an economist at the Jakarta-based Center for Strategic and International Studies (CSIS).

“Jokowi has a task to bring Russia, China, the U.S. together in Bali later this year,” he said, referring to the G-20 summit scheduled to be held in November.

“But given the current Ukraine situation, President Putin may have reservations about attending,” Yose told BenarNews.

3 strategic issues

On the global health front, the leadership of the G20 is more important than ever, especially for addressing problems such as the inequitable distribution of COVID-19 vaccines, said Perry Warjiyo, the governor of Bank Indonesia.

“Our determination to address these issues will define our path to a strong, inclusive and sustainable recovery,” the Indonesian central bank chief told the finance ministers’ meeting.

Jokowi said that Indonesia’s G-20 presidency would seek to achieve progress on three strategic issues: the resilience of the global health system, the transition to a green economy, and the transformation to the digital economy.

“We must collaborate to deal with these global strategic issues with tangible achievements, measurable achievements … for a global economic growth that is more inclusive and sustainable,” Jokowi said.

When it came to her turn to speak, Indonesian Finance Minister Sri Mulyani Indrawati said that tackling climate change would require schemes to increase and direct more financing and investment into sustainable technologies.

Indonesia has set a target of reducing greenhouse-gas emissions by 29 percent with its own efforts and 41 percent with international support by 2030.

“The time of the pandemic is a pretty strong warning to all of us of how vulnerable the global economy is to non-traditional shocks,” she told delegates.

“In this case, we must remember that climate change can have a much bigger impact than a pandemic.”