International cooperation remains crucial for post-pandemic economic recovery and environmental sustainability. Countries must put geopolitical tensions aside and work together to address urgent challenges related to global health, digital transformation, and climate change.
This is the key message of Think20 (T20) Indonesia at the T20 Summit in Bali on 4–6 September. The T20 brings together leading think tanks and research institutions to serve as the knowledge bank of the G20. The T20 Summit featured open, in-depth discussions that provide an excellent example for constructive collaboration among the G20 countries’ research community. It was the finale of a year-long process, which produced policy recommendations (summarized in the T20 communiqué) based on policy papers, side events, and roundtable discussions held throughout the year. The policy recommendations are submitted to the G20 leaders for their consideration during the G20 Summit meeting later in the year.
ADB and the T20
We, at ADB, have engaged with the T20 through our ADB–Asian Think Tank Networks (ATTN) platform since early this year, contributing to policy discussions and publications, workshops, the communiqué, and the summit in Bali.
The 2022 Chairmanship of Indonesia’s G20 is happening at a time when strong headwinds threaten the global economy. “Scarring” from the COVID-19 pandemic, the Russian invasion of Ukraine and accompanying sanctions, as well as rising inflation and the resulting higher interest rates to tame it are all dragging on growth. These factors compound fundamental long-term challenges, including inequality, climate change, and increasingly constrained financing for Sustainable Development Goals (SDG) priorities as well as support for low and middle-income countries.
To manage common concerns and encourage “quality” growth, T20 Indonesia set up nine task forces: (i) open trade and investment, (ii) digital connectivity, (iii) governing climate targets and energy transition, (iv) food security, (v) inequality and human capital, (vi) health security, (vii) international finance and economic recovery, (viii) resilient infrastructure, and (ix) SDG financing. These task forces contribute recommendations on Indonesia’s three priority areas for its 2022 chairmanship: global health architecture, digital transformation, and smooth energy transition. Unlike the G7, the G20 has strong representation from the world’s largest emerging economies and so better reflects the perspectives of developing and emerging economies.
T20 policy recommendations
Next, we present some of the important policy recommendations made by the T20.
The G20 should agree on an “immediate, concerted economic recovery.” Countries need to balance stimulus and tightening policies based on policy priorities and available resources. The G20 should create a common framework to manage debt burdens in low-income developing countries before conditions worsen.
G20 countries should remain committed to open multilateral trade. They should keep trade and investment channels open to avoid economic contraction and deepen trade agreements to reduce trade barriers and supply chain disruptions, especially for essential goods—for instance, medical and food products—and environmental goods. The pandemic accelerated digitalization of trade and trade finance, but paper-based transactions are still dominant in global trade. To harness the opportunities that digital technology brings, it is important to allow the legal use of electronic documents both domestically and internationally.
The G20 should facilitate global and regional health cooperation and invest in early warning systems for future pandemics. It should ensure equal access to vaccines for people in developed and developing countries, increase investment in hard and soft health infrastructure, and develop a common pool of crisis funds.
The G20 should work to narrow the digital divide, especially for vulnerable groups and small and medium-sized enterprises. COVID-19 accelerated digitalization, yet exposed digital divides among countries and within societies. Authorities should avoid restrictive intellectual property rights that concentrate market power and worsen societal divides. New investments should be made to make digital infrastructure accessible to all, both to facilitate economic activity and to ensure robust service delivery in social security, health care, and education systems. Building digital skills to match growing demand is also critical to ensure that visions become reality.
The G20 should ensure a smooth and just energy transition. Swift actions are required to achieve net-zero emissions by 2050. Successfully addressing climate change requires that value chains be based on renewable energy sources and greater use of green technologies. Such a transition will require both public and private sector financing, as well as financial and technological support for developing countries.
Finally, the G20 should strengthen cooperation to “recover together and recover stronger,” the tag line of Indonesia’s G20 presidency. This cooperation includes those between countries and among different stakeholders within countries. Recent experience makes it abundantly evident that global and regional cooperation is essential for successfully addressing common challenges, such as health crises or climate change risks.
Next steps for the T20
The T20 recommendations will be taken up by G20 leaders at their November meeting. The discussion of these agendas will continue during the subsequent T20 chairmanships of India (2023) and Brazil (2024). Research-based dialogue and discussions among countries, the knowledge community, and governments will continue to contribute toward a socially cohesive, digitally driven, and sustainable economic future.
This article was prepared by Albert Park, Chief Economist and Director General, Cyn-Young Park, Director, and Sanchita Basu Das, Economist, of ADB’s Economic Research and Regional Cooperation Department.
Source: Asian Development Bank
