Sri Mulyani Notes 'Storm' of Risks Facing Emerging Countries in G20 Forum

TEMPO.CO, Jakarta - Finance Minister Sri Mulyani on Wednesday noted that emerging and developing countries face a “storm” of risks from rising energy costs and food insecurity. Mulyani, who is the chairperson for the G20 finance ministers forum, also fears that any resilience some countries may have won’t last long. 

Citing Bisnis.com on Wednesday, the Finance Minister said in an interview with Bloomberg in Washington that “the storm is definitely very strong,” and “will put many emerging and developing countries in a very serious, difficult situation.”

These economic hurdles, said Mulyani, will be accompanied by a strengthening of the dollar index, an increase in the benchmark interest rate by the central bank, and soaring inflation as the Federal Reserve showed aggressive monetary tightening.

“The consequence is not good for emerging and developing countries,” said Sri Mulyani.

About 15 developing countries have dollar-denominated government bonds that pay at least 1,000 basis points more than US Treasuries, which is above the threshold for debt to be considered distressed. This is double the number of countries from the start of the year according to Bloomberg data.

Behind the abundance of global economic challenges, Sri Mulyani emphasized the importance of Indonesia's G20 Presidency which still involves Russia. Excluding one country, she said, would risk fragmentation of the global economy which could make it even harder to solve problems, such as climate change.

BISNIS

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