Role of G7, G20 Crucial in Helping Developing Countries, Says Indonesian Finance Minister

TEMPO.CO, Jakarta - G7 and G20 countries will have a vital role in encouraging and harmonizing policies to help developing countries overcome recent challenges, according to Finance Minister Sri Mulyani Indrawati.

"Developing countries are still experiencing scarring effects as a result of the pandemic, the intensifying geopolitical tensions, and the impact of monetary tightening policies in various countries. This is where the G7 and G20 have an important role (to help)," she said on Saturday.

She delivered the statement at the G7's Dialogue with Partner Countries, held as part of the G7 Finance Ministers and Central Bank Governors' Meeting in Niigata, Japan, on May 11–12, 2023.

She explained that developing countries are also facing global challenges due to an unstable financial sector, geopolitics, and the development of artificial intelligence (AI).

High-cost financing has also become a tough challenge for developing countries.

Therefore, she said, strengthening international cooperation and multilateral development banks for supporting development priorities is urgently needed.

"Multilateral development banks also need to increase their capacity to address global issues such as climate change, food crises, and the pandemic," she added.

The finance minister informed that Indonesia, together with G20 countries, established the Pandemic Fund during its G20 Presidency last year.

The Pandemic Fund aims to strengthen the ability and readiness of developing countries to respond to future pandemics.

Developed countries need to support developing countries in terms of financing for infrastructure development, she said.

Affordable funding for infrastructure will significantly help developing countries in spurring economic growth, she said.

Earlier, Indrawati stated that the world is currently "not doing well" three years after the COVID-19 pandemic.

"(Currently), the geopolitical situation is creating a commodity crisis, namely rising energy and food prices, pushing up inflation, especially in the United States and Europe, who, for almost a decade, had enjoyed very low inflation and low interest rates," she observed.

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