Remarks of President Joko Widodo at World Economic Forum Held Virtually Bogor Presidential Palace, West Java Province, 20 January 2022
Mr. Børge Brende, President of the World Economic Forum,
Global Business Leaders,
The global community is at unease. Around 84,2 percent of respondents of the Global Risk Report 2022 of the World Economic Forum felt worried or anxious about the future direction of the world, and we must address such anxiety with concrete actions.
Indonesia strives to ensure that its G20 Presidency in 2022 can play an important part in addressing such anxiety by becoming a catalyst for an inclusive global economic recovery. Indonesia’s theme for the G20 Presidency this year is “Recover Together, Recover Stronger.” We will put forward the spirit of partnership and inclusiveness and provide innovative platforms for transformation in various sectors.
Indonesia’s G20 Presidency will focus on three main priorities in accordance with its national objectives and global situation, namely, first, reforming global health architecture to be more inclusive and responsive to crises. Increasing vaccine production along with its equal distribution, mobilizing investment and funding in a swift manner, taking measures to avert the next crisis.
Second, optimizing digital technology to support economic transformation which must bring positive impact to the society, particularly MSMEs (Micro, Small, and Medium Enterprises), increasing digital literacy and capability of the people, while also ensuring data security.
Third, energy transition that is more environmentally friendly. We must provide fair and affordable technology through technology that will spur economy and green economy-based products. These three priorities present an opportunity and investment opportunity that we must optimize.
Indonesia’s G20 Presidency must bring concrete impact to the recovery and growth of the national economy. The benefits must also be felt by the wider society. We want to utilize the G20 cooperation to boost trade, increase industrialization, and increase technological capability in Indonesia and the world.
Distinguished Global Business Leaders,
I invite all global business leaders to contribute to Indonesia’s G20 Presidency to ensure a stronger and more inclusive global recovery, and the cooperation is not limited to governments, not only G to G, but also G to B, or even B to B. Indonesia’s Presidency wishes to strengthen cooperation with global business actors, and interactions with economic actors will be intensified during Indonesia’s Presidency.
I truly hope that businesses, all of you, can contribute your ideas on the concrete steps that can be proposed as part of the concrete outcomes of the G20 Summit. Therefore, consecutively with the G20 Summit, Indonesia will also hold the WEF Roundtable on Downstream Industries, Bloomberg CEO Forum, as well as the Digital Transformation Expo.
Once again, I invite the private sector to identify the concrete contributions that can be proposed in the three priority sectors: health, digital, and energy transition. All of these commitments will become part of the G20 Action for Strong and Inclusive Recovery.
Distinguished Global Business Leaders,
At the domestic level, Indonesia is using the momentum of the pandemic as a momentum to reform, to lay a new foundation for a stronger and more sustainable growth. We continue to carry out structural economic transformation, improve investment and business climate. We have improved investment ecosystem, ease of business licensing, provide legal certainty, and provide special incentives for investments in priority sectors.
The efforts to improve the quality of our human resources continue to be undertaken, among others, through upskilling and reskilling programs, establishing polytechnics in cooperation with industries as well as partnerships with foreign universities. Indonesia also continues to accelerate infrastructure development that contributes to the improvement of investment and business climate.
New centers of growth, particularly on green economy, will continue to be developed, among others, the development of the ecosystem for electric vehicle industry and development of the largest green industrial park in North Kalimantan. Collaboration with private sectors will be intensified. Investment opportunities are wide open for six priority sectors, namely labor-intensive industries with export-orientation, including on health industry. Second, renewable energy. Third, infrastructure. Fourth, particularly, electrical vehicles. Fifth, tourism, and sixth, the value-added mining.
A number of development priorities have also been said, including increasing food production through development of food estate, implementing low carbon development concept, transforming into digital economy through the expansion, distribution, as well as the improvement of digital infrastructure and service quality.
I invite every stake holder in this forum to partner with Indonesia to advance and prosper together.
Thank you very much, Professor.
Executive Chairman of the World Economic Forum (Klaus Schwab)
Thank you very much Mr. President for laying out the three priorities for your G20 Presidency, but also showing us how Indonesia will improve its own internal economic condition and social condition. And I heard particularly also your call to have business leaders engaged. I think what we require in order to achieve such ambitious objective is great public-private cooperation
Now, what is your plan to overcome the divide which we see today between countries and to restore this absolutely necessary joint collaboration?
President of the Republic of Indonesia (Joko Widodo)
We must first evaluate the current condition. The COVID-19 crisis demonstrates the vulnerability of the global health resilience of all countries. In current collaboration such as the COVAX Facility is only a temporary solution and the WHO has yet to play an important role in the strategic aspects of our daily lives. Therefore, in the future, we need a permanent solution, so that the world is ready to face unexpected health problems.
And, Indonesia’s Presidency will strive for the strengthening of the global health resilience architecture which will be carried out by an agency such as the IMF in the financial sector which will be tasked to mobilize global health resources, among others, for providing contingency fund for global health emergency, procurement of vaccines, therapeutics, and medical equipment. And then, we must also formulate the global health protocols which regulate international travels, so that we will have the same standard in every country. We will empower developing countries to build capacities in local manufacturing of vaccines, among others, in management of patent rights, access to the technology, investment in the production of the medical equipment and therapeutics and others.
We need a joint financing to build this new global health resilience system. The cost will be much much lower than the lost that we sustain due to the vulnerability of our global health system, such as the one we experience during the COVID-19 pandemic.
I trust that advanced economies will not have any objection to support such initiative. And of course, the G20 will play a very important role in mobilizing the development of this global health architecture at the moment. In short, we need an agreement among G20 countries. I think that is the first step we have to go through.
Executive Chairman of the World Economic Forum (Klaus Schwab)
Thank you, Mr. President, I agree with you. Certainly, we need strong global systemic approach which means reinforcing global architecture, not only in the health but certainly also in the trade and many other sectors.
Now, with the health of people and the planet in mind, as you mentioned recently, we need to see sustainable energy transition across all countries. Alongside as all developing nations, Indonesia still relies heavily on coal fire power generation. In your view, what are the key drivers to Indonesia to successfully accelerate its own energy transition.
President of the Republic of Indonesia (Joko Widodo)
Professor Schwab, Indonesia’s commitment was reaffirmed during the COP26 in Glasgow that Indonesia is committed to progressively transition to clean energy. However, energy transition requires substantial funding as well as access to green technologies. For developing countries such as Indonesia, it must be backed by technology and financing, so that it will not add excess burden to people and national budget as well as industries. Indonesia, for instance, requires USD50 billion to transform into renewable energy and a further USD37 billion for the sectors of forestry, land use, as well as marine carbon.
Indonesia and other developing countries request the contribution of developed countries for funding and transfer of technology as sources of funding and technology transfer will be a game changer, and the development of innovative financing schemes must be done.
And these are the questions raised by many developing and many poor countries still be asking about this. And, the concrete outcomes can only be achieved through strong cooperation. Governments evidently cannot work alone. Government needs cooperation both domestically and globally.
On domestic cooperation, the Government works together with the energy State-Owned Enterprises as well as private sectors to design a fair and accessible energy transition. At the international level, the Government has worked together with the ASEAN Development Bank to start the energy transition mechanism from coal to renewables.
And, most importantly, how the two things, once again, technology and financing, will be key.
Executive Chairman of the World Economic Forum (Klaus Schwab)
Mr. President, I would like to comment you on this firm will and to go with this energy transformation with you or transition with you is so important, but Indonesia also has a treasure, Indonesia is the home of one of the world’s largest tropical rainforests and also has the largest mangrove forest coverage in the world. And, we know when we want to fight climate change, we have to rely off course on decarbonization, but we also have to rely on the nature way solution and progress made over the years to prevent and restore your natural, and the natural assets have let Indonesia’s position in, I would say, as a climate super power.
What future role do you foresee for Indonesia in contributing to global movements towards a more green future using its particular assets also as a base for learning and policy setting.
President of the Republic of Indonesia (Joko Widodo)
A number of policies, strategies to achieve a green economy; first, is through a low carbon development as envisioned in our mid-term development plan and long-term development plan. Second, our net zero emission policies including the launch of the road map to net zero emission in 2060 and net sink for forest and land use sector in 2030. And, third, providing green stimulus to encourage the realization of the green economy.
Our efforts for conservation in restoration of the environment has succeeded during the past few years. Deforestation grade has declined significantly to 75 percent in 2019 to 2020 at 115 thousand hectares. And, forest fires have also fallen drastically. The number of hot spots, for instance, in 2014 amounted to 89 thousand, and in 2021 we only have 1,300 hundred. And, the coverage of deforest area have now fallen in 2014 it was 1.7 million hectares and in 2021 only 229 thousand hectares.
And then, the restoration of peat lands is progressing well from 2016 to 2021 around 3.7 million hectares have been restored. Mangrove rehabilitation is also conducted on a large scale, for instance, 2020 to 2021 around 50 thousand hectares have been rehabilitated, and our target to 2024 is hoped to reach 600 thousand hectares. And, I believe this is the largest in the world at the carbon sink equal to four tropical forests. And, if paired with below-ground mangrove, it can reach to ten to twelve times higher.
And, the financing scheme for conservation and reservation have been prepared, namely the establishment of the Indonesian Environmental Fund which manages environment funds from domestic and foreign sources usually managed based on the principle of sustainability that is also credible and accountable.
As well as issuing green bonds, an innovative financing scheme to finance environmentally friendly development agenda issuing government bonds under the category of Environmental-Social, and Governance to expand the investment-based that is environmentally and socially responsible.
The development of mechanism of carbon pricing usually provided as an incentive for the private sector to achieve emission reduction. We have also done that. The implementation of budget tagging for climate in the national budget as well as implementing carbon tax to mitigate climate change.
Indonesia has the potential to be a global market leader in the global carbon trading scheme. In fact, that is predicted to surpass the carbon trade potential of Peru, Kenya, and Brazil as countries with the same tropical forest cover in the world.
The establishment of carbon pricing by country in Indonesia is also relatively competitive as compared to partner countries of carbon trading such as Brazil, Peru, and India. And, Indonesia has a number of REDD+ projects with a Results-based Payment scheme such as the Green Climate Fund and the Forest Carbon Partnership Facility and the Biocarbon Fund with a total commitment of USD273.18 million.
I think that is from me, Professor Schwab.
Executive Chairman of the World Economic Forum (Klaus Schwab)
Mr. President, thank you so much for sharing your comprehensive vision and insights. Together with all our partners and the viewers around the world, we send you the best wishes to you and to your Government and to the Indonesian people for this very important year.
We will now continue this discussion in a small business circle, so please be ready to move to the next phase of the discussion.
Mr. President, thank you and all the best.
(AW/EP)
Source:
Special Address by Joko Widodo, President of Indonesia | Davos Agenda 2022 https://www.youtube.com/watch?v=vCZcoaGg5xk
(World Economic Forum’s YouTube Channel)