By : Arsenio Bagas Pamungkas )*
After the G20 Presidency was successfully held, Indonesia returned to exercising international leadership by holding the ASEAN 2023 chairmanship. The chairmanship was handed over from Cambodia to Indonesia at the 42nd ASEAN Summit in Phno Penh in November 2022. On this occasion a number of issues were raised. The priorities to be discussed range from issues of food security, financial stability, energy security, and health.
The period of Indonesia’s chairmanship in ASEAN will last for one year, starting from 1 January to 31 December 2023 which signifies the regional region’s trust in Indonesia to navigate inclusive and sustainable growth in the ASEAN region amid the world’s post-pandemic recovery conditions . For
Dody Budi Waluyo as Deputy Governor of Bank Indonesia (BI) said, Indonesia as chair of ASEAN 2023 will raise a number of issues of economic recovery, digital economy, to a sustainable economy. Dody said that one of the issues that would be raised in the series of events for ASEAN Finance Ministers and Central Bank Governers (AFMGM) was related to crypto assets or crypto currency.
He said the discussion would later look at the benefits and problems posed by crypto assets in the ASEAN region. Apart from crypto assets, it will also be discussed related to digital payment systems between Southeast Asian countries.
According to Dody, this is one of the steps for ASEAN countries to reduce dependence on using dominant currencies such as the US dollar. He gave an example, currently cross-border QR Code payments have been made between Indonesia and Thailand. So that in the future trade and investment activities can be carried out using digital payments without physical payments.
Furthermore, Dody said, ASEAN countries generally have the same economic problems, namely inflation and interest rate hikes. Therefore, AFMGM is also expected to help recovery and growth in the Southeast Asia region.
Meanwhile, during the meeting, the delegates will develop collective and collaborative steps to realize the 3 Priorities Economic Delieverables (PEDs), Namely; Rebuilding Regional Growth, Connectivity and New Competitiveness (recovery rebuilding), Accelerating Inclusive Digital Economy Transformation and Participation (digital economy) and Promoting Sustainability Economic Growth for a Resilient Future (Sustainability).
This framework is expected to strengthen ASEAN member countries in facing the challenges of the world economy through joint steps as the center of world economic growth or the Epicentrum of Growth.
BI revealed that his party together with the Ministry of Finance will present around 24 meetings which include the main meeting (from Deputy to Principal level) and supporting meetings wrapped in the theme “Discover Indonesia”, especially raising the culture of Sulawesi and Kalimantan as well as demonstrating Indonesia’s active tourism.
Meanwhile, the Head of the Fiscal Policy Agency, Febrio Kacaribu, said that ASEAN’s economic condition is currently stable. He said that a number of international organizations such as the IMF, World Bank and OECD see the ASEAN region as the epicentrum of growth, but the world will still face various challenges in 2023. An example of implementation in the Recovery Rebuilding pillar is through exploring the implementation of the policy mix in ASEAN countries.
This is attempted by adjusting the characteristics of each country bearing in mind that ASEAN countries have relatively similar economic problems after the Covid-19 pandemic which hit Southeast Asia evenly.
Another example is efforts to reduce dependence on major currencies through the local currency transaction (LCT) scheme, which is an expansion of the previous Local Curency Settlement (LCS) scheme which has begun to be implemented between ASEAN countries.
Meanwhile in the financial sector, the bilateral swap arrangement initiative between several ASEAN countries such as Indonesia, Malaysia, Singapore and Thailand, has the meaning of strong regional cooperation as a bearing for the financial resilience of the region and each country.
As for the payment system area, where the implementation of interconnection of payment systems that are interconnected between countries through Regional Payment Connectivity (RPC) will continue to be expanded in the context of digitizing cross-border payments.
Meanwhile, in implementing the Sustainability pillar, ASEAN has developed the second version of the ASEAN Taxonomy which is a system or dictionary for classifying economic activities in the region to determine activities that can obtain green financing at a lower cost.
The taxonomy is expected to be accepted and supported by Central Bank Ministers and Governors at the March 2023 meeting, said BI.
There are also efforts to switch the use of fossil fuels to renewable energy, this step certainly requires a transition. Therefore, Indonesia has carried out several transitional activities such as early retirement for coal-fired power plants and Carbon Capture Utilization Storage (CCUS) which will receive transition finance.
Indonesia’s chairmanship at the ASEAN Summit event has been proof that Indonesia has a vital role in efforts to increase the financial stability of ASEAN countries.
)* The author is a contributor to Persada Institute
