Sri Mulyani Reveals The Importance Of Global Cooperation In Overcoming Economic And Climate Challenges

Minister of Finance Sri Mulyani Indrawati. (Photo: Doc. ANTARA)

Minister of Finance Sri Mulyani Indrawati conveyed the importance of global coordination and cooperation to overcome economic challenges and climate change at the Third Meeting of the Minister of Finance and the Governor of the G20 Central Bank (FMCBG) in Brazil.

"It is important to coordinate and cooperate with the economy to face global challenges such as climate change and inequality," he said in his official statement, Monday, July 29.

In the series of main agendas of the Brazilian G20 FMCBG, Sri Mulyani emphasized that global economic uncertainty triggered by geopolitical tensions, monetary policy fluctuations, and global elections have increased market volatility and slowed investment.

Regarding sustainable development, Sri Mulyani said, Indonesia will strengthen the national biodiversity financing framework and close financing gaps for sustainable conservation and use of biodiversity.

In addition, Indonesia also welcomes discussions about the application of debt to climate (debt for climate swap) to help countries with limited fiscal space adjust to the needs of each country.

Meanwhile, Indonesia has succeeded in implementing it by signing a debt exchange for nature worth US$35 million on July 3, 2024, to protect the Indonesian coral reef ecosystem.

Sri Mulyani also emphasized the importance of global cooperation to overcome the increasingly complex economic and climate challenges.

According to Sri Mulyani, an integrated strategy is needed to increase development financing in order to achieve sustainable development goals (SDGs) on time and have an impact.

Our biggest challenge is the use of energy and forest land which is the most expensive in financing. We need to continue to build energy projects, but with lower carbon emissions," he stressed.

Sri Mulyani Indrawati highlighted the importance of reaching an agreement on Pilar Satu to increase tax justice for market countries. The failure to achieve a multilateral agreement could lead to unilateral action that could potentially result in multiple taxes and harm the global economy.

"The need for an effective progressive tax policy to reduce income and wealth inequality, as well as the importance of international cooperation in information exchange and capacity building to overcome aggressive tax planning by high-income individuals," he said.

Sri Mulyani also said that the importance of reforming Multilateral Financial Institutions (MDBs) is a must, in order to remain relevant and effective in supporting its members, including for the need for the implementation of a larger, good, and effective Capital Adequacy Framework (CAF).

In addition, Sri Mulyani is also very encouraging and supportive of coordination and integration of policies and procurement processes throughout MDBs, as well as simplifying the funding support process.

"MDBs must also improve the representation of developing countries, including in terms of staff representation which will play an important role in the implementation of more effective projects and provide insight into local contexts and cultures," he explained.