The International Monetary Fund-World Bank Annual Meeting is one of the most prestigious economic events of the year. These meetings provide a platform for different institutions across the public and private sectors, to meet and discuss issues of global concern. Contentious issues are also opened up to debate within its various seminars held throughout the week. THE IMF-WB annual meeting has been held since 1947 in countries such as Singapore, Istanbul, Tokyo, and Lima among others, prompting an increase in tourism as well as foreign investment in the host country. In October 2015 in that year’s IMF-WB Meeting in Peru, Indonesia was chosen as the host of the 2018 International Monetary Funds-World Bank Meeting, beating Egypt and Senegal in the process. The week long festivities were held in Nusa Dua, Bali from the 8th to the 14th of October 2018.
Finance ministers and central bank governors from 189 countries were invited, as well as their delegates and a variety of other politicians. From the private sector around 5000 participants representing the broader business and particularly banking community attended. And beyond this invitations were extended to the media and certain corners of the academic community. In total the number of attendees was circa 22,000 - such higher than expected
Several priority issues were focused on at the meetings including but not limited to: 1)Utilising technology to encourage inclusive growth. 2)climate change mitigation. 3)human capital investment. 4)infrastructure development 5)urbanization. 6)poverty alleviation and reducing inequality and 7) the plan to increase women participation at senior levels of execution.
Regarding the current global condition, President Joko Widodo (Jokowi) has urged the international community to unite in order to achieve all the proposed aims, which ultimately focus on inclusive economic growth for all. President Joko Widodo encouraged all participants to collaborate on facing many agendas that could disturb economic stability and devise a solution to solve critical climate change related problems.
The meetings gave Indonesia the perfect stage to demonstrate the improvement the economy has gone through over the last few years, with the intention of demonstrating the nation’s ability to survive under global crisis. As part of G-20, Indonesia has reached the highest foreign exchange reserves since its Independence with the total amount US$131.98bn. These improvements prompted Moody’s Investor Service in April 2018 to state that the “Sovereign Credit Rating of Indonesia has been growing significantly stronger”, as shown from the increase of rank from Baa3/Outlook to Baa2/Outlook.
The meetings were also a great chance to discuss Indonesia’s Infrastructure build out, which as we have discussed in other articles is a great to way to attract foreign capital into the country. Finance Minister Sri Mulyani discussed 245 prioritized infrastructure projects to enhance the national productivity and support future investment prospect. In this meeting, the Indonesian government has offered 79 infrastructure projects with US$ 42 billion investment value to the audience, where 21 out of 79 were signed and dealt at the event. According to the minister, several other agreements were signed in other areas including finance, e-commerce and tourism.
Aside from providing a platform for essential international economic discussions, this year’s IMF-WB Meeting has also impacted Bali’s economy via hotels and accommodation, restaurants, retail, and tourism. A study by the National Development Planning Agency (Bappenas) showed that economic activity in Bali has climbed up by 0,64% and the economic growth in Bali was estimated to reach 6,54% by year end, higher than the estimated number of 5.9% in the case that the IMF-WB Annual Meeting was not held there. In total, the event contributed IDR7.8 trillion to the economy tangibly and could provide much more via future investment deals.
We are certainly excited by the developments that took place at the meetings and see this as yet further encouragement for capital to flow into the economy.
Written by : Fajar Adi Nugroho