One of the agenda items at the IMF-World Bank Annual Meetings 2018, held on the resort island of Bali, explored how emerging markets can tap into global partnerships and opportunities for inclusive, sustainable and equitable growth. Many of these opportunities arise under the 2030 Agenda for Sustainable Development (the “2030 Agenda”), which is a collection of 17 global goals for challenges such as poverty, inequality, and the climate.
IMF Managing Director Christine LaGarde has stressed the importance of localising Sustainable Development Goal ("SDG") targets, which were agreed by 193 countries. Indonesia has secured an early mover advantage by launching SDG Indonesia One in October 2018. The platform proposes integrated financial solutions to address the financing gap relating to SDG implementation, following Presidential Decree No. 59/2017 on Implementation of SDGs1.
SDG Indonesia One recognises that many challenges of implementing the SDGs are also relevant to Indonesia, including the growing infrastructure deficit. Despite some progress over recent years, Indonesia’s new roads, ports and water-related infrastructure have been largely developed using public sector funds. This has in turn resulted in a strain on the government’s balance sheet.
SDG Indonesia One, therefore, comes at the right time. Managed by PT Sarana Multi Infrastruktur (Persero), the platform aims to narrow the SDG financing gap by mobilising funds from philanthropists and the private sector, turning millions into billions of dollars. At the same time, Indonesia stands to benefit from financial connectivity to the global SDG opportunity.
In order to implement the SDGs, the World Bank has said that Indonesia needs to focus on financing, inclusion and acceleration. Unless Indonesia accelerates infrastructure development, for example, the government predicts that GDP growth is unlikely to move beyond 5.5% per annum. Under this scenario, Indonesia risks facing an ageing population by 2030 without a higher income bracket. It could, in other words, grow old before it becomes rich.
With this in mind, President Jokowi has proclaimed that ‘Winter Is Coming’. Combined with vigilance against external threats to the global economy, Ms LaGarde’s view is that emerging market reforms have become even more urgent. In contrast to the tropical weather enjoyed by the writer and other delegates in Bali, it is hoped that SDG Indonesia One will help to stave off a prolonged economic winter for ASEAN’s largest economy.
1 Presidential Decree No. 59/2017 covers SDG planning and financing by BAPPENAS, Indonesia’s Ministry of National Development Planning.