Investment Minister and Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia highlighted four challenges of sustainable investment at the opening of the G20 Trade, Investment and Industry Ministerial Meeting (TIIMM) in Nusa Dua, Bali.
"First, the investment must contribute to downstreaming that has an important role in ending the cycle of dependence of developing countries on raw commodities while reducing the impact of climate change," Lahadalia, concurrently co-chairman of the G20 TIIMM, stated in Nusa Dua, Bali, Thursday.
G20 TIIMM is included in the G20's Sherpa Track to discuss six priority issues related to Trade, Investment, and Industry. G20 is a multilateral cooperation forum comprising the European Union (EU) and 19 major countries.
The first challenge is deemed important since two out of three developing countries in the world are dependent on raw commodities. Hence, it is necessary to provide support to developing countries to advance their industry through optimizing policies on the use of natural resources, as developed countries have done at the start of the industrial revolution, he remarked.
Second, he said that sustainable investment must be friendly to the interests of the local community.
"Therefore, we need to ensure that sustainable investment is also an inclusive investment, including by encouraging investors to collaborate with local micro, small, and medium enterprises (MSMEs)," Lahadalia pointed out.
Third, he noted that investment required justice, wherein the current trend of investment in green energy was still unequal.
He said that only one-fifth of the green energy investment went to developing countries. In other words, two-thirds of the total world population only gets one-fifth of the total green energy investment.
"Included in this case is the disparity between the price of carbon credits in developed and developing countries. In future, we need to agree on the rules of a fairer and more balanced carbon market without double standards between developed and developing countries," he emphasized.
The last challenge is the need for support from countries to adopt the compendium as a policy reference for the formulation and implementation of strategies and programs to attract sustainable investment, Lahadalia remarked.
"We hope that this meeting would produce benefits for the recovery of the world economy and formulate a stronger international development governance agenda and policies," the minister stated.
The G20 TIIMM Forum is also designed to encourage inclusive and sustainable economic growth, give strong attention to investments that create added value, foster collaboration in the MSME sector, and encourage the digital economy as a new driver of the economy, he affirmed.
"As a group of countries, with 80 percent of the world's gross domestic product (GDP), we have the responsibility to gain consensus in managing development and the world economy to achieve our common goals of justice and prosperity," Lahadalia concluded.
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