Indonesia calls for new financial global architecture

22 Apr1:35 PM

[JAKARTA] Indonesian President Joko Widodo called on Wednesday for a new global financial order that is open to emerging economic powers and leaves the "obsolete ideas" of Bretton Woods institutions in the past.

Jokowi's speech in Jakarta opened a meeting of Asian and African nations to mark the 60th anniversary of a conference that was seen as a united stand by the developing world against colonialism and led to the Cold War era's non-aligned movement.

Among the leaders listening were Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping, who were expected to meet on the sidelines of the conference, the latest sign of a thaw in relations between the Asian rivals.

Sino-Japanese ties have chilled in recent years due to feuds over the two neighbours' wartime past as well as territorial rows and regional rivalry. Bilateral talks in Jakarta on Wednesday could promote a cautious rapprochement that began when Mr Abe and Mr Xi met at a summit in Beijing late last year.

Jokowi made no mention of the China-backed Asian Infrastructure Investment Bank (AIIB) that is seen as a threat to the Western-dominated World Bank and Asian Development Bank, but Indonesia is one of nearly 60 countries that have offered to be founding members of the AIIB.

The United States and Japan have not thrown their support behind the bank, which is seen as a threat to US efforts to extend its influence in the Asia-Pacific region and balance China's growing financial clout. "There is a shifting world reality ... Those who say the global economic problems shall only be solved through the World Bank, the IMF and the ADB, these are obsolete ideas," Widodo said. "There needs to be change." "It's imperative that we build a new international economic order that is open to new emerging economic powers." The International Monetary Fund and the World Bank were at the centre of the post-World War Two Bretton Woods monetary order created by the United States and Europe.

Indonesia invited heads of state and government from 109 Asian and African countries, but there have been dozens of no-shows and officials said only 34 leaders turned up.

Zimbabwean President Robert Mugabe, speaking at the conference, said countries in Asia and Africa "should no longer be consigned to the role of exporters of primary goods and importers of finished goods".

He called it a "role that has historically been assigned to us by the colonial powers and starting from the days of colonialism".

The world order has changed dramatically since nearly 30 heads of state gathered in 1955 to discuss security and economic development away from global powers embroiled in the Cold War.

Many of those countries, such as China and India, are now themselves at top tables like the Group of 20 and wield significant economic power.

Jokowi said the group was meeting again in a changed world but still it needed to stand together against the domination of "a certain group of countries" to avoid unfairness and global imbalances.

REUTERS