G20: Indonesia ushers bloc into an era of emerging economies

The Group of Twenty (G20) leading economies has survived a major scare and it has Indonesia to thank.

The G20 leaders, who met on the idyllic island of Bali for their annual summit against the backdrop of Russia's war in Ukraine, agreed on a communique on Wednesday, handing a major victory to the commodity-rich nation of islands, which endured one of the most acrimonious presidencies in the grouping's history.

The carefully worded final declaration noted that "most members strongly condemned the war in Ukraine and stressed it is causing immense human suffering and exacerbating existing fragilities in the global economy." In a hard-fought win for advanced economies and a blow to Russia, the communique opted for "most" instead of "many."

The communique also stated that "the use or threat of use of nuclear weapons is inadmissible" and that "today's era must not be of war." Russia still refers to its aggression as a "special military operation."

"It is a diplomatic coup for Indonesia," Denisse Rudich, director of the G20 Research Group, told DW. "The fact that they were able to come up with a 16-page communique despite all the geopolitical issues is phenomenal."

Indonesia grows in stature

The Bali summit took place at a time doubts were being raised about the very effectiveness and usefulness of the G20. A fellow member waging a war against a sovereign country in Europe and the Western sanctions that followed against Moscow had caused unprecedented divisions within the grouping.

The summit kicked off with a low baseline with many experts suggesting that even if Indonesia managed to ensure the event went off without any major distractions or walkouts because of Russia's presence, it would be deemed a success. The outcome of the summit exceeded those muted expectations.

Indonesian President Joko Widodo was keen on having the G20 leadership as the capstone of his presidency and the major powers looking to woo the non-aligned Indonesia for its commodities and huge market potential didn't disappoint.

"Indonesia is very important for the global South. They have qualities of mediation, kind of quiet diplomacy," Andrew Cooper, a professor of political science at the University of Waterloo in Canada, said. "Indonesia is a very rare country. They never seem to really want to elevate themselves too much. They kind of downplay their role."

India plays a crucial role

India, which takes over the G20 presidency from Indonesia, also played a key role at the summit. Indian Prime Minister Narendra Modi is believed to have played a key role in getting all of the leaders to agree on a common language for the communique on Russia's war in Ukraine.

"Prime Minister Modi has been saying for some time that today's era must not be of war, which is mentioned in the communique. And he's right," Rudich said. "This is a time to come together, to figure out what it is that countries can do economically to support their people and to make sure that people have access to food, energy and to finance."

Experts said the key roles that Modi and Jokowi, as the Indonesian president is fondly known, played in Bali show the rising heft of emerging countries in the G20, where advanced economies have been pulling the strings since its inception in 1999.

It also helped that both Jakarta and New Delhi have so far refused to take sides in the Ukraine war, something the latter could use to its advantage during its presidency, experts say.

"The fact that the presidency is passing from Indonesia to India, gives those stalwart members of the Non-Aligned Movement a chance to have a bigger say," said Michael Vatikiotis, senior advisor at the Center for Humanitarian Dialogue.

Emerging market era

The G20, which was founded to deal with financial crises and economic disruptions by bringing together the world's largest economies, has evolved into somewhat of a "mini UN" also dealing with issues like climate change and geopolitical tensions.

"We should also not hesitate to acknowledge that multilateral institutions such as the UN have been unsuccessful on these issues. And we have all failed to make suitable reforms in them. Therefore, today the world has greater expectations from the G20, the relevance of our group has become more significant," Modi said in his opening remarks.

The question going forward is then how does the G20 continue to be an important body to the world if it really is divided into factions?

Experts say given that context, it's key that the G20 presidency is going to remain with mostly neutral countries for the next three years with Brazil and then South Africa taking over from India.

German Chancellor Olaf Scholz said developing countries holding the G20 presidency would help raise the issues that are important for the future.

"I am sure that the issues of climate change, world food security and health will play a role, but also the opportunities for these countries to develop their own economies better and stronger," Scholz told DW.

Edited by: Rob Mudge