As Bali Awaits Financial Elite, a Volcano Is Still Rumbling
(Bloomberg) -- Jerome Powell’s upcoming Asia visit will test the Federal Reserve chief’s appetite for risk on a far different scale to the U.S. economy.
As Indonesia prepares to host the International Monetary Fund and World Bank Group annual meeting on the island of Bali in October, authorities are planning for all sorts of potential natural disasters from earthquakes to tsunamis, after a tremor killed 500 people in a nearby island this month. Officials also have a contingency plan in the event that a rumbling volcano erupts again.
“We as the committee and the government are ready with an evacuation plan,” Indonesia’s IMF-World Bank Annual Meeting task-force chief Peter Jacobs said in an interview in Jakarta. “We even have the ships, the navy ships around Bali ready.”
Safety concerns are proving paramount as Powell and financial world leaders prepare to gather with more than 15,000 people on the resort island of Bali. As far as the meeting’s agenda goes, the ongoing trade war between the U.S. and China is looming as the key issue. However, Jacobs said that Indonesia plans to also use the meetings to highlight infrastructure financing and showcase Bali’s potential as an investment destination.
Ring of Fire
The island currently has its challenges. The Mount Agung volcano began rumbling about a year ago, with the eruptions that followed prompting mass evacuations. It forced Bali’s international airport to close for several days in November, and an eruption in June also caused hundreds of flights to be canceled.
Indonesia, an archipelago of more than 17,000 islands, has the world’s largest number of historically active volcanoes. The country is located on the so-called Pacific Ring of Fire, an arc of volcanoes and geological fault lines surrounding the Pacific Basin.
Bali’s neighboring island of Lombok was hit by a series of earthquakes this month, displacing hundreds of thousand of people and leaving more than 500 dead. The tourist haven remains a scene of destruction and aftershocks have been occurring since.
The authorities are prepared "in case anything happens,” Jacobs said. “We have the contingency plans in place."
Indonesia, as host nation of the IMF-World Bank meeting, wants financial technology and the digital economy included on the agenda, as part of a framework to be known as the Bali Initiative. President Joko Widodo will deliver a speech on the digital economy.
“We are also pushing or supporting the issue of the international monetary system as we are seeing the trade war and there will be monetary policy co-ordinations that will need to be strengthened,” Jacobs said. “These will be also the central issues discussed in the IMFC,” he said, referring to the International Monetary and Financial Committee.
Powell has been invited to speak at an international banking seminar, jointly hosted by the Group of Thirty and Bank Indonesia, on the sidelines of the IMF and World bank meeting, although the line-up is yet to be confirmed. European Central Bank President Mario Draghi, People’s Bank of China Governor Yi Gang and the Bank of Japan’s Haruhiko Kuroda are also expected on the same panel, according to a program provided by Bank Indonesia.
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