The inaugural G20 Presidency of Turkey will be guided throughout 2015 by G20 Sherpa and experienced diplomat Ayşe Sinirlioğlu. Ms Sinirlioğlu discussed the priorities of the Turkish Presidency and explained why Turkey has the credentials to lead from the front on issues of global economic governance.
One of the three guiding principles of Turkey’s G20 Presidency is ‘Inclusiveness’. What does this actually mean in both a domestic and international context?
When we look at developed countries and emerging economies, rising inequality has become a very important issue, not only for political and social reasons but also for financial ones. There have been very recent studies by the IMF and the OECD which indicate that rising inequality actually harms growth. The overarching aim of the G20 is to create strong, sustainable and balanced growth. We should all strive for inclusive growth, because if you do not have an inclusive society – economically, socially and politically – you have higher risks.
In terms of domestic inclusiveness, the share of the wage income has been declining, as a percentage of GDP. Turkey maintained a positive growth rate after the 2008 financial crisis. However, this growth is not generating the necessary incomes for the middle and lower strata of society. It is not creating jobs; in fact, there is a new phenomenon called ‘jobless growth’. We want to see whether this is mainly due to cyclical factors or if it is structural.
High youth unemployment is also a big concern and this is the case in almost every G20 country. Even if you have a relatively low unemployment rate in general, youth unemployment is either twice, triple or sometimes beyond that.
Last year, we adopted a very important decision that we would decrease the female participation gap in the workforce by 25% by 2025. That's a very important goal. This year, with ‘Implementation’ as another guiding principle, we want to establish a monitoring system in order to track our promises.
On a global level, this year is very crucial for development. Firstly, we will have the ‘Financing for Development’ conference in Addis Ababa, Ethiopia. Secondly, there is the UN process to define sustainable development goals. In September there will be two summit meetings. That is why we are suggesting that Turkey’s presidency becomes the bridge between G20 countries and the rest of the world. We already had a development working group within the G20, but this year I think we really need to make a special effort to make a difference.
G20 was in fact created mainly to deal with the financial crisis of member countries, but its remit has expanded because the G20 now constitutes 85% of the global economy's GDP, 75% of the world’s trade and 65% of the population. The actions and policies we are adopting within the G20 always have repercussions on the rest of the world. That is why this year we will try to show that the counties who are not part of G20 still matter to the member countries.
Given that Turkey is not tainted with the colonial legacy of some other G20 members and it has developed rapidly over recent years, do you think Turkey has more credibility to lead on issues related to Low Income Developing Countries (LIDCs)?
Our economy has been on a very good track for a long period of time. We have made very significant progress in many areas, including the financial sector. I believe this gives us a better understanding of LIDCs and how to approach the problems in their development. This is a priority issue for us because for the last 10 years, Turkey has been giving financial aid to LIDCs. We have become a net contributor. The aid provided is now $5.6 billion annually, so from a humanitarian point of view, we regard it as a very important foreign policy issue.
Turkey has also made SMEs a priority for the G20. How important are SMEs to both the Turkish economy and the global recovery?
They are very important. First of all, SMEs are the biggest employment generators. In Turkey, they are responsible for 77% of employment. Within the G20 there is special attention from all countries – it's a shared goal – to pay attention to SMEs. SMEs were badly affected by the financial crisis, specifically with respect to accessing finance.
We intend to focus on how we can provide them with alternative and better access to financing; and how SMEs can be better integrated into global value chains. They are also crucial for trade.
How will Turkey’s G20 Presidency attempt to bridge the global infrastructure gap?
We have seen a global slowdown in infrastructure investments since 2008. A study recently published by the OECD estimated that the worldwide infrastructure investment gap would total $70 trillion by 2030. This is a huge number and cannot be met by public finances alone. We need the private sector and institutional investors to help bridge this gap. This is especially important for emerging countries, because unless you have proper infrastructure, you cannot develop further.
Developed countries also have a very big need to increase their level of infrastructure investment. We will give special attention to this matter because there is a liquidity problem. There is money; the problem is gaining the confidence of the private sector and institutional investors to invest in infrastructure projects. Infrastructure investment is also a very important for generating growth, for jobs… it is crucial for each and every economy.
Last year there was perhaps some hostility from the Australian presidency towards the issue of climate change. What can we expect from the Turkish presidency on this issue?
Maybe ‘hostility’ is not the correct phrase to use for the Australian presidency. In the Brisbane summit’s final communique, there was a reference to climate change. Maybe this year it will be of higher importance because we are approaching the UN Climate Change Conference in Paris in July. Under the UN we have a process for this and within the G20 there is no wish to create a double track for these negotiations. Nobody wants to replace the UN climate change negotiations with the G20, and this is not our aim. However, what we have been trying to do within the G20 is focus on defining ‘Financing for climate change’. We will try to develop, or to find alternative and creative ways, to attract more of the private sector to invest in climate change financing.
How would you like the world to remember the Turkish G20 presidency?
We have been working very hard, as it is an honour to lead the G20. It is a very serious job and hopefully when we finish, it will be remembered as a successful presidency. What we have been saying about the Australian presidency is that they were very pragmatic as they prepared all the working groups, which were very successful. Hopefully, if we end our presidency with some concrete outcomes, it will be considered a success.
The Sherpa has key role to play in the success of the presidency. Can you share with us your personal experience of the role so far?
I was an ambassador in Madrid when I was offered this position. Of course, it was a big honour and I accepted. However, it was like doing another PhD in an eight-month period! It is a very comprehensive process, it covers many issues and you need to know everything and to keep a close eye on every agenda item. You always need to stay focused to reach some deliverables. The Sherpa's purpose is to keep the road straight to the end.
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