Deputy Prime Minister Ali Babacan’s Speech at the G20 Finance and Central Bank Deputies Meeting

Welcome, welcome to Istanbul, welcome to Turkey. It’s our great pleasure and honor to have you all here, for our very first G20 official meeting during our Presidency, during Turkish Presidency.

Deputies from G20 countries, as well as representatives of international organizations are here with us. I wish you a very successful two days of meetings, which will be the kick-off meetings. So, I just wanted to stop by and see you here in Istanbul to give you a little bit idea about our government’s approach and also the priorities, which have been already discussed, which have been already communicated.

I can say that 2014 has been very very fruitful thanks to our Australian colleagues. They did an excellent job. They have taken over the agenda items and pushed through many important subjects with concrete outcomes and deliverables.

I hope that throughout our Presidency, G20 will continue to be focused, relevant and able to achieve positive outcomes in the areas of interest and hopefully we will all get prepared for a successful summit in Antalya, November 2015.

Ultimately the success of our performance will depend on our collaboration and your firm contributions. In order to address the existing risks and uncertainties, we should preserve the spirit of cooperation, determination and also coordinated action that we demonstrated in the aftermath of the global crisis. It is of critical importance to support our commitments with concrete policy actions. This is clearly in the interest of all G20 members, but not an easy endeavor.

Your work as Deputies will lay the foundations of our agenda. Your work will guide the G20 throughout this year as well. And today’s discussion will feed into the February Ministerial Meeting.

During my tenure as the Cabinet member as the Minister in charge of the G20 affairs since 2002, -actually me and Minister from Saudi Arabia, we are two surviving Ministers since 2002-, I have witnessed your dedicated work and devoted performance. There have been many sleepless nights to work on common policies, communiqués. Again thanks to our Australian colleagues, communiqués are now three pages, -although I’m realizing that the print format is getting smaller and margins are getting narrower, but still sticking to the three page commitment- which is I think important to keep there and we have already thought that we want to keep it that way to make your job and everyone’s job easier.

Today, you will have a thorough discussion of plans for the entire year and shape the main pillars of the finance track. Actually Sherpas will also meet on 15 and 16 of December. We have our Sherpa actually with us, Ambassador Sinirlioğlu with us today, joining your work, who has been actually just recently appointed as a Deputy Undersecretary at our Foreign Ministry. And you know our Deputy Cavit Dağdaş very well from your previous work. So, this month Deputies and Sherpas are to be prepared for the February meetings.

We have recently announced our priorities. We planned 2015 as the year where G20 will focus its efforts on ensuring inclusive growth and prosperity through collective actions. Three Is of Turkish Presidency, which we announced, which are Inclusiveness, Implementation and Investment for growth, are going to be special areas of focus. We didn’t really want to be too ambitious in terms of the agenda items and fail in the fulfillment. So we wanted to be realistic, take over the agenda, push for implementation and have more of an inclusive approach. So, that has been our overall approach; having concrete targets but reaching those targets at the end of the day is very important.

Inclusiveness will be important as I said, there are many different aspects of inclusiveness, including having more low-income developing country perspective in the agenda or small and medium sized enterprises, and also the international financial architecture. The Quota Reform of IMF is especially an important part of this. We should make progress in the ratification of this reform, which is crucial to enhance the voice and representation of developing countries in the Fund.

If the reform is not ratified by the US Congress by the end of this year, we will start to explore possible avenues for next steps to advance the Reform by building on the IMF’s contribution on workable alternatives. However, the point I would like to emphasize is that we should preserve the spirit of the 2010 Reform and deliver as much as possible on the gains of dynamic, emerging and developing countries. Besides, a plausible option could only constitute an interim solution that aims to ease the resentment from the long delayed implementation of the Reform. Our primary aim should remain as to implement the 2010 Reform eventually.

Implementation is a critical aspect of our priorities as we would like to make 2015 as the year of implementation. Among other things, the implementation of our growth strategies is very important. We would like to establish a robust monitoring framework to enable us timely implementation of our commitments and also to monitor how the implementation is going on country by country.

The third I, Investment will also be a central theme. It is critical both to boost potential and to stimulate demand. It is also very important to support our “2 in 5” target. In most of the advanced and emerging market countries, there is a substantial need for investments, especially for infrastructure. Therefore, we would like to introduce a new narrative to address investment gaps of the member countries via concrete and ambitious investment strategies.

We are aware that closing these investment gaps requires considerable amount of financing. In this regard, countries with fiscal space should mobilize public resources to boost infrastructure investments, of course, without jeopardizing medium term fiscal frameworks. For the others, we should find ways to mobilize private sources to finance infrastructure investments. To this end, we should first take necessary measures to create an enabling environment and encourage private sector participation in this area.

The PPP models will be very important, effective and cost-efficient tool. However, designing them may require significant expertise. Due attention should be paid to ensure the affordability, feasibility and risk sharing aspects. In this sense, a set of principles, covering institutional end procedural features, can potentially be useful for policy makers. We would like the World Bank to prepare a guideline on PPP models, especially on the affordability, feasibility, and risk sharing aspects.

To this end, we also would also like to use the capabilities of the Global Infrastructure Hub that is expected to become functional later this year in Sydney, which was also an important outcome of the Australian Presidency.

Well just to close, what I will say is that my sincere hope that this meeting will be a highly productive one to lay the foundations of our year-long marathon and make a meaningful difference to global prospects. I’m sure that you are up to this challenge and I wish you a good working spirit and, of course, good luck for the rest of the year.

We are looking forward to working with you all very closely. Our teams at the Treasury, at Central Bank, at Foreign Ministry are there with open communication channels, the spirit of cooperation is there and cooperation happens with good communication.

We look forward to working with you all throughout the year.

I also hope that you have time to see around a bit, especially those who have come to Istanbul for the first time. You can see a good view from here, the Bosphorus, but to live in the city is something else. So I hope that you have some time to actually live in Istanbul for a short while. Again, very warm welcome and wish you a very successful set of meetings today and tomorrow. Thank you.

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