Deputy Prime Minister Babacan hosted LIDC Ambassadors in Ankara at a G20 Working Lunch

Distinguished Ambassadors, Ladies and Gentlemen, Distinguished Guests, very warm welcome.

At the outset, I would like to express my appreciation to all of you for being here today with us. 2015 is a special year for Turkey for many reasons, but also especially because of the fact that we are chairing G-20 throughout this year. Throughout our presidency, we are going to be putting a lot of effort on the G-20 agenda. G-20 is a voluntary platform for discussing global economic and financial issues, and it has a very big agenda under 11 different headings. G-20 is discussing many issues of global interest and it works by consensus. G-20 represents about two thirds of the world population and 75% of the world trade, 85% of the global GDP. But on the other hand, G-20 doesn’t cover all the countries of the world. So, when we announced our G-20 presidency priorities, we announced that we are going to be putting a lot of effort on inclusivity, on inclusiveness. We announced that there will be three “I”s of Turkish presidency. The first one is Inclusivity, the second I is implementation and the third I is investments.

When we talk about Inclusivity or Inclusiveness, there are different aspects of this concept. Whenever we talk about growth, about the growth figures in many countries, it is mostly in quantity terms -we are talking about 2% growth, 3% growth, 5% growth. But actually what we should be interested more and more is the quality of growth. When we talk about quality of growth, Inclusive growth is a very important concept that we are going to be emphasizing throughout this year. A country can have maybe 3% – 5% growth, but is this really affecting all segments of the society? Is growth really helping unemployment numbers to go down? Is growth really helping the income distribution to get better? Or is growth helping the countries for better education services, better healthcare services? Is growth really helping the country to reduce its poverty rates?

Especially in the last 6-7 years, since the global crisis started in 2007-2008, the growth has been problematic in terms of quantity but there have been even larger problems on the quality side, even in advanced economies. When we look at the growth and whether it is really helping society at large, there is a huge problem. When we look at the inclusive growth, there is an international perspective and an intra-national perspective. So, when we talk about one country and a country’s inclusive growth, we can talk about unemployment issues, poverty issues, income distribution, education, healthcare and so forth. But there is also the international aspect of inclusivity. We are talking about global growth. Many international organizations are nowadays revising their global growth estimations. World Bank has done about few weeks ago, IMF has done more recently. But is the global growth figure itself really expects what is going on in many countries of the world? So the international aspect of the inclusivity -we believe- is very important and that’s something that we are going to be putting a lot of emphasis during our G-20 presidency.

We have been looking at different ways of how we should approach this subject. Eventually we decided that we can have better access to especially low-income developing countries. UN has a definition, an LDC definition, Least Developed Countries definition, but we thought that it is better to approach by the World Bank’s definition of Low-Income Countries or IMF’s definition of Low-Income Developing Countries, which is a larger group of countries compared to LDCs. During our presidency, what we are going to do is under every 11 subject, under every 11 agenda item of the G-20 discussions, we are going to be bringing this to the table. What are we doing for low-income developing countries as the G-20? If we are talking about trade for example, international trade, are we taking into account the concerns and the opportunities for low-income developing countries? Or when we talk about international taxation issues, are we really bringing to the table strong enough the priorities and perspectives of low-income developing countries? Or if we are talking about investments, infrastructure projects or when we are talking about the financing of climate change, financing of the sustainability, global sustainability issues, are we really looking from the perspective of low-income developing countries? So we announced these to our G-20 colleagues last year in November in Australia that these will be Turkey’s priorities and we had a very big support. So every single G-20 country said to us that this is a great idea and we should all know this and just move forward. We also received a very big support from the UN, from the World Bank, as well as from many other international organizations, or regional development banks like IDB -which is also represented here today- African Development Bank (the president visited me two months ago and we had a thoroughly discussion about it) or Asian Development Bank.

This subject is now held by the G-20 member countries, as well as many international or regional financial institutions or international organizations like UN. So we have already started to get feedback from international organizations and we have already actually asked them to make a study about what they would suggest us as Turkish presidency to bring to the agenda. And they are now already working on it. But the reason why we are having this meeting today with all the distinguished ambassadors -who are here around this table representing their own countries and they are also representing maybe a couple of more countries who are accredited for Turkey- is your opinion, your ideas, may not be just now today, but after consulting with your capitals, developing ideas and suggesting us concrete agenda items or subjects that we should take on board as the G-20 presidency. During the rest of our lunch, I am going to be listening to you about your –maybe- immediate ideas, but then we will be very happy if you can provide us like 3 to 5 pages documents about what we should be taking into account. Of course I don’t want to limit the subject to 3 to 5 pages but just to have an initial glance. Later on, we can deepen the study and ask for more information, more detailed support about what we should be concentrating on. So, this is the main reason of why we are having this working lunch together with you all.

Another priority for Turkish presidency when we look from the Inclusiveness perspective is SMEs, small and medium sized enterprises. This is a subject not only actually for developing countries, but it is an important subject for even developed countries. So we are introducing these small and medium sized enterprises to all the agenda items of G-20. What we are intending to do is, are we really considering SMEs when we make decisions? The decisions about international trade, the decisions about international taxation issues or when we talk about the investments; are we really looking at small and medium sized enterprises as the part of global value chain?

Traditionally, G-20 works with B-20, but when we look at B-20, Business-20, it was mostly representatives of large corporations. So we observed that the voice of SMEs is not really good represented. So what we have asked the B-20 to do is, in addition to the already existing 5 task forces, to add a task force exclusively for SMEs. So we have put together that task force which is already working. The other 5 task forces for G-20 are; the trade task force, employment task force, investment task force, finance task force and anti-corruption task force. These were already existing, we renewed these task forces but then we added a sixth one, SME task force. This will be important during our presidency and what we have already done is, we have asked ICC, the International Chamber of Commerce to launch a global SME structure, a new NGO so to say, a new business organization and the name will be probably something like either World SME Alliance or World SME Assembly. We are still working on it and we want this to be a permanent structure, not just for our presidency but from now on, how to represent the voice of SMEs globally in many international platforms could be through this new structure that we are working on together with the International Chamber of Commerce.

I think for developing countries, SMEs are very important for employment. When we look at the employment generation, in many countries, more than half of the employment is actually generated by SMEs. So if we are talking about employment globally or especially youth unemployment problem in low-income developing countries, then SMEs have a big role to play. When we talk about SMEs, it’s not just corporations, but it’s also about entrepreneurship, it’s also about the young entrepreneurs, it’s also about women entrepreneurs that should be taken into account more properly. So this is more or less about the first I, the Inclusivity subject.

The second I is about Implementation. We are talking about especially implementation of the reforms that many countries have promised already. The G-20 countries have promised about 1,000 structural reforms and if these reforms are actually delivered, then the global GDP will be 2% higher than it will be under business as usual scenario. So, if the countries deliver these reforms, then the global GDP will be about 2% higher in 5 years-time. So we are going to be looking at this very carefully so that whatever has been promised is actually delivered so that we get concrete results.

Third I is about Investments. Again, investment is the subject which is very important not just for developed countries or G-20 countries, but globally it is a very important subject. Especially infrastructure investments are key here. Infrastructure investments are done traditionally by public resources, but especially after the crisis many countries around the world have fiscal problems, budget is not strong enough to support the needed investments in many countries. For those countries that have the fiscal space, maybe they should do more investments, but then for those countries who don’t really have that public resources, PPP projects, Public-Private-Partnership projects, are very important. How to mobilize more private resources globally for public infrastructure projects? That is going to be an important area of study for us throughout this year. There are several wealth funds, there are pension funds, which now have huge cash availability (even two-three large sized funds have resources enough to meet the investment needs of maybe these 100 countries for the next 5 years). But how to make them feel more secure? How to build more trust into these projects? How to bring more predictability for those investors who would like to invest in our countries? How to standardize these projects? How to securitize these projects? How to mobilize the capital markets for these projects?  These are all very important subjects and during the Australian presidency, we decided to put together a global infrastructure hub in Sydney. It was our Australian colleagues’ idea which is for knowledge sharing, experience sharing in a way and that is going to be functional sometime this year. And we as the Turkish presidency, are going to be trying to develop new models and approaches to investment financing throughout this year.

Ambassadors, as you also very well know, we hosted the 4th UN Conference on LDCs in Istanbul in 2011 and we are going to be doing the midterm review conference in June 2016. So, in a way, our work during our G-20 presidency will be a good preparation for the midterm review conference in June next year and we are going to be of course bringing all the G-20 decisions of as much as we can get. G-20 works on consensus basis and unless every single country around the table says “Yes”, the decision doesn’t go through. But we are going to be pushing to get as much as possible this year and get prepared for next years with the summit.

Another important subject for this year is the UNFCCC Conference, the 21st conference, which will be in December. Climate change is a big problem, global warming is a big problem and especially 2008-2009 crisis made many governments around the world concentrate more on immediate, urgent issues, instead of long-term issues.  So this year, it is also going to be very important for major polluting countries to concentrate again on environmental issues.

The reason of climate change is mostly due to big economies, major polluters so to say, but when we look at the eventual impact, unfortunately we have observed the eventual impact on many developing countries, low-income developing countries, LDC’s and so forth. So, this year we are also going to be doing as much as possible around the G-20 table to prepare the subject for the December conference of UNFCCC.

So it will be quite a busy year. We already had our Sherpa and our Deputies meetings for G-20 at December. The Ministers and Central Bank Governors Meeting will be during the second week of February. We are going to have more meetings of Central Bank Governors and Ministers in charge of Finance throughout the year. We are also going to have Ministers of Labor and Ministers of External Trade Meeting. By the way, G-20 table does include African Union, does include the Chair of African Union, Chair of ASEAN, so through all those organizations actually many countries are represented. So we are going to be doing all these Ministerial meetings, but for the first time we are going to be hosting a G-20 Energy Ministers Meeting. Energy Ministers Meeting will have an important agenda, which is pointed out access to energy, access to electricity. Right now, there is a huge population in the world which doesn’t have any form of electricity in their daily lives, they haven’t met an electricity valve or a power plug in their entire lives. So this is a serious problem, which has to be met.

Another important meeting we are convening will be G-20 Food and Agricultural Ministers Meeting. This is also going to be a very important study for global food safety, how to deal with the problem. FAO and UN are going to be very important partners for this ministerial meeting. Also Tourism Ministers will meet and that is not an official track where World Tourism Organization is usually in the picture for that. The summit, the G-20 summit will be in Antalya 15th and 16th of November, this is what we have planned.

So this is more or less the agenda, the venues, the calendars. I don’t want to make this just a one-way communication process, main purpose of this meeting is actually to hear from you on your initial ideas so to say and also to open a communication channel between the Embassies here in Ankara and our Foreign Ministry and our Treasury. We have our Sherpa with us today, Ambassador Sinirlioğlu, who is now Deputy Undersecretary in our Foreign Ministry. We also have Acting Undersecretary of Treasury, Cavit Dağdaş, who is our G20 Finance Deputy. Finance Deputies and Sherpas, who are actually doing all the technical and hard-work, preparations and make our lives easy as Ministers. So when we meet, most of the things are cooked and prepared anyway, we thank them actually for their hard-work, sleepless nights and weeks to get things done. There is a huge machinery, technical machinery, behind the G-20 political table, which is actually generating good results. Also we have here our colleagues from Treasury and Foreign Ministry, who are in charge of the G-20 agenda. So, we are at your service, my colleagues are at your service for any more interaction or any more ideas or suggestions that you are going to be providing us throughout this year. And we hope that when we reach to the end of the year and have the summit, our G-20 Summit Communique will have a strong emphasis on LIDC’s for many subjects, new decisions and new concrete results that we are intending. But of course, remembering that G-20 does work on consensus basis and we have to convince everyone around the table to get things done and get things moving.

So, again thank you very much for being here. It is our great honor and pleasure to have such a high-level representation from so many countries around the world, around this table and now I’m going to turn to you for your ideas, for proposals and questions that you might have.

Thank you.

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