Source: Xinhua    Published: 2015-11-12

 

Global growth will dominate the agenda when leaders of 20 major world economies (G20) gather in Turkey`s southwestern seaside city of Antalya on Sunday and Monday for their 10th summit.

Faced by a continuing influx of refugees from war-torn Syria and a spate of deadly terror attacks, Turkey has broached the subjects for discussions as well, and is hoping for tangible results.

"THREE I`S" FOR GROWTH

In the face of a sluggish and uneven recovery in the global economy and a slowdown in both growth and trade, Turkey has opted to echo the major theme of the G20 summit last year in Brisbane, Australia.

Turkey sees the G20 as a premier platform for global economic and financial issues following the global financial meltdown in 2008.

"The Great Recession in 2008-09 taught us that the solution to global challenges rests in global actions," Turkish Prime Minister Ahmet Davutoglu stated in an official G20 paper.

As the current G20 president, Turkey is aiming to "help enable inclusive and robust global growth through collective action with a view to lifting the potential of the global economy."

"This can be formulated as the three I`s of the Turkish presidency: Inclusiveness, Implementation and Investment for growth," Davutoglu wrote.

Ankara has prioritized support for youth employment, small and medium enterprises (SMEs) and women`s empowerment, as well as issues related to low-income developing countries.

In addition, it seeks to further institutionalize the G20 by means of a new ministerial forum for energy, an SME forum and a Women`s Twenty engagement group.

The Antalya summit will "promise new measures on infrastructure investment, trade and structural reforms," wrote John Kirton, co-director of the G20 Research Group and director of the G8 Research Group at the University of Toronto.

REFUGEE CRISIS AND TERROR

Kirton expected the G20 to act on terrorism and Syrian refugees.

Turkey is caring for more than two million Syrians fleeing from a war that has been raging on since March 2011.

The issue did not come to the fore until this summer when hundreds of thousands of refugees knocked on the doors of European Union countries and repeated tragedies of migrants drowned in the sea on their voyages to Europe dominated the headlines.

Turkey and the EU had inked an initial agreement on the issue, under which the bloc agreed on a set of conditions, including financial aid, in exchange for Ankara`s embrace of refugees to be returned by European countries.

The security situation in Turkey, a NATO member, has deteriorated as well since the government launched in late July simultaneous attacks on targets of the Islamic State group inside Syria and those of the outlawed Kurdistan Workers` Party in Turkey`s southeast and northern Iraq.

Terror attacks have befallen the country, with the deadliest suicide bombings hitting the capital Ankara on Oct. 10, killing a total of 102 people and marking the bloodiest attack in Turkey`s modern history. Ankara blamed the IS for the tragedy.

At their opening dinner, G20 leaders will consider how to better care for millions of refugees from Syria, and the concern will probably extend to the root cause of the crisis -- the wars in Syria and Iraq, Kirton noted in his article.

"PROBLEM OF INCLUSIVENESS"

The current international financial system is blamed for the 2008 meltdown and other recurrent economic and financial woes in the world.

Ramazan Tas, director of the Ankara-based HESA Economic Research Center, told Xinhua that the global economy may be on the eve of a new crisis which is likely to be triggered by currency wars, interest rate wars and neo-mercantilist trade wars.

He referred to a lack of good global economic governance at root of the problem, criticizing the global economic and financial institutions such as the International Monetary Fund (IMF), the World Bank and the World Trade Organization as "outdated" in handling unending crises, and saying they must be reformed.

Despite repeated calls and promises, the ongoing reform of the global monetary and financial systems for the establishment of a new financial order that is fair, equitable, inclusive and well-managed has not made much headway.

U.S. foot-dragging on the governance reform of the IMF, under which a six-percent shift in quota share to the emerging economies was agreed on in 2010 to reflect the growing and underrepresented influence of emerging economies, has annoyed the G20 and others alike.

"The international financial system has a problem of inclusiveness in terms of how the reform proceeds," remarked Ussal Sahbaz, an analyst with the Economic Policy Research Foundation of Turkey.

In his view, there are two basic issues in this regard, with the first being the inclusiveness in the governance of the international financial institutions, the so-called Bretton Woods institutions.

"The IMF quota reform has failed despite the endorsement of the G20," he told Xinhua in an interview. "Furthermore, the World Bank capital increase did not happen despite the fact that emerging countries were ready to contribute."

Sahbaz referred to the inclusiveness in the financial regulatory reform as the second basic issue, arguing that the new Basel III regulations, which was agreed upon in 2010-11 but not yet implemented, will "significantly hinder financial growth." Such regulations are supposed to be a global and voluntary regulatory framework on bank capital adequacy, stress testing and market liquidity risk,

"They will hit most the trade financing to developing countries, and long-term infrastructure investments -- which are mostly needed by developing economies -- and SME financing -- again backbone of most emerging market economies," he explained.

"Yes, we should reduce the risk in the global financial system, but we need to design the reform based on the local conditions of the countries impacted," he added.

Turkey started the SME forum with a view to advocating on behalf of the SMEs at the global standard-setting platforms, such as the Financial Stability Board, which runs the regulatory reform process.

"Turkey made inclusiveness a priority of its G20 presidency," said Sahbaz. "We expect China to continue the same approach."