Looking at the agenda, there are many important topics to be discussed in the area of development.

Transcription

1 KEYNOTE SPEECH BY H.E. MR. ALI BABACAN DEPUTY PRIME MINISTER OF THE REPUBLIC OF TURKEY ECOSOC SPECIAL HIGH-LEVEL MEETING WITH THE WORDL BANK, IMF, WTO AND UNCTAD ( ) Mr. President of the ECOSOC, Mr. Secretary General, Distinguished Ministers, Excellencies, Ladies and Gentlemen, It is truly a pleasure and honor for me to address such a distinguished audience. I would like to extend my gratitude to the President of ECOSOC, H.E. Mr. Martin Sajdik and Secretary General H.E. Ban Ki-moon for organizing this meeting. Looking at the agenda, there are many important topics to be discussed in the area of development. Given my limited time, I would like to share our views, as the G20 Turkish Presidency, on the global economic outlook, the priorities of G20 in this conjuncture and our development perspective. I would like to start by a brief overview of the global economic outlook. It has been almost 7 years after the financial crisis of Despite measures to address the challenges and to revive growth, we could not see a rapid and sustained recovery in the global economy yet. Looking at the country level, we observe a convergence in growth rates of advanced and emerging market economies. The recent signals from the advanced economies are encouraging. Growth is expected to remain above trend in some major economies such as the US and the UK in the near term, and there are also improvements in their labor markets. 1

2 In the euro area and Japan, following the announcement of additional monetary stimulus and with the help of lower commodity prices, growth expectations have recently picked up. With the improvement in advanced economies, we expect the concerns on the global economy to ease and global demand and trade to strengthen but only gradually. In emerging market economies, the picture is mixed. Some economies are growing strongly, but growth in some others is subdued. Yet, it is a fact that these group of economies still account for more than two-thirds of the global growth. Despite the positive developments, the challenges to the global economic outlook persist. One of the most prominent of these challenges is the recent volatility in exchange rates, which is partly stemming from the divergent monetary policy settings of the advanced economies. This volatility may put pressure on corporates, especially the ones with unhedged FX exposures. Prolonged low inflation and low yields are other important challenges to deal with. With respect to these challenges, countries should implement appropriate macroeconomic and macro-prudential measures. Given that the monetary policy has reached to its limits, especially after the recent additional monetary stimulus in some key economies, there is also a need for flexible implementation of fiscal policies to support growth, without jeopardizing medium term fiscal outlook. More importantly, governments should swiftly implement the structural reforms benefiting from the accommodative policy environment. We should always remember that the Central Banks can only open opportunity windows for the governments to do the right reforms. There are many reforms that countries are in desperate need of. Labour market reforms, Product reforms, Social Security reforms, Enhancing Investment Environment or reforms relating to Fostering Human Capital Accumulation. These are going to be at the essence of global economic recovery. Monetary policies or fiscal policies alone will not help 2

3 sustainable growth to be attained. Distinguished Guests, Let me briefly elaborate on G20 Turkish Presidency s priorities in this conjuncture. We built our priorities on previous Presidencies work to ensure a seamless continuity in the G-20, while introducing new elements. Our motto is collective action for inclusive and robust growth. Our priorities for 2015 has be formulated into the three I s of Turkish Presidency. Inclusiveness, Implementation, and Investment for Growth. The first I, Inclusiveness is relevant in both domestic and international level. At the domestic level, we aim to ensure that all segments of the society have access to benefits of growth and prosperity. With this aim, we attribute a specific emphasis to the small and medium sized enterprises (SMEs) in our agenda as a cross-cutting subject. Considering their share in economic activity, and the fact that in many countries 50, 60 sometimes up to percent employment is generated by small to medium enterprises it is important overcome the bottlenecks they face for a more robust growth and employment. We are now also launching for the first time a World SME Forum. This forum is going to be the global voice of SME s worldwide. We asked International Chamber of Commerce to work with us on this subject and this year this new forum will be launched and for the first time there will be a global voice of SME s representing their interest, their opportunities and also their ideas about what we can do for them. They will be represented in different multinational international fora. We are also launching W20, Women 20, the very new engagement group that we have announced recently. This will concentrate on how to enhance the role and effectiveness of women in business. This will be also be about women 3

4 entrepreneurship. We have asked the whole G20 membership to come up with structures within themselves so that by the end of the year we are looking forward to get strong, specific ideas from our W20 engagement for what the G20 should do for this purpose. At the international level, we are trying to ensure that challenges facing the LIDCs are raised more vocally by the G20. By the way for our G20 work we are voicing Low Income Developed Country Concept. This does include the LDC s defined by UN, it is not something new. It is about seventy countries. This is one of the peculiar aspects of the Turkish Presidency and I will elaborate more on this, especially from the development perspective, shortly. Implementation our second I, is a critical aspect of our priorities. Our growth strategies, national employment strategies and several other action plans in different areas. This year, we will focus as the G20 countries on the implementation of the strategies and action plans. It is especially important, because G20 countries committed more than thousand structural reforms. If these reforms are actually implemented, IMF and OECD jointly calculate that global growth will be 2% higher by 2018 compared to the business as usual scenario. So these reforms are actually strong reforms already committed to by the G20 memberships. What we will be doing this year is just making sure that these are implemented. How to do it will be through a new template, a template and accountable template so to say, on which all G20 member have agreed on, in Washington DC just a couple of days ago, and this template will be used to follow up the performance, follow up if the commitments are actually held or not, if they are actually implemented or not. This transparency and accountability approach we believe is going to be an important impetus for countries to do what they have already committed to. The third I, Investment is another important emphasis of this year. Building on existing works, we are introducing a new narrative on investment. In this context, member countries will prepare concrete and ambitious investment strategies by the 4

5 Summit, Summit which will be in Antalya this year, our famous resort town, on November to be more specific, and by that we are hoping that all G20 countries will have concrete investment programs submitted to the G20 platform and again to be followed up and again we will be holding each accountable for implementation. When we talk about investments, financing, and in many countries, fiscal space is unfortunately very very limited, so government resources are no longer available in many countries to increase investments. So how to do it? For some countries which still have the fiscal space maybe they can just have higher investment programs for the future. But then private financing is an important subject. How to mobilize private resources more for public infrastructure investment is a very important area to work on. Public Private Partnership projects are very effective. But on the other hand we do need more of standardization process. They are still difficult to understand for investors. How can we built more confidence and predictability into PPPs. How to standardize them? And then how to securitize them? There are now sovereign wealth funds, pension funds, insurance, re-insurance companies funds around world. Trillions of dollar, trillions of Euros, which are looking for minimum amount of return but they also ask for predictability and confidence. Sow how to combine huge resource available out there and sometimes even for negative interest rates nowadays, how to put them more into public infrastructure investments. This is an important work that we working under G20 infrastructure working group as well as our B20 workforce for investments and infrastructure. Asset based financing another important subject, Islamic Financing another important subject which is to be looked at and which is to be utilized in a much better way to meet our financing needs. Distinguished Guests, Let me briefly explain our approach on how the G20 can play a positive and constructive role in complementing the global efforts on development, in a way I will be moving back to our first I, Inclusiveness. 5

6 This year offers a unique opportunity for us to advance the global development agenda as critical global agreements will be brought about in several decisive summits. Addis Summit is coming up, UN General Assembly this year will be concentrating on the development agenda and then we have COP 21 meetings Paris in December. And we are happy that different international platforms now are working more jointly together to reach the same target. In the first time, Secretary General of the UN joined our IMFC and development committee meetings in Washington DC. So this was a very important step forward. And how to involve Finance Minister, Development Ministers more into the UN development agenda. G20 minister but plus other minister represented in different World Bank and IMF formations. So lots of things to be done. And as the G20 chair this year we are trying to make sure that G20 makes the highest possible contribution to the development agenda of the world this year. It seems that the current concern of the development community creating a more inclusive and equitable system of global partnership with the engagement of all advanced, emerging and developing countries on the basis of mutual respect and benefit. In an agenda that is moving from the old North-South concept to a universal one, we acknowledge that the current framework of official development assistance (ODA) is very important but also insufficient. We need to unleash other available resources such as domestic resources, or private investments. There is a need to deepen global partnership and achieve a global agreement on a new development financing. When we look at the G20 agenda, our core goal is to achieve a strong, sustainable and balanced growth. The very first sentence of the Leaders Communique adopted last year in Brisbane states that raising global growth to deliver better living standards and quality jobs for people across the world is our highest priority. 6

7 As this commitment clearly indicates, Leaders of the 20 major economies of the world are very much aware of the fact that what they do for the G20 countries matters for the rest of the world as well. In addition to attaining G20 s growth target, Turkish G20 Presidency also highlights the importance of the sustainability and inclusiveness of growth both within the G20 and beyond. This year, our LIDC perspective is at the heart of G20 discussions. When you look at our G20 ministerial meetings communique etc there is a special emphasize on LIDC countries. You would see many a terminology of SME, LIDC across the communique. So we are happy that all the G20 members signed up to our priorities of this year. G20 has its own development agenda coming from 2010 with several concrete and action-oriented elements. Five priority actions agreed. These are are infrastructure, domestic resources mobilization, financial inclusion and remittances, food security and nutrition and human resources development. This ongoing development agenda of the G20 is very much linked with several proposed Sustainable Development Goals. The investment in infrastructure issue is strongly linked to the sustainable development goal to build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation. Likewise, G20 s employment agenda and particularly the work on skills mismatch also have a strong relation with the goal to promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. In line with the goal to end hunger, achieve food security and improved nutrition, the G20 is also working on food security and nutrition. This year, we will organize a G20 Agriculture Ministers meeting. This will be second ever. The central theme of this meeting will be how the G20 can best support progress towards the achievement of sustainable food systems with a particular focus on food losses and waste. 7

8 Furthermore, this year, we aim to develop a G20 Energy Access Action Plan with a particular focus on Sub Saharan Africa. We believe that G20 can play a constructive role in addressing the global problem of access to energy which affects one fifth of the world population. This is also closely connected with the goal to ensure access to affordable, reliable, sustainable and modern energy for all. The very first meeting of G20 Energy Ministers, will be held in Istanbul, in October will provide a unique platform to strengthen the global cooperation in this regard. Distinguished Guests, These are quite a few examples on how our G20 development agenda is coinciding with the global development agenda. This year, we introduced a new element into the ongoing G20 development agenda: The role of private sector in development. Enhancing the investment environment and making our countries easily investing places for businesses to perform their functions is very very critical. If we are talking growth, if we are talking about employment, this will be through mostly private sector activity. No matter, how loose the fiscal policies, no matter how much our Central Banks keep printing money, if the private sector doesn t have the confidence for the future, if the private sector does not feel comfortable to hire new people, the growth or employment will not be going as well as we targeted. In addition to those efforts, we aim to increase the engagement of G20 with the low-income developing countries. This will be through high level outreach activities and many other events. One of those example that we organized was again two days ago in Washington DC. I hosted a working dinner for G20 Ministers together with LIDC Ministers. We had round table discussions to generate ideas what we can do more. And these activities will continue until the end of this year and hopefully the LIDC perspective will be more embedded in the G20 agenda as we go along. Especially the fact that Finance Ministers are involved more and more with these issues is very crucial. We have Ministers under different capacities, who are in charge, 8

9 Development Ministers, Education Ministers, or Healthcare Ministers, we have all these different Ministers working for their own purpose but unless there is financing available it is very difficult get concrete outcomes. Mr. Secretary General, Mr. President, distinguished guests, Inclusiveness agenda is going to be very very important for G20 this year. But then there is also one final subject that I want to raise. It is the fact that, humanitarian crises undermine development efforts. The current approach for humanitarian and development assistance which regards them as two separate tracks fail to address some of the worst protracted crises. Turkey, witnesses these challenges most vividly and at first hand in the Syrian crisis with its catastrophic humanitarian consequences. OECD last week reported that 2014 total ODA was almost equal to 2013 ODA figures. This may seem good. But when we look at the actual ODA inflow into developing countries we observe a drop by about 15%. Where did this money go? It is humanitarian crises. In a way whenever there is an urgency in terms of humanitarian crises, countries, developed countries mostly, divert their resources to those crises and hence development budget effectively decreases which is a big risk for the global development agenda. So there is now a need to usher a new era of working between humanitarian and development sectors, especially on humanitarian financing. The World Humanitarian Summit to be held in Istanbul in May 2016, we believe will provide a unique opportunity to address these issues. Ladies and Gentlemen, Distinguished Guests, I would like to close my remarks by expressing again my appreciation to the Secretary General and the President of 9

10 ECOSOC for organizing this event here in New York under umbrella of UN. We are looking forward to the outcomes of the discussions today and tomorrow. Whatever will be discussed here will be reported to us and this will be a very valuable input for the work of the G20 for the rest of the year. Thank you. 10