The Presidency of the G20 has now passed to Turkey, but the global political economy looks like remaining dangerously under-governed
Did you know that, on 1 December 2014, the Presidency of the G20, the world’s self-proclaimed ‘premier forum for our international economic co-operation’, passed to Turkey? Are you aware that the global political economy’s new leader in this respect is now Professor Dr Ahmet Davutoğlu, the Prime Minister of Turkey? Have you even heard of him? What’s more, do you care much about this assumption of G20 leadership by Turkey?
Well, you should, because the G20 is the only – and therefore the best placed – international body to have been charged with responsibility for giving collective political leadership to the global political economy. The Turkish government is indeed now at the helm and is already actively planning the next summit of world leaders which it will convene in Antalya, a coastal resort in southern Turkey, on 15-16 November this year.
In other words, the G20 circus has moved on. The summit met in St Petersburg in Russia in September 2013 and then in Brisbane in Australia in November 2014. As we have seen, it takes its world tour next to Turkey and, for information, will then gather in China in late 2016. The G20 has no secretariat or permanent staff, which means that each time the leadership of the host country is left with considerable free rein to propose its own agenda for the gathering.
Under such a system of governance national hobby-horses can be, and are, ridden. For example, when it was his turn to take the chair, Russia’s President Putin sought to give emphasis to job creation and the potential contribution of young entrepreneurs and business start-ups as key features of global economic management. The Australian Prime Minister, Tony Abbott, followed up by insisting that the 2008 global crisis had ‘not changed any of the basic laws of [liberal market] economics’ and demanding that each G20 country produce a growth plan that identified the particular supply-side measures to promote additional growth that it needed. In so doing, he saddled an organisation with no capacity to monitor the implementation of its decisions with more than 1000 actions that member-states are supposed to take in order to deliver by 2018 an additional 2% growth beyond previous expectations.
But that is now by the by. What is Turkey proposing for the G20 for the future? Its government has just produced a document entitled Turkish G20 Priorities for 2015. In an introductory message, and in typical modern sound-bite mode, Davutoğlu states that he has formulated ‘the three I’s of the Turkish Presidency’, which are to be: ‘Inclusiveness, Implementation, and Investment for Growth’. Of course, these are not in themselves silly commitments to make. ‘Inclusiveness’ highlights the need for the benefits of growth to be shared by all segments of domestic societies and to spread more effectively to ‘low-income developing countries’ outside the G20. ‘Implementation’ reminds us of past G20 promises on financial regulation, international tax and the international financial architecture (as well as Abbott’s 1000 action-points). ‘Investment’, in turn, points to a pressing need, indeed gap, in the political economies of many countries, and yet says nothing about whether this gap is to be filled by public or private means or some mix. A later part of the document suggests the latter, which doesn’t instill a lot of hope, given the problems encountered all over the world in recent years by so-called ‘public-private partnerships’.
I spent a week in Turkey at the beginning of this month, visiting Koç University in Istanbul and Bilkent University in Ankara in order to give lectures on the global governance of the global crisis. Turkey possesses a number of fine scholars of international political economy, some of whom I met, but I didn’t get the sense that the Turkish government, for its part, was at all ready and prepared to take on its new G20 leadership responsibilities. Indeed, why should it be? Its foreign policy establishment, of which Davutoğlu, a former academic, was once a prominent member, has traditionally been preoccupied with security, rather than political economy, issues. As a result, no part of the Turkish bureaucracy has been devoted to thinking about the global political economy and its needs on a systematic, long-term basis.
It’s early days still, with the summit itself some nine months away. Meetings of G20 finance ministers and central bank governors are gearing up, along with all the other paraphernalia of the modern G20 system – the Business-20, Think-20, Civil-20 and so on. The reality, nevertheless, is that Turkey’s initial document is thin and inevitably wrapped up with some of its domestic political priorities, such as the strengthening of small and medium-sized enterprises and the need to tackle youth unemployment.
Davutoğlu’s introduction also observes, somewhat complacently, that we are now in ‘a post-crisis world’. I’m rather less sure. We might, from this perspective and from outside Turkey, ask, for example, where are the commitments to address the continuing threat to financial stability posed by ongoing debt and inadequate regulation, or to reform the flawed modus operandi of the World Trade Organization, or, perhaps most importantly of all, to bring to the centre of the discussion of the management of the global economy the existential threat of climate change. After all, the critical UN Climate Change Conference begins in Paris exactly two weeks after the Antalya G20 concludes. Why not seek to use this summit to build a political agreement at the highest global level that a climate deal is imperative and must be enacted? No-one is working to bring this about because, under G20 rules, it is Turkey’s job to prepare the agenda.
In short, the G20 is trapped by what in a recent SPERI Paper I have called its ‘occasionality’, its fundamental and debilitating lack of permanence. It was set up in a hurry amidst a crisis and was, naturally enough, modelled on the proclaimed informality and broad commonality of outlook of the member-states of the G7/8. The difficulty into which the organisation has now run is that this manifestly cannot be expected to work in the same way at the level of twenty countries, especially when their leaders, ministers and officials are inevitably drawn from highly diverse cultural and ideological backgrounds.
As a consequence, the G20 is in need of urgent institutional reform if it is to fill even some of the huge deficit in global governance that we face. It needs, in a nutshell, to be given the tools to do the critically important steering job that rightly has been discerned to be necessary in the current ongoing global crisis.