The Turkish G20 Presidency is Right to Focus on Inclusiveness

Mike Callaghan

Lowy Institute

30/03/2015

As G20 chair, Turkey has placed ‘inclusiveness’ at the core of the G20’s objectives in 2015. Turkey’s theme is to ensure ‘inclusive and robust growth’ and this is centred on what it describes as the ‘Three Is’ – Inclusiveness, Implementation and Investment.

Turkey’s focus on inclusiveness is very appropriate and this should be the basis to describe what the G20 stands for and is seeking to achieve.

All three of the ‘Is’ identified by Turkey are important. If the G20 is to be effective, it is essential that countries implement their commitments. Increasing investment – particularly infrastructure investment – is a key component to achieving strong and sustainable growth. Inclusiveness, however, is a cross-cutting objective that is closely inter-linked with all the G20’s activities, including the other ‘Is’.

When outlining the priorities for the Turkish Presidency, the Turkish Prime Minister noted that inclusiveness has domestic and international dimensions. At the domestic level, he highlighted the G20’s emphasis on the role of small and medium sized businesses in advancing growth and strengthening female participation in the labour force as well as reducing youth unemployment. At the international dimension of inclusiveness, the Prime Minister said that the challenges facing the less developed countries will be taken up more vocally under the Turkish G20 Presidency. But inclusiveness is a much wider concept.

Inclusiveness is the prism through which all the G20 activities should be viewed. As noted, inclusiveness is closely linked with the other priorities identified by Turkey – implementation and investment. For example, the public are more likely to support difficult structural reforms if they are considered to be fair and equitable and their benefits are widely dispersed. Similarly, increased infrastructure investment – both ‘hard ‘and social infrastructure – can be critical to providing increased opportunities for the underprivileged and promoting inclusive growth. It is the same for the other G20 activities.

Inclusiveness goes to the heart of the G20’s tax agenda. Combatting tax evasion and avoidance is aimed at ensuring that all individuals and companies pay their ‘fair’ share of tax. The objective is to achieve more equitable tax systems in all countries. This includes developing countries, where the focus is aimed at improving their domestic revenue mobilisation capacity for this is central to their development prospects and the pursuit of inclusive growth.

Similar considerations extend to the G20’s energy agenda, which is aimed at improving energy efficiency, security and global governance structures. However one of the major energy ‘problems’ currently confronting the global community is the existence of 1.3 billion people with no access to electricity. The G20 has to pursue an inclusive energy agenda.

The G20’s efforts to contribute to international action on climate change should also be considered in terms of inclusiveness – ensuring that the burden of adjustment is equitable, particularly across developed and developing countries and across generations.

The G20’s efforts to resist trade protectionism and advancing multilateral trade liberalisation should also be centred on the pursuit of inclusiveness - ensuring that all people gain from the benefits of increased trade and investment flows.

Similarly, inclusiveness goes to the core of the G20’s activities in the areas of anti-corruption, financial inclusion and financial regulation – the latter by seeking to ensure that all citizens benefit from stable financial systems and taxpayers do not excessively bear the cost of the failure of financial firms.

The key element captured by concentrating on the concept of inclusiveness in the affairs of the G20 is that it puts people at the heart of the forum – not numbers, jargon or concepts but the interests and concerns of human beings. It personalises the G20. An ‘inclusive G20’ is one where the concerns of all citizens are included in the work of the forum and all citizens benefit from its outcomes.

The Turkish Prime Minister has emphasised that ‘Turkey aims to ensure that discussions within the G20 resonate with the majority of our citizens’. This should be the objective of every G20 leader because it is a major deficiency of the G20.

The G20 currently appears distant and irrelevant to many of the citizens of member states. In part this is because leaders have not included their public in the discussion around the aims and activities of the G20. They have not effectively communicated what the forum is seeking to achieve and why its activities are important to all citizens. Leaders need to adopt a more inclusive approach to the forum if it is to be effective.

Reluctance to see inclusiveness as an objective for the G20 may stem from how the term is interpreted. The pursuit of inclusive growth may be seen as referring solely at efforts to reduce income inequality. There have been debates among economists as to whether income inequality influences a country’s growth rate. However recent studies by the IMF and OECD suggest that countries where income inequality is decreasing grow faster than those with rising inequality and that redistributive policies do not adversely impact on growth. So putting aside the moral and ethical arguments in support of reducing income inequality, the evidence supports that addressing high and growing inequality is central to promoting strong and sustained growth.

Nevertheless the G20’s focus on inclusiveness should be interpreted as a concept that includes, but is much broader than reducing income inequality.

At its heart, inclusiveness goes to the reason why the G20 exists – the recognition of the need for a more inclusive international economic forum. In keeping with this rationale, inclusiveness should underlie the G20’s procedures, activities and outcomes. It’s procedures should be inclusive by taking every effort to ensure that the views of every country and segment of society are heard and recognised. The G20’s activities should be inclusive in that they are relevant to the concerns and needs of all countries and their citizens. And as noted previously, the G20’s outcomes should be inclusive in that they have a positive impact on the lives of all people around the world.

If the Turkish Presidency is successful in getting the G20 to fully embrace the concept of inclusiveness in 2015, it will have made a lasting contribution to strengthening the forum.


Mike Callaghan is a non-resident fellow at Lowy Institute and chaired T20 in 2014.