30-31 Ekim 2014 tarihlerinde Strazburg'da gerçekleştirilen OECD Daimi Temsilcileri Gayrıresmi Toplantısında yapılan konuşma
It is a great pleasure today for me to attend this Ambassadors’ Seminar and to have the opportunity to speak in this important session on the future of the OECD within a changing global architecture.
In order to be able to assess the future we must first of all have a deep and comprehensive understanding of the past. Therefore without questioning the current international economic order and the conditions in which it was created, it is impossible to make a sound assessment about the future of this organization and the broader international economic system.
The current Bretton Woods system was established with the aim of rebuilding the international economic system shattered by the Second World War and up until the 2008 global crisis its institutions, namely the IMF and World Bank remained influential in the management of the global economy, despite the revolutionary changes that the international economic system underwent in the past few decades due to the growing effects of globalization.
2008 financial and economic crisis was indeed an eye opener for the world, in the sense that we were forced to face the reality that this system in its current form is no longer sufficient to guide and rescue the global economy in times of crisis. The scope of the 2008 financial crisis which led to a global economic crisis showed us that the system lacked not only resilience but also the capacity to accurately assess the root causes of crisis and what needed to be done to overcome it.
However, every cloud has a silver lining. As terrible as the effects of the crisis were, it taught the world a lot as to the global economic vulnerability in the face of such crisis and we have the opportunity now, as well as the responsibility to take the necessary steps to avert such crises in the future.
In order to be able to successfully devise new strategies and formulate new policies to establish economies resilient to future shocks, both at the national and international level, we need to be straightforward in seeking the root causes of the crisis. We need to accept the fact that grave mistakes were made in the financial sector by prominent actors for short term gains, that regulatory bodies were ineffective and that too much confidence was put in the market to correct itself.
Joseph Stiglitz has long been questioning the very concept of “economic growth” as we have known it. He has been emphasizing for a long time the fact that growth in itself is not an end and that the benefits of growth have gone primarily to the rich and made the poor much poorer. Although some may find certain of his views to be extreme, his assessment of economicgrowth as a means to achieving a more prosperous society, to eliminating poverty and raising the standard of living of our people as opposed to making the rich even richer also reflects the very discussions that we have been having in the OECD as well as other platforms such as the G20.
In order to strengthen the global economy, we must act responsibly and not lose sight of the real objective, which is to achieve inclusive and equitable growth and sustainable development with all its dimensions including the protection of the environment and the fight against climate change. The key to achieving this objective is investing in, high quality education, health, skills and technology. In order for our economies to be sustainable, we must aim first and foremost to create a learning society and protect vulnerable groups.
I believe we all agree on what needs to be done, but how that is to be achieved and what role the OECD can play are the questions we should try to answer.
Following the global financial and economic crisis of 2008 it seems that a new economic order is taking shape. This is yet an evolving process where new actors as well as the old are trying to define and to redefine their roles. Some of them felt the need to stop and reassess the situation. New and more effective and inclusive platforms have emerged such as the G20 to address issues of concern not only to the developed world but to the emerging countries. With the rise of emerging economies such as China and India we have been witnessing a steady shift of economic power to the East. Given the slow pace of growth in the developed world we have relied on the economic growth of the emerging countries to drive the global economy. Regional cooperation as well as new groupings, such as BRICS have become influential voices in this regard. The political implications of such formations have become apparent with respect to the situation in Syria and Ukraine.
Despite the current geopolitical and economic situation, the OECD remains relevant. However, it needs to adapt to the rapidly changing circumstances. It should to rise to the challenge and transform itself into a global player. For the work and activities of the OECD to be acknowledged and appreciated globally, its "standard setting function" should be further enhanced. However, the arena is already crowded with the presence of a number of active and large international organizations, limiting the room available to the OECD. There are a couple of areas such as taxation and RBC (responsible business conduct) where the OECD has already proven to possess the capacity and expertise to set international standards. In view of the competitive environment, it might be more appropriate to focus on exploring the possibilities of enhancing cooperation with other international and regional platforms and organizations as well as key partners.
We should also keep in mind that what makes standards "global", is the "universal" nature of the criteria they use. As we are committed to making the globe a better place for its citizens, through research, data, analysis and policy recommendations, we should be looking for ways and means to improve prosperity and wellbeing on a global scale. So we should aim global. But the question of "whether the OECD delivers globally" is a challenging one. Can a member driven OECD deliver goods of universal nature? Can the work of the OECD be impartial and objective? Or is it scientific so that it could be adopted globally as facts? The OECD has been criticized by certain circles for being locked into a traditional way of thinking. Taking into consideration the new realities, the OECD should be bold in exploring alternatives to the existing international economic and financial order through a new growth and development paradigm in the interest of all. If this is considered to be beyond our pay-cheque, in other words too ambitious or unrealistic, then we should continue to make contributions to the work of other platforms such as the G20 and G7 towards this end.
We fully support OECD’s global outreach strategy. The organization must reach out to and key partners and beyond for its work to be inclusive and relevant.
The NAEC initiative is a step in the right direction in assessing the future of the organization. Although it was initially launched with a view to dealing with the root causes of the crisis, I am glad we have gone beyond that mandate and looked deeper into what needs to be done to address the new challenges that we face. These are the very challenges that unfortunately have the potential to lead to future economic and social crises if left unaddressed.
The OECD in fact is well equipped with its formidable Secretariat and its well-functioning methods and procedures to transform itself to help countries to overcome these challenges. The outreach policy of the organization will be critical in finding inclusive and comprehensive solutions to the megatrends such as demographic problems, diffusion of power, climate change, food, water and energy security, economic growth and inequality.
Naturally there isn’t such thing as a “one size fits all” solution. Nor are there quick fixes. However the OECD through its own analytical work and its engagement with other platforms such as the G20 and G7, can make a significant contribution to discussions and make its voice be heard globally.
We should also step up cooperation with affiliated organizations, namely the IEA, which throughout the years has done tremendous work thanks to which it has been able to evolve into a global actor in energy issues. I believe increased cooperation with the IEA is essential to reach any adequate conclusion with regard to challenges that face us. I remember a presentation made in the Council a few months ago by the Secretariat the title of which was “Environment is Economics”. While I truly agree with the importance of environment in formulating sound and sustainable economic policies, energy security is the backbone of our economies.
I would like at this point to offer preliminary information of the priorities of the Turkish presidency of the G20 which I regard as one of the principle platforms for global economic decisions. Given the current global economic situation, Turkey will be taking on a serious responsibility in heading this very important platform in 2015.
The Turkish presidency first and foremost will build on the work of the Australian Presidency and ensure that continuity is preserved in all of the work that will be done. Naturally we will put particular emphasis on certain topics in order to support global economic recovery and to enhance resilience.
Our focus will be on developing an effective monitoring mechanism for the implementation of current commitments regarding structural reforms. It is our view that only if these commitments are implemented can new strategies have meaning. Therefore, we will do our best to follow up on the objective to raise G20’s collective GDP by at least 2% over the next 5 years.
Structural reform is a key area for developed and developing countries. We will approach this issue with a view to strengthening the G20’s ties with Low Income Countries (LICs). Thus, reaching out to the developing world to ensure balanced and inclusive growth will be a central theme of our presidency.
One other priority will be investment, particularly long term investment in infrastructure. We believe that long term investment is essential for infrastructure which is key for production and trade. Lifting growth, boosting demand and creating jobs are all investment related issues that will have priority in the agenda of the Turkish presidency.
SMEs will be another priority. SMEs have significant potential to unlock growth and create jobs. This is basically true for all economies regardless of their level of development. During our presidency we will explore ways to encourage more support to SMEs, to elaborate on long term financing opportunities for SMEs, their inclusion in Global Value Chains and to remove obstacles for their growth.
Given that 2015 will be a crucial year for climate change negotiations under the UNFCCC, the issue of climate change and more specifically the climate finance architecture will be accorded due attention by the Turkish presidency. The G20 under the Turkish presidency will have a unique opportunity in November 2015 to give a clear message to the world ahead of the COP 21 which will take place in Paris in December 2015.
Finally, outreach and engagement with non-member countries, international organizations and civil society will continue to be an important part of the G20 agenda during our presidency.
As I stressed earlier, Turkey values the positive contribution of the OECD to the work of G20. We look forward to working closely with the OECD Secretariat and member countries towards our common objectives.
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