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› WELCOME: Rifat Hisarciklioglu › Introduction: Terry McGraw, ICC G20 CEO Advisory Group Chairman › American Turkish Council: US–Turkey Relations › Global Joblessness: The Real Number › B20 Key Recommendations to World Leaders: The Digital Economy

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The Official ICC G20 CEO Advisory Group Publication

November 2015

Contents Welcome 10 / Terry McGraw Chairman, International Chamber of Commerce 16 / John Danilovich ICC Secretary General 17 / Marcus Wallenburg ICC G20 CEO Advisory Group

18 / Rifat Hisarcıklıoğlu B20 Chair, President of The Union of Chambers and Commodity Exchanges of Turkey (TOBB) 19 / Sarp Kalkan B20 Sherpa

20 / Tunc Uyanik CEO, World SME Forum 30 / Howard G. Beasey President and CEO, American-Turkish Council ATC REPORT: 34th Annual US-Turkey Relations Conference

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Lead Feature

Business and Leaders Summit

22 / GLOBAL JOBLESSNESS: THE REAL NUMBER

CONTINUITY, INCLUSIVITY, & CONNECTIVITY

By Jon Clifton

INSIDE G20

G20 Task Force

08 / GCEL: B20 Recommendations Necessitate Digital Economy

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CATCOMPANYInc Publications

The Authoritative G20 Magazine for VIP’s, Delegates, Diplomats and World Leaders

By Captain Samuel Salloum

Cover photograph: Rifat Hisarcıklıoğlu, President of TOBB

12 / GCEL: The G20 Nations Case Study By Cansen Basaran-Symes, R. Dinesh and Suryo B. Sulisto

44 / Achieving UN and G20/B20 Energy Access Goals By Kimball Chen

82 / Energy Efficiency puts Money in your Pocket

Publisher: Chris Atkins Editor-in-Chief: Ana C. Rold

By Niels B. Christiansen

94 / The Rising Global Architecture for Infrastructure By John Denton

Creative Director: Christian Gilliham christian@cgcreate.co.uk T: (+44) 7951 722265

96 / Dual Horizons: How to Turn Short-Term Competitiveness into Long-Term Performance By Andrew Liveris

98 / Human Capital for Emerging Markets By David Iakobachvili

SPECIAL LETTER: UN FCCC. p85

100 / Saving Doha: Focusing on Priority Issues By Jamal J. Malaikah

Economy and Finance 38 / Gender Balance: The Power of Difference By Sylvia Hewlett

42 / Meeting Growing Global Trade Opportunities by Modernizing Infrastructures

By Joy Lutes

46 / Greece and Spain Parallels: Same Paths, Different Outcomes By Oscar Montealegre

54 / Recognition in the Workplace: Extreme Stakeholder Alignment

Contributors: Akshan de Alwis, Amanda Blair, Andrew Liveris, David Iakobachvili, Eli Lovely, Jamal J. Malaikah, Jon Clifton, John Denton, Joel Ruet, Joy Jutes, Katie Crawford, Kimball Chen, Madeline Bielski, Neils B. Christiansen, Oscar Montealegre, Sylvia Hewlett, Ricardo Semler, Richard Rousseau, Dr Robyn Stokes

By Ricardo Semler

56 / The Future of Workplace: Generational Views 58 / The Youth Gap in Employment: An Emerging Crisis Before the G20

Publishing Firm: The CAT Company, Inc.

By Akshan de Alwis

110 / Europe Should Share in the New Silk Road and the Asian Infrastructure Investment Bank By Richard Rousseau

112 / Understanding Change: The 2015 Change Readiness Index By Madeline Bielski

114 / China, Trade, and the TPP: Is America’s Economy Bound to Lead? By Amanda Blair

International Policy 34 / An Extraordinary Meeting: NATO Gathers at Turkey’s Call By Madeline Bielski

36 / Turkey’s Inward-Looking G20 Priorities By Eli Lovely

76 / Could G20 Cities and Mayors be a Vital Ingredient to Turbocharge G20 Growth By Dr Robyn Stokes

80 / The High Seas of Diplomacy By Katie Crawford

88 / The Challenges Facing the Next UN Secretary General By Joel Ruet

90 / Matahara: An Issue With a Larger Context By Madeline Bielski

Sponsored Features 26 / 50 / 66 / 70 / 72 / 104 / 106 /

Antalya: Ancient Pamphylia Today’s Turkish Riviera Eden Roc: “Art de Vivre” in the Dominican Republic Meridian: Creating a Better Energy Future Austin: Indoor Air Quality: A Global Concern AERT Moisure Shield: The Next Generation in Decking Trans Maldivian Airlines: A History Yucheng Group: Situation, Strategy & Tactics in the Development of Financing Lease A2P

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Waters Corp Ettinger Soneva McGraw Hill ICC Wyndham Ankara The Global LPG Partnership Invest In Turkey Eden Roc Corporacion America Meridian AERT Moisture Shield Ettinger G20 Interfaith Summit Turkish Airlines NATPET Go Turkey ATC DSX Inc

Global Advisory Group: Chris Atkins, Peter Atkins Jennifer Latchman, Manuel C. Menendez III (Chairman & Strategic Advisor) Keith Foote Nyborg (United States Ambassador (Ret.) CEO & Founder: Chris Atkins President-Inernational: Mike Nyborg Executive VP-EMEA: Tyrone Eastman Director International: Guy Furl Director International Asia: Anthony Leigh-Jones Sales Executives: Ray Baker Nigel Tate Ron Wayne Ralph Winsor

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Task Force / GCEL

B20 Recommendations Necessitate Digital Economy For a prosperous tomorrow, the Digital Economy is a focal point for B20 recommendations to world leaders

he custodians of the world economy believe that the Digital Economy has the potential to directly and indirectly increase world GDP by about 10%, including a new 6 trillion USD service industry market opportunity, thus generating more than 100 million jobs. The big question that everybody is asking: Who should define what the Digital Economy is and who can we trust to deliver it? This question has been vigorously debated at a global level and more recently at the 2015 Turkey B20 Digital Economy Conference in Istanbul where the Digital Economy has been identified to impact 17 of 25 key B20 recommendations for the G20 Leaders.

taskforces related to Employment, SMEs, Trade, Financing Growth and Infrastructure Investment by maximizing on what technology can make possible today. In brief, the Digital Economy must assist in delivering the B20 Taskforces’ recommendations, thus restoring the health of the global real economy. By the real economy we mean those industries that produce and service the food we eat, the clothes that we wear and the materials to build our cities with emphasis on SMEs, who generate up to 80% of employment in many countries around the world.

Now that the Digital Economy has been recognized as the common theme for implementing global economic policies, it is incumbent upon us to ask the real economy participants at the ground level what the digital tools should look like so they can do a better job, in order to create productive communities in our time and for generations to come. Based on the foregoing, GCEL announced the G20 Nations Case Study at the OECD-B20 joint taskforce sessions held June 2nd 2015 in Paris. The G20 Nations Case Study is an assessment of the entire real economy

The Digital Economy has become more crucial than ever before led by the strong belief that in the current digital era, today’s information technology must be able to help achieve sustained economic growth. “In fact, 2015 was the first year that the Digital Economy conference was at the focal point of the B20 agenda”, remarked GCEL’s Co-Chairman, Captain Samuel Salloum. The common theme we are witnessing is that most global experts around the world are introducing their products and services while attempting to define the Digital Economy. So in other words, providing digital products or services, generating revenue and creating jobs, although important, does not represent in full what the Digital Economy is. We must understand that the objective of the B20 Taskforces’ recommendations is not to construct the Digital Economy to be just another product or service in the marketplace; rather the objective is to deliver the recommendations of the 12 08❙ ❙b20turkey.org b20turkey.org

Captain, Samuel Salloum Co-Chairman Global Coalition for Efficient Logistics (GCEL)

Thought Leadership value stream across 19 industry clusters from shelf to shelf including; buyers, sellers, logistics service providers, governments, banks and insurance firms. This is not just another assessment. We are entrusted to convey the voice of the G20 Citizens to their leaders; therefore, we have designed a new global standard to reflect the needs of the real economy participants on the ground. The G20 Nations Case Study is planned to be completed by early 2016 and involves the collective contributions of more than 80 government ministries, industry associations and academic institutions. We’ll collect nearly 1.2 million data points through face-to-face interviews, ensuring accurate responses using animated show-cards with multiple options, throughout specific country economic zones covering the entire spectrum of large, medium and small enterprises.

WHILE FISCAL, MONETARY & TRADE POLICIES ARE IMPORTANT WE MUST FOCUS OUR EFFORTS TO ENLARGE THE ECONOMIC PIE INSTEAD OF COMPETING ON THE SAME ONE.

To date, more than 82% of the G20 Nations citizens have committed to conduct their national assessments as a first step to empower the Digital Economy. So far, approximately 37% have been completed and the results have been staggering: 78% of the real economy participants surveyed do not have an integrated system and 90% have collectively agreed on a common definition on what the Digital Economy tools should look like to reduce their costs, expand their market reach and ease their access to greater financing.

delivering the required tools at no cost to the end user.

On October 6 in Istanbul, more than 300 technology industry executives attended the 2015 B20 Digital Economy conference that highlighted the importance of the G20 Nations Case Study. The B20 introduced the key note panel led by GCEL as “The Digital Revolution: Voice of the G20 Citizens”.

The Digital Economy is the tipping point to a new era of prosperity. Consider this; Our global business-tobusiness expenditures total USD 118 trillion according to the VISA Commercial Consumption Expenditure Index and is forecasted to reach USD 235 trillion by the year 2025. An Asia Development Bank survey in 2012 revealed that of USD 4.6 trillion in trade finance requests, more than USD 1.6 trillion was rejected. Think about this, just USD 3 trillion was approved representing only 3% of the total business-tobusiness market. This is an enormous lost opportunity for the financial industry and similarly for the insurance and technology industry.

Diagnosis without providing the cure might aggravate the condition, therefore it is of paramount importance to call upon the experts of the world to remedy the situation. In this case the doctors are the technology industry. The top 26 technology firms of the world have committed to participate in an equal opportunity process as a first step to be selected as a qualified trusted network to deliver what the real economy participants demand. The selection will be based on offsetting geopolitical and monopolistic concerns while

The size and scope of the Digital Economy calls upon public and private organizations to work in concert by capitalizing on each organization’s capabilities and jurisdiction. Thus, introducing an independent global monitoring mechanism that will offset geopolitical and monopolistic concerns, at the same time securing benefits to all. The foregoing will ensure rapid adoption of the Digital Economy.

While fiscal, monetary or trade policies are important we must focus our efforts to enlarge the economic pie instead of competing on the same one.

THE DIGITAL ECONOMY IS THE TIPPING POINT TO A NEW ERA OF PROSPERITY

Antalya. Antalya.Turkey Turkey2015 2015❙ ❙09 13

The Official ICC G20 CEO Advisory Group Publication

Welcome

Terry McGraw Chairman of the International Chamber of Commerce

The International Chamber of Commerce (ICC) is – and has been throughout its long history – a steadfast rallying point for those who believe, like our founders, that strengthening commercial ties among nations is not only good for business but good for global living standards and good for peace. From our perspective, the G20, with its mixed membership of advanced and emerging economies, is uniquely positioned to address some of the world’s most important and intractable economic problems and will increasingly shape global, intergovernmental policies that affect business internationally. To that end, we formed the ICC G20 CEO Advisory Group to spearhead global business engagement with G20 governments at the highest levels and to advocate for business priorities within the G20 policymaking processes. I’m happy to note that for the sixth consecutive year, ICC CEOs held key leadership positions in the B20 task forces and the ICC is now recognized by G20 leaders as an important strategic business partner in the push for economic growth and job creation globally.

ICC has been an unfaltering proponent for a strong, rules-based multilateral trading system embodied by the World Trade Organization (WTO). As Co-chair of the B20 Turkey Trade taskforce, I have noticed a paradox at the heart of trade policy-making. On the one hand, the multilateral negotiating agenda is experiencing a renaissance with a range of deals on the table that, with the right political leadership, could provide a major stimulus to the global economy. But at the same time, we are seeing governments subtly employing regulatory measures — or non-tariff barriers — to restrict international trade. This juxtaposition of policy and action is identified in two key ICC reports launched this year. In May, we released a new report, “From Drift to Deals: Advancing the WTO Agenda”. The report sets out a comprehensive roadmap for world trade in the 21st century, including key recommendations to WTO members in the run-up to the Tenth Ministerial Conference (MC10) to be held in Nairobi in December 2015. In September, we launched the third edition of the ICC Open Markets Index (OMI) as part of the ICC World Trade Agenda. The biennial report monitors whether governments are following through on their commitments to create genuinely open economies. The repost shows that, despite repeated pledges to enable trade as a driver of growth and job creation, G20 economies are failing to demonstrate global leadership on trade openness: only Germany placed among the world’s top 20 open markets. G20 leadership is critical to keeping the trade agenda moving forward, while also

G20 leadership is critical to keepinG the trade aGenda movinG forward, while also ensurinG that protectionism does not constrain the much-need economic Gains from trade. 10 ❙ b20turkey.org

ensuring that protectionism does not constrain the much-need economic gains from trade. For this reason, the ICC and the B20 have made ratification and full implementation of the WTO Trade Facilitation Agreement (TFA) our number one priority, which would add $1 trillion to Global GDP and 21 million jobs (18 million in developing countries). As of 8 October 2015, 50 countries – including all of the European Union – have ratified the agreement, but until the TFA is ratified by 107 WTO members, it cannot come into force and be fully implemented. The B20 has therefore called on G20 governments, as well as their trade ministers, to demonstrate global leadership by committing to ratifying the TFA before MC10 in December. The multilateral trading system remains the best defense against protectionism and the strongest force for growth, recovery and development. ICC is dedicated to ensuring that global business is an active and constructive partner with WTO members to help strengthen WTO rules and adapt then to the needs of 21st century trading. International business stands ready to work with G20 governments in advancing their growth and jobs agenda before, during and after the G20 Summit events – from Turkey to China and beyond. Together, we can create new opportunities on a global basis that will spur economic growth, create new jobs and increase prosperity and peace. Terry McGraw Chairman of the International Chamber of Commerce

The Official APEC Publication 2012

THOUGHT LEADERSHIP

APEC FACTS taturio. Itatis min reicimillab imi, simus maximet ad eat.Porest que orest, exerciae dunt anit et quaest exerrum veliquam, volor magnihi taturio. Itatis min reicimillab imi, simus maximet ad eat.iamus sit a quas quam intiae od quia qui odignis adionsequi occus mo odi volecto ritistis endit eresciiscit, nis quis eaque poremosa ventiatem as re, sectius aut eos rehenihitat pa dolupta testio et unt molore inciis et eic tem nam quisimolor ati imossit asimagnias dolorpos aut hiliqui atecusam dolum.

quisimolor ati imossit asimagnias dolorpos aut hiliqui atecusam dolum exceaque endae ero cus et aspiend aeptas quis eosam es ullest alias aped mo ipsum quaepel mos adi dolo ommoluptas sim si nonse vendelit asitataque nissimin consequam nullaccab in nonsequid molorest, exerciae dunt anit et quaest exerrum veliquam, volor magnihi taturio. Itatis min reicimillab imi, simus maximet ad eat.Porest que re parum laut remporesti cum ea quate restibusdae quis aliquodi ide ex este endit ut repeles ilist, saerum autectus que non cuptaturio erferch illaborum si beaquate pe nosam, ius am et prae et quatatqui que ima voluptatium. endae ero cus et aspiend aeptas quis eosam es ullest alias aped mo ipsum quaepel mos adi dolo ommoluptas sim si nonse vendelit asitataque nissimin consequam nullaccab in nonsequid mol dunt anit et quaest exerrum veliquam, volor magnihi taturio. Itatis iamus sit a quas quam intiae od quia qui odignis adionsequi occus mo odi volecto ritistis endit eresciiscit, nis quis eaque poremosa ventiatem as re, sectius aut eos rehenihitat pa dolupta testio et unt molore inciis et eic tem nam quisimolor ati imossit asimagnias dolorpos aut hiliqui atecusam dolum exceaque endae ero cus taturio. Itatis min reicimillab imi, simus maximet ad eat.Porest que re parum laut remporesti cum ea quate restibusdae quis aliquodi ide ex este endit ut repeles ilist, saerum autectus que non cuptaturio erferch illaborum si beaquate pe nosam, ius am et prae et quatatqui que ima voluptatium. endae ero cus et aspiend aeptas quis eosam es ullest alias aped mo ipsum quaepel mos adi dolo ommoluptas sim si nonse vendelit asitataque nissimin consequam nullaccab in nonsequid mol dunt anit et adi dolo ommoluptas sim si nonse vendelit asitataque nissimin

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Vital insights that help shape what’s possible. simus maximet ad eat.Porest que dunt anit et quaest exerrum veliquam, volor magnihi taturio. Itatis min reicimillab imi, simus maximet ad eat.Porest que orest, exerciae dunt anit et quaest exerrum veliquam, volor magnihi taturio. Itatis min reicimillab imi, simus maximet ad eat.iamus sit a quas quam intiae od quia qui odignis adionsequi occus mo odi volecto ritistis endit eresciiscit, nis quis eaque poremosa ventiatem as re, sectius aut eos rehenihitat pa dolupta testio et unt molore inciis et eic tem nam quisimolor ati imossit asimagnias dolorpos aut hiliqui atecusam dolum exceaque endae ero cus et aspiend aeptas quis eosam es ullest alias aped mo ipsum quaepel mos adi dolo ommoluptas sim si nonse vendelit asitataque nissimin consequam nullaccab in nonsequid molorest, exerciae dunt anit et quaest exerrum veliquam, volor magnihi taturio. Itatis min reicimillab imi, simus maximet ad

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BIS ETUR, VERION PE PRERCHICAT. MUS POSANT UT VOLORP SIM EA NIM QUO MAGNIM RES MOLUPTIS ILICIDUNT CONSEQUAM NUS EIC TEM. Vladivostok. Russia 2012 ❙ 00

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The Official ICC G20 CEO Advisory Group Publication

Task Force / GCEL

Executives, from the left:

Kıvanç Onan, PayPal - Turan Erdoğan, Vestel - Santhosh Kumar Madathil, Wipro Captain Samuel Salloum, GCEL - Nikolaus Lindner, eBay Corporate Services GmbH Çiğdem Ertem, Intel - Bernard J. Dunn, Boeing

THE VIEW BY NATIONAL BUSINESS ASSOCIATIONS OF THE G20 NATIONS CASE STUDY

Cansen Basaran-Symes, President Turkish Industry and Business Association (TUSIAD) Chairwoman - Board of Directors of Allianz Insurance and Allianz Life and Pension - Turkey

14 ❙ b20turkey.org 12

uring the recent 2015 B20 Digital Economy Conference, you commented that as we are coming toward the end of the G20/B20 Turkish Presidency, you hope and believe that the initiative of integrating the Digital Economy into the G20 leaders agenda is just the beginning of a process that will be taken on to the Chinese presidency, and will assume more importance next year and upcoming years. Why should the Digital Economy be a priority of G20 leaders? “The B20 Turkey has prioritized the Digital Economy as a horizontal crosscutting issue across all the Taskforces in 2015. As an enabler of growth in every sector, the Digital Economy is closely intertwined with the G20 process on infrastructure, trade, growth and employment, as well as transparency

in financial flows”, commented Cansen Basaran-Symes. While working on the issues related to the Digital Economy and as a result of consultation among B20 Coalition members and the business community, eight main challenges have been identified: • First, safeguarding creativity and innovation, because the Digital Economy has opened new vistas for the content and its creators in terms of access to all global markets. • Second, broadening the knowledge and skill horizon, because a skilled workforce with the requisite knowhow, especially STEM - science, technology, engineering, mathematics skills - will be crucial for the Digital Economy and therefore must be nurtured. • Third, building multi-tiered technology

Thought Leadership

•

system for SMEs, as we repeat frequently, because technology infusion and enhancement is a critical element for growth of SMEs in all markets. Fourth, facilitating investment and infrastructure, because the constant requirements in infrastructure improvement, particularly in ultrafast broadband access needs to be significantly seriously addressed. Fifth, securing the Digital Economy, because ensuring IT security and controlling cyber crime can go a long way in building trust in the digital world. Sixth, expanding the borders, because combatting restrictions on cross-border data flows and server location, while facilitating businesses to sell and aiding consumers to buy online across borders can unlock many new opportunities for businesses. Seventh, addressing taxation issues is crucial, because the process of e-commerce has raised a plethora of changes for sovereign states to raise tax revenues.

• Eighth, legislation on principal based in a digital world, because the digital world evolves quickly and it is important to keep pace in increasingly shorter innovation cycles – and innovation cycles are getting shorter and shorter every other day as we know. It is highly welcomed for the G20 to point the way forward and also assist in providing the tools for our communities to prosper. However, each citizen around the world must be part of the solution to create productive communities committed to business excellence setting the foundation for a secure and prosperous future. In order to harness the power of the Digital Economy and to address these challenges, Turkey has taken the first step by conducting the Turkey G20 Nations Case Study. This Study was conducted by GCEL in cooperation with TUSIAD and included contributions from Boğaziçi University Department Of International Trade, Ministry of Economy, Ministry of

Science, Industry and Technology, and Ministry of Transport, Maritime Affairs and Communication. The Study is the result of an initiative that aims to strengthen global trade efficiency by connecting all real economy participants from small, medium and large enterprises to each other, and with the public sector through a single digital platform. Based on nearly 70,000 data points collected and analyzed, the Turkey G20 Nations Case Study Report presents the voice of the real economy participants who have stated what kind of Digital Economy tools they need to be more competitive and prosperous in the global marketplace. It is anticipated that upon implementation of new digital tools, Turkey will reduce its trade costs by USD 16.3 billion, increase trade by 35 billion and create 2.69 million jobs by 2025. The Turkish Case Study is the first of several to occur in Europe along with the national assessments being performed in the rest of the world regions.

Antalya. Turkey 2015 ❙ 15 13

The Official ICC G20 CEO Advisory Group Publication

Task Force / GCEL

R. Dinesh, Chairman Confederation of Indian Industry - Institute of Logistics (CII-IL)

Managing Director of TVS Logistics Services Limited

he Digital Economy is the common denominator that enables the implementation of tangible and quantifiable polices that have a rapid and direct impact on the real economy. What else do we need in order to enact policies achieving the ambitions of the world’s citizens? “It is vital that the voice of the real economy participants is taken into consideration. This will provide a clear and unequivocal mandate to G20 leaders to set the framework for a defined Digital Economy that is focused on market expansion and growth in the real economy”, commented R. Dinesh. However, having good policy working in concert with the voice of the G20 Citizens also requires the engagement of industry experts who can deploy the tools required to unleash the full potential of the Digital Economy. This completes the foundation of an implementable policy formula to ensure the enactment of good policies towards achieving the goal of sustainable economic growth.

16 ❙❙ b20turkey.org b20turkey.org 14

The Digital Economy comes at a good moment in time for India’s economy. The use of new digital tools for trade will reduce the trade costs for millions of our SMEs, ease their access to financing by reducing underwriting costs and transaction risks as well as connecting them with global markets. This is the foundation of de-risking needed when the world is focused on rebalancing the global economy among high, mid and low income countries. Furthermore, with increased efficiency provided by these digital tools, India will greatly improve its global competitiveness and boost its share of the services industry. As a result, the buying power of our businesses will expand providing them the ability to acquire higher value added products and services, both domestically and internationally. With this increased buying power spread across Indias’ growing 1.3 billion population, we anticipate the Digital Economy, defined by the participants at the ground level, will drive a significant increase in India’s domestic employment and total trade as well as its share of the gross world product. This opportunity has been confirmed via the findings of India’s G20 Nations Case Study that was performed by CII in collaboration with the Ministry of Shipping, Indian Institute of Management Udaipur and GCEL. This case study diagnosed India’s value stream and defines real economic integration presenting the road map to empower the Digital Economy. When the defined tools are implemented, the final report indicated that India will realize a reduction in its landed import / export costs by USD 22 billion and an increase in trade by USD 128 billion. Since nearly 75% of India’s businesses have no vertical system, this economic opportunity is achievable upon the implementation of a global platform providing point to world integration.

Being the Silicon Valley of the East, India’s technology industry recognizes that these significant dynamics present a new multi-billion dollar market opportunity by delivering the required Digital Platform. These are the main reasons why several of India’s top technology firms are poised to take a quantum leap in leading this new digital innovation and have executed strategic agreements as a first step towards being selected to deploy the digital platform globally. They recognize they cannot deploy such a global solution alone, can finally deliver what their customers demand and they can more than double their earnings through a business model generating new and sizeable revenue streams. Given all the benefits to be realized by governments, buyers, sellers, finance, technology, and insurance firms, we are looking forward to the deployment of the Digital Economy benefiting India and its trade partners throughout the world.

SEVERAL OF INDIA’S TOP TECHNOLOGY FIRMS ARE POISED TO TAKE A QUANTUM LEAP IN LEADING THIS NEW DIGITAL INNOVATION

Thought Leadership others insist on the exact opposite– higher trade volume is the necessary prerequisite to justify the investment in physical infrastructure projects in the first place. What is the solution to this dilemma in order to grow trade in ASEAN?

Suryo B. Sulisto, Chairman Indonesian Chamber of Commerce & Industry (KADIN)

Founder and Chairman, Satmarindo Group

oday, international experts disagree as to economic development priorities. Some say there should first be investment in sufficient physical infrastructure to expand trade, while

THE USE OF SOFT INFRASTRUCTURE WILL OPTIMIZE THE UTILIZATION OF EXISTING PHYSICAL INFRASTRUCTURE CAPACITY.

“With limited funding available to meet ASEAN’s nearly USD 1 trillion infrastructure needs, a bold new solution to this dilemma is required and the use of Soft Infrastructure is that solution”, remarked Suryo B. Sulisto. The use of Soft Infrastructure will optimize the utilization of existing physical infrastructure capacity. It will also provide a self-monitored dashboard to ensure the transparency and visibility of trade related information for private and public sectors to prioritize investments and maximize their economic returns. In all, Soft Infrastructure, or new Digital Economy tools, will reduce trade costs, increase competitiveness and grow trade. The use of technology to maximize physical infrastructure capacity utilization has been proven successfully by Germany where it regularly reaches the world’s top rankings in trade efficiency. This compares to other countries, which also have vast financial resources, whose trade efficiency ranks much lower since their focus is placed primarily on hard infrastructure investment. The use of technology has historically proven to create significant advancements within societies. For example, due to its large geography and many disparate islands, Indonesia once lagged behind the world in terms of telecommunications capability.

With the advent of cellular communications, Indonesia even jumped ahead of the United States that had invested heavily in analog switches and copper wires. Hence, the use of technology has contributed significantly to Indonesia’s economic growth that has averaged 5.4% per year over the past 15 years becoming the 16th largest economy in the world. The Indonesia G20 Nations Case study represents the first step by our country to adopt new digital tools to become more efficient within our value chains and better connect with markets around the world. This case study was performed by KADIN in collaboration with GCEL and the Ministry of Trade, Coordinating Ministry of Economic Affairs, Ministry of Industry, as well as the Ministry of Communication and Information Technology. The Indonesia Case Study findings yielded that by empowering the Digital Economy we can create real economic integration between Indonesia and its trade partners, resulting in an increase in ASEAN’s trade by USD 188 billion and in Indonesia alone by USD 42 billion. Indonesia is the world’s 4th largest country by population with a youthful and technology savvy workforce representing tremendous market potential. Since we live in the digital era, our businesses realize that we must embrace what technology makes possible today towards meeting their needs to achieve sustainable economic growth.

Antalya. Turkey Turkey 2015 2015 ❙❙ 17 Antalya. 15

The Official ICC G20 CEO Advisory Group Publication

Welcome

John Danilovich ICC Secretary General

As the world business organization – with a worldwide network reaching over 6 million companies, chambers of commerce and business associations in more than 130 countries – the International Chamber of Commerce (ICC) is committed to ensuring that the voice of business is heard and that business interests are considered by policymakers at the highest levels. In this context, the G20 policy agenda has been a natural focal point for ICC to ensure that the direction set by Heads of Government is aligned with core business goals of open trade and investment, economic growth and job creation. ICC has served as a strategic, global business partner to successive host countries in Korea, France, Mexico, Russia, Australia and most recently Turkey. Over the last several years, the ICC G20 CEO Advisory Group has joined with host country business associations, CEOs from corporations large and small to collaborate on the formulation of business-based

policy recommendations through the annual Business-20 (B20) process. Among the defining aspects of this year’s B20 has been the increased focus on smalland medium-sized enterprises (SMEs). SMEs are vital to the world economy—they employ more than two-thirds of the private-sector workforce, and provide over 80 percent of net job growth. In recognition of the value of these businesses to the global economy, B20 Turkey championed the creation of the World SME Forum (WSF). The WSF is a new global platform co-founded by ICC and the Union Chambers of Commerce and Industry of Turkey (TOBB) to amplify the voice of SMEs and unlock their potential to stabilize the economy and stimulate economic growth, trade and employment. The WSF will play a key role in helping SMEs tap global markets for the first time—and will ensure that global policies are designed with the needs of small businesses and entrepreneurs in mind. Never before has the B20 taken such a robust approach to correcting the imbalances in the SME sector and I would like to thank the Turkish government and B20 Turkey for championing economic inclusiveness as one of the key priorities in 2015. Notably, the G20 Finance Ministers and Central Bank Governors Meeting officially welcomed the establishment of the WSF in their September communiqué— further buttressing the initiative. Improving international cooperation and advocacy has also been an important feature of B20 Turkey. For this reason, B20 Turkey established the B20 International Business Advisory Council (IBAC) chaired by Muthar Kent, CEO and Chairman of the Coca-Cola Company. The group is composed of CEOs and business association heads from each of the G20 countries and aims enhance business dialogue and engagement with governments

Another innovAtion this yeAr wAs the first ever B20 energy forum in istAnBul in octoBer orgAnized in pArtnership with B20 turkey, icc And the internAtionAl energy Agency (ieA). 16 ❙ b20turkey.org

in advance of the G20 Antalya Summit. I was honored to accept B20 Turkey Chairman Rifat Hisarcıklıoglu’s invitation to serve as IBAC’s international secretariat. The role is a natural extension of ICC’s historic responsibility to convey business priorities to national and intergovernmental officials and draws upon ICC’s experience as a strategic partner to the B20 since the Seoul Summit in 2010. Another innovation this year was the first ever B20 Energy Forum in Istanbul in October organized in partnership with B20 Turkey, ICC and the International Energy Agency (IEA). The B20 Energy Forum was held alongside the first ever G20 Energy Ministerial and provided a unique opportunity for business executives to share priorities with Energy Ministers ahead of the G20 Leaders’ Summit in Antalya in November. Members from the ICC G20 CEO Advisory Group played a lead role in the development of this year’s energy recommendations, which were presented directly to G20 Energy Ministers during a special B20/G20 session of the Energy Forum. The B20 Turkey process has already demonstrated significant achievements, and I’m confident that the Antalya Summit will produce tangible outcomes on this year’s business priorities to help support growth, jobs and opportunity for all. I look forward to continuing ICC’s long-standing partnership in the B20 process in the coming years to ensure that the voice of business is heard, and their interests taken on board by policymakers at the highest level. John Danilovich ICC Secretary General

Welcome

Marcus Wallenberg Chairman, ICC G20 CEO Advisory Group

The G20 agenda bears upon core business goals for trade, investment, economic growth and job creation and will increasingly shape intergovernmental policies that affect business internationally. In order to play a constructive role in representing business views to G20 governments, the International Chamber of Commerce (ICC) has established the ICC G20 CEO Advisory Group. The Group comprises approximately 40 CEOs actively concerned with the G20 policy agenda and keen to engage with peers, set priorities and speak out on the issues most vital to business. Over the last several years, the ICC G20 CEO Advisory Group has served as a strategic, global business partner to successive G20 host countries in Korea, France, Mexico, Russia, Australia and now here in Turkey. Many of the CEO members of the ICC group were early business activists on the G20 agenda, and continue to be deeply engaged in the development and advocacy of B20 policy recommendations. It is with pleasure that I have noted a steady improvement in government-

business dialogue since Korea invited business into the process through the G20 Business Summit in Seoul in 2010. G20 governments now recognize the B20 as an important stakeholder, and the presentation of B20 recommendations to Turkish President Recep Tayyip Erdogan during the B20 Conference in Ankara in September constituted the sixth consecutive year of CEO-level business engagement in the G20 policy agenda. Collectively, the recommendations presented to the G20 in Korea, France, Mexico, Russia, Australia and now Turkey comprise a seminal compendium of international business priorities and recommendations that continue to be shaped and reshaped as the process moves from Summit to Summit. This year the B20 has focused on ensuring inclusive and robust growth through collective action in accordance with the Turkish G20 Presidency’s “three I’s”– Inclusiveness, Implementation and Investment. In response, B20 Turkey, under the leadership of B20 chair Mr. Rifat Hisarcıklıoglu, has organized itself under six business-led taskforces: Trade, Infrastructure and Investment, Financing Growth, Employment, Anti-Corruption and SMEs and Entrepreneurship. Each taskforce has identified a number of critical barriers to growth and employment across the “three I’s” and prepared a set of policy recommendations that, if implemented, would promote and strengthen economic activity and create jobs across the G20, and beyond. Together, the B20 recommendations address key challenges across all G20 members: the need for more trade and investment; safely regulated infrastructure; accessible and affordable finance; more capable and active SMEs; and human capital in the right place, at the right time, with the right skills. In addition, the recommendations underline the importance that G20 members

continue to effectively implement commitments already made to improve growth and build resilience, and to make the playing field level via anti-corruption policies. A key prerequisite for economic growth is a stable, predictable, and transparent investment environment that is conducive to business. It is for this reason that this year’s B20 recommendations have a strong focus on investment. In this regard, the ICC has strongly supported this year’s B20 recommendations urging the G20 to demonstrate leadership on investment and to commit to international investment principles related to foreign direct investment. Collectively, these actions could generate US$15 trillion to US$20 trillion-worth of additional infrastructure capacity by 2030. While reaching specific, tangible, and realistic outcomes in Antalya is critical, the G20 needs also to focus on implementing previously agreed recommendations. With this in mind, the ICC G20 CEO Advisory Group created the ICC G20 Business Scorecard as a tool to monitor the G20’s performance on implementing B20 recommendations. This year’s installment of the annual Scorecard reveals increasing traction for business recommendations, but also shows that there is room for improvement for both the B20 and G20 in terms of better communicating priorities and translating these into government actions. ICC will remain fully engaged in the B20 process to rally ICC’s far-reaching network of companies and chambers of commerce to advocate for G20 Leader endorsement of the B20 recommendations through the end of the Turkish B20 cycle and into the Chinese 2015 Presidency. Marcus Wallenberg Chairman, ICC G20 CEO Advisory group

It Is wIth pleasure that I have noted a steady Improvement In governmentbusIness dIalogue sInce Korea InvIted busIness Into the process through the g20 busIness summIt In seoul In 2010. Antalya. Turkey 2015 ❙ 17

The Official ICC G20 CEO Advisory Group Publication

Q&A

Rifat Hisarcıklıoğlu B20 Chair, President of The Union of Chambers and Commodity Exchanges of Turkey (TOBB) Since 2010, the Business 20 – or B20 for short – has operated as the G20’s most prominent and influential outreach group. In this capacity, it has convened business executives, association leaders, and policy experts from across the world every year to develop new recommendations relevant to the global business community and economy. Below, Rifat Hisarcıklıoglu and Sarp Kalkan answer our questions about B20 Turkey, and outline the B20’s priorities and recommendations this year for the global economy, with an emphasis on generating growth, encouraging inclusivity, and developing a global system that works for everyone. Q: How did the B20 process unfold? What did the year entail? A: When Turkey was formally awarded the G20 and its constituent outreach groups for 2015, Prime Minister Davutoglu introduced a strategic vision for the G20 that placed an emphasis on inclusiveness, implementation, and investment (the three I’s).We at the B20 followed this lead and worked to create an inclusive conference that prioritized action over mere talk. In this spirit, the B20’s six taskforces [Trade, Infrastructure & Investment, Anti-Corruption, Financing Growth, Employment, and SMEs & Entrepreneurship] developed recommendations that were ambitious yet realistic, and were beneficial to countries both within and outside the G20. These taskforces, which were comprised of 680 members total from various different professional and personal backgrounds, met in April and June and held conference calls throughout the year to develop their recommendations. Additionally, for the first time ever, the B20 held regional consultations in 9 different countries to gather feedback and ideas for the recommendations. Due to all of this support, we were able to successfully produce 6 comprehensive taskforce reports and 19 priority recommendations for G20 leaders to consider. In the end, the process was quite exhaustive and far-reaching, and a lot of bright individuals were needed to ensure success. We were fortunate to work with such talented taskforces, and with incredibly capable knowledge partners and experts. Moreover, our staff here at the B20 Secretariat worked countless hours to put together our final reports and priority lists. To them, and everyone who contributed, we owe a big thank you.

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Q: This year, B20 Turkey introduced a new taskforce on SMEs and entrepreneurship, in addition to the five taskforces it inherited from the Australian cycle. What was the impetus for the creation of this new taskforce? Why are small businesses seen as so crucial to B20 Turkey? A: We introduced the new SMEs & Entrepreneurship Taskforce this year in the spirit of inclusiveness that Prime Minister Davutoglu initiated. Given that SMEs now account for 2/3 of all private sector jobs globally and 80% of net job growth, we simply felt that the time was ripe for the B20 to more formally represent small businesses in its recommendation development process, and to give more focus to the challenges they face. Such challenges include financial regulations which have choked off SME lending post-2008, as well as skills and managerial gaps that have increasingly worsened for small businesses in recent years. Q: What is the immediate value of B20 Turkey for the business community in Turkey? And what medium and long-term effects/benefits do you think this process will produce? A: The first obvious short-term effect will be in regard to SMEs. In Turkey, like in many other countries, SMEs are critical to the success of the broader national economy. With that in mind, I believe the work we did this year with the aforementioned SMEs & Entrepreneurship Taskforce will do much to improve Turkey’s overall business environment (as well as that of other nations), by improving SME access to financing (including alternative sources) and enhancing their competitiveness via further integration into international markets and global value chains. It is also my hope that the B20’s support for the recently-established

World SME Forum will help it to become an institution that can ably assist SMEs both domestically and globally, and advance the SME agenda moving forward. Another immediate effect which will resonate in the medium-term, as well, will be the dialogue and engagement we’ve initiated with the global business community on issues such as trade, financing growth, and employment. Additionally, another likely benefit will arise from B20 Turkey’s insistence on finding ‘implementable’ solutions to problems, ala the implementation mandate from G20 Turkey. The identification of global problems only amounts to half the story, after all; we need tangible plans and ideas that can be put into practice. In the medium-term, I also believe that as Turkey’s business community, we will learn a significant amount from leading global practices and improvement strategies, particularly in regard to growth and employment. Practically, the B20 is a huge platform through which businesses and governments can interact so as to inform and provide insight into the decision-making processes at the governmental level. Therefore, in the long term, I am expecting that this process will fortify its position to a power that shapes the agendas of G20 and non-G20 countries. As for Turkey and the Turkish business community, one of the most important long-term effects will be increased collaboration and better opportunities for dialogue between all stakeholders and partners of the economy. ■ B20 Turkey Chair, M. Rifat Hisarcıklıoglu is the President of the Union of Chambers and Commodity Exchanges of Turkey (TOBB), a role he has held since 2001. Mr. Hisarcıklıoglu is also currently the Deputy President of EUROCHAMBRES, the Vice President of the Islamic Chamber of Commerce, Industry, and Agriculture, and a board member of the International Chamber of Commerce. Additionally, Mr. Hisarcıklıoglu serves as the Vice President of the Confederation of Asia-Pacific Chambers of Commerce and Industry (CACCI).

Q&A

Sarp Kalkan B20 Sherpa

Q: What has B20 Turkey’s relationship with G20 Turkey been like throughout the year? How have the two institutions worked together? A: Throughout the process, we have maintained a close relationship and consistent dialogue with G20 Turkey. I am extremely grateful for all their assistance and openness throughout the year. As the G20’s biggest engagement group, B20 Turkey worked in collaboration with the G20 Working Groups, and participated in their stakeholder meetings in order to present recommendations and gather feedback. The same interaction process was also valid for the ministries and other governmental agencies in charge of steering the G20 process. We also had the chance to meet the G20 Sherpas a number of times to reflect on their inputs and concerns. The nature of the interaction covered issues of content and logistics; however, the balance tilted more towards the content of the taskforce recommendations. Q: Can you tell us about the topics introduced by B20 Turkey this year? What was new/innovative? A: As Rifat Bey mentioned, we introduced a new taskforce this year to specifically address the challenges faced by the SMEs worldwide. This is one area which has been integrated in different taskforces and themes during the previous cycles. By making SMEs more visible, we aimed to draw attention to broader issues impeding global growth and employment. For instance, we have recommended various means of integrating SMEs into global value chains. Another implementable recommendation involves improving SME access to the digital economy and innovation ecosystems. All of this will be beneficial in terms of boosting productivity Similarly, this year, we made “digital” a cross-cutting theme across all B20 Turkey taskforces. Each taskforce paid specific attention to the theme in identifying potential contribution areas for the overarching global problems that taskforces sought to address. These recommendations are compiled under the

scope of the B20 Turkey Policy Summary. To further and deepen the discussion on the digital economy, we also organized the B20 Digital Economy Forum in October in Istanbul, which drew over 300 participants. There, debates concerning the current and future outlook of the digital sphere were very effectively fostered. We also launched the B20 Turkey Digital Economy Paper which included the B20’s recommendations on the digital sphere and beyond. We believe that this is a vital step towards acknowledging this important topic as a facilitator of global growth. Q: What do you believe the legacy of B20 Turkey will be in the coming years? I think this answer will largely be defined by who you ask. To the average small business, B20 Turkey’s legacy will be defined by the success of global efforts to increase access to financial markets and global value chains. To the private and public sectors of the world, I believe the success of the Trade Facilitation Agreement will be key. To many, our ability to advance the conversation on infrastructure, corruption, and unemployment will be most noteworthy. These are all topics we’ve pushed hard this year. However, these are complex issues, and it will take some time for most of them to register progress. So, the global community and future B20 presidencies will have to stay vigilant for any kind of significant legacy to be assured. Q: What are your hopes and expectations for next year’s B20 China Presidency? First of all, there is no doubt in my mind that China will do a fantastic job hosting the G20 and B20. I know they have already put in a lot of work and preparation, and from my conversations with their team, it is obvious they care deeply about many of the issues we have raised this year. I know free trade will remain a top issue, and I suspect they will do much to promote programs such as the Silk Road Project. I also hope that they carry on the issue of digital trade, and continue to work on solutions to digital protectionism and other obstacles. Given how quickly the industry is growing and how much of the

future will be dependent on it, I think it’ll be critical for B20 China to fully embrace the topic. Furthermore, I hope that B20 China will continue to examine innovative solutions to infrastructure funding gaps and issues related to foreign direct investment. After all, it will be vital for both G20 and non-G20 countries to drum up more infrastructure investment in the future if they are to realize their potential. The good thing is that momentum is definitely there. Our Infrastructure & Investment Taskforce was our largest, and the topic seemed to attract the most attention this year. So, there is an eagerset of leaders and policy experts out there for the Chinese to work with. ■

B20 Turkey Sherpa, Sarp Kalkan has worked as the senior policy adviser to TOBB President Rifat Hisarcıklıoglu since 2011. In this role, he has developed policy positions on key economic issues, as well as conducted stakeholder management with both public and private institutions. Between 2005 and 2011, Mr. Kalkan worked as a policy analyst at the Economic Policy Research Foundation of Turkey (TEPAV), where he managed projects on the EU harmonization process, the financial industry, the retail industry, and employment policy.

Antalya. Turkey 2015 ❙ 19

The Official ICC G20 CEO Advisory Group Publication

Welcome

Tunc Uyanik CEO, World SME Forum

core to economic growth and poverty alleviation, has not been fully realized. Major issues continue to impinge on the development of SMEs: • A dearth of official representation and advocacy both at country and international levels; • A lack of targeted supporting facilities that are able to deliver the promise of vibrant technical skills and expertise that are essential to the well-functioning of SMEs; • A lack of effective mechanisms to link promising SMEs to potential markets and more broadly to Global Value Chains (GVCs).

As the Turkish G20/B20 nears completion, participants from a wide spectrum of civil, economic and political society, including media and the general public have begun to deliberate on their main recommendations and achievements. Considering significant efforts and contributions from individuals, taskforces, institutions and organizations, and given the breadth of topics touched, it is difficult to pinpoint any one achievement. However, when I look back to my involvement as Chair of the Turkish B20 Steering Committee during the last ten months, what strikes me as probably the major achievement for 2015 is the amplification of the voice of small and medium enterprises (SMEs) provided by the Turkish Presidencies of the G20/B20. This is a signal achievement. As we know, SMEs account for the lion’s share of private enterprises in virtually all economies. Over 60 per cent of the global informal and formal workforce is employed by SMEs. We also know that SMEs are critical for social stability, equitable growth and poverty alleviation. They are the backbone of the middle class. SMEs serve as the engines for new growth and innovation in economies—small productivity improvements in SMEs have large positive ripple effects on GDP growth, social cohesion and jobs. Yet, participants in the Turkish G20/B20 process have recognized that SMEs’ potential as job creation machines,

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What is particularly encouraging is that in our B20 deliberations, we did not stop with this diagnosis; we took steps to fix the problems. Responding to the recommendation of the B20 Taskforce on SMEs & Entrepreneurship, and with the support of the G20 Finance Ministers, TOBB and the ICC officially founded a new non-governmental multilateral entity, the World SME Forum (WSF). The mission of the World SME Forum is to help improve the overall growth and impact of SMEs globally. The WSF aims to provide SMEs with effective representation, ensuring that they can compete fairly. Partnering with IFIs and development agencies, and with membership from associations working in the SME space and chambers from all over the world, WSF will advance the recognition of the role of SMEs in the global economy, by aiming to be represented in international bodies and among standard setters that either directly or indirectly affect, or aim to affect SME performance and development. All these will be accomplished while helping SMEs to achieve sustainable efficiency and competitiveness to reinforce their contributions to economic growth, employment and development. The deliverables of the WSF will be structured under three pillars tackling each of the major bottlenecks to SME growth mentioned above: Advocacy and Research, Advisory Services, and E-Market Platforms. WSF will take a leadership role in major international events related to SMEs, and

As we know, sMes Account for the lion’s shAre of privAte enterprises in virtuAlly All econoMies. over 60 per cent of the globAl inforMAl And forMAl workforce is eMployed by sMes. we Also know thAt sMes Are criticAl for sociAl stAbility, equitAble growth And poverty AlleviAtion.

deliver state-of-the-art knowledge accessible by SMEs all over the world, utilizing advanced communications, digitization, and broadband to maximize reach. It will focus to advance the positioning of SMEs through supportive policies. It will follow three guiding principles: Not for profit, global and independent; Demand driven, supply enhancing, and pragmatic; By private sector, for private sector. I am privileged to be appointed as WSF’s first CEO. While I have the burden of making sure that the high expectations raised do not go unfulfilled, I am honored to lead this new and incipient endeavor. It is a burden I passionately want to uphold. Concerted efforts and early success are necessary to maintain momentum, especially while we transition to China’s B20/G20 Presidency. The Board of the WSF and I want the organization to bring continuity to the good work done by Turkey’s B20 Taskforces, so that during China’s Presidency we can move from analysis to implementation - A mantra that

Welcome

we have heard loud and clear from many business leaders this year. The WSF has an ambitious agenda. Leveraging the great work done by the Taskforces and our continuous dialogue with SMEs from all over the world, we preliminarily identified four specific focus areas among many that will be launch pads for the WSF’s initial phase of activities. In a nutshell, they are: A. Credit reporting, scoring, and rating programs: As indicated by the 2015 B20 Financing Growth Task Force, financial institutions and individual investors rely on high quality and low cost information on borrower performance to take funding decisions. Lack of access to finance is a well-recognized and major problem for SME development and their sustained growth. This is substantially attributed to the lack of transparent and comparable information on SME performance. The WSF plans to initiate an SME Credit Reporting, Scoring and Rating Program in line with the B20 task force findings and recommendations. This program would improve availability of SME financial information through standardizing business reporting; strengthening collection, storage and dissemination of SME financial performance data; and fostering establishment and operation of credit scoring and ratings agencies. Under this program WSF will work closely with the credit rating bodies, IFIs, Global Standard Setters, Governments, and other relevant authorities on both Global and local basis. B. Certification programs and standards: One of the main challenges faced by SMEs is to participate in Global Value Chains (GVC). Many SMEs already see the importance of global expansion as a source of sustained growth. But GVCs are particularly sensitive to the quality and efficiency of services, and standards are often lower in emerging markets. Therefore, it is very important and timely to initiate a certification program through the WSF and in partnership with Chambers/Associations, and other standards organizations, to provide certified information about SMEs in host countries. These certifications would be aligned with product

line efficiency, management quality, financial standing, and business practices including compliance with contractual obligations and so on. C. Leveraging technology to connect SMEs to their GVCs: Beyond the issue of certification, the challenge of finding local partners and suppliers was cited as the second most burdensome task by major GVC players, often combined with the lack of sufficient local market knowledge to help identify opportunities. While the certification product will offer an avenue for MNCs/anchor investors to count on certified information about SMEs in the host countries, in a second phase we plan to pilot, with the appropriate partnership with players already active in the space, a web-based tool (“e-WSF”) that will make available pertinent and valuable GVC information online. This could take the form of a “one-stop-shop” facility to assist qualified SMEs and global companies enter into partnerships and alliances as part of their GVC(s). The tool might, amongst other functionalities, provide targeted capacity building to SMEs and information on the “demand side”, by providing a bulletin board of opportunities made available in different countries by various MNCs interested in increasing local or external content in their supply chain. D. Measuring the impact of financial regulation and cross-border trade-limitations on SMEs: At the urging of several business leaders during the 2015 B20 process, the WSF is pleased to immediately initiate studies to measure the impact of the latest financial regulations/decisions by global standard setters such as BIS/FSB, etc., and of limiting cross border trade regulations on the development and growth of SMEs. The WSF will also initiate a study on what are SMEs in various national and global context, i.e., a definition of SMEs- to facilitate effective targeting of policies and programs focused on the SMEs. These studies are essential to put a fact-based, firm imprint on the WSF’s advocacy activities globally. Over the next few months, we will do our best to rise up to the challenge that the business and SME community have placed

the boArd of the wsf And i wAnt the orgAnizAtion to bring continuity to the good work done by turkey’s b20 tAskforces, so thAt during chinA’s presidency we cAn Move froM AnAlysis to iMpleMentAtion - A MAntrA thAt we hAve heArd loud And cleAr froM MAny business leAders this yeAr.

on us. By the time we meet in China next year during the 2016 Chinese Presidency of the G20, we want to have our organizational foundation in place, show a growing membership base, offer greater clarity on the certification and credit rating frameworks for SMEs, and share the first transformational ideas on e-WSF, WSF’s e-market platform. Not the least, we also want to be recognized as the Secretariat that regularly raises concerns of the global SME community and suggest policy solutions for the G20 to consider that would, in turn safeguard the continuity of the SME agenda across future presidencies of the B20/G20. The journey has just begun. Join us. This will be a very exciting and challenging time for all of us, but the potential impact we can achieve together can be a game changer. I look forward to working with all of you. For SME advancement, globally. Tunc Uyanik CEO, World SME Forum

Antalya. Turkey 2015 ❙ 21

The Official ICC G20 CEO Advisory Group Publication

LEAD FEATURE / Jobs Authored by: Jon Clifton

Global Job

The Real Number There is a problem with how the world defines what a good job is. ‘Unemployment’ is misleading and grossly underestimates the global jobs problem.

hat the whole world wants is a good job. That was the breakthrough finding from Gallup’s first global survey 10 years ago and it continues to be true. However, there is a problem with how the world defines and measures what a good job is. “Unemployment” – the most quoted jobs metric in the world – is misleading, as it grossly underestimates the global jobs problem. According to the International Labour Organization (ILO), global unemployment is 5.9%. That figure by itself suggests there isn’t a global jobs problem. It tells us that of the more than 3 billion job seekers worldwide, only 200 million of them are “unemployed.” Considering that almost half of the world lives on less than $2 a day, that unemployment figure can’t be right. The problem lies in how unemployment is defined and measured. The ILO recommends a broad framework of labor force statistics to national statistics offices worldwide. Most countries collect these data using a survey. These surveys ask people how many hours they worked the past week and whether it was for an employer or themselves. If they weren’t employed, people are asked whether they are looking for work. The resulting data are the official employment statistics for the country. You might assume that the world’s poorest countries have the highest unemployment rates and the richest countries have the lowest. Not according to the official unemployment figures. Some poorer countries such as India, Cambodia or Belarus boast some of the lowest unemployment rates in the world. Rich countries such as France or the greater eurozone have at least three times the rate of unemployment of those poorer countries. In fact, there is no statistical relationship between GDP per capita and unemployment across all countries. ›

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Jobs

lessness:

YoU mighT assUme ThaT The world’s pooresT coUnTries have The highesT UnemploYmenT raTes and The richesT coUnTries have The lowesT. noT according To The official UnemploYmenT figUres. some poorer coUnTries sUch as india, cambodia or belarUs boasT some of The lowesT UnemploYmenT raTes in The world. Antalya. Turkey 2015 ❙ 23

The Official ICC G20 CEO Advisory Group Publication

LEAD FEATURE / Jobs

› Here is the heart of the problem. Think of subsistence farmers in Africa or people selling trinkets on the street in India. Did they work 30 or more hours in the past week? Absolutely. Although their work is hardly meeting their needs, they still have what global agencies define as work. They are officially “self-employed,” which means they are not “unemployed.” The reason official unemployment figures appear so low in some of these poorer countries is that so many of the truly unemployed are considered self-employed. In the developing world, the self-employed make up roughly 30% of the workforce. This can be confusing because when we hear “self-employed,” things such as “small-business owner” or “entrepreneur” come to mind. However, most of those categorized as “self-employed” in the developing world aren’t small-business

owners or entrepreneurs. When you look at who lives on less than $2 a day, the self-employed appear almost identical to the unemployed. This is because most of these self-employed jobs aren’t really jobs. Let’s consider a real job or a good job – the type of job the whole world wants – as 30+ hours per week of consistent work with a paycheck from an employer. Based on this definition, given the more than 3.2 billion people who want a good job, Gallup finds that 1.3 billion have one. You could also argue that the 400 million people who have part-time jobs, and do not want full-time jobs, also have good jobs. If you include them, then 1.7 billion have a good job. So who are the other 1.5 billion? One billion people are self-employed, 300 million work part time and want full-time work and the rest are unemployed. Obviously,

Living on less than $21 a day 39.6%

39.8%

Employed full time for self

Employed part time. Wanting full time

35.0% 30.6% 27.0%

12.2%

Employed full time for an employer

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Out of workforce

Employed part time.Do not want full time

Unemployed

not all of the self-employed are hopelessly unemployed. But we can conservatively estimate that at least half of them are. Those 500 million added to the part-time workers who want full-time work and the unemployed total roughly 1 billion people who are truly unemployed. That figure of 1 billion, which is just shy of one-third of the entire world’s workforce, would put global unemployment closer to 32% than to 5.9%. There is another problem with current jobs metrics: there is no figure that measures the quality of people’s jobs. I had a conversation with an economist from the World Bank about measuring the quality of jobs. She told me they were hoping to accomplish this using two metrics: pay and benefits. The problem is these fail to measure whether people love or hate their job. This is important because when people have a full-time job, it is where they spend most of their lives. When people are in a job they hate, they are more likely to rate their lives worse than do people who have no work at all. One way to help quantify those intangibles is through a metric known as engagement. This is calculated based on 12 items Gallup discovered to categorize workers into engaged, not engaged and – worst of all – actively disengaged. People who are engaged at work use their strengths, know what’s expected of them and believe their jobs matter. Gallup asked our engagement questions of more than 99% of the world’s population, and found that among those with good jobs, only 14% of them are engaged. They have great jobs. Global engagement figures vary greatly, running as high as 28% in the U.S. and as low as 6% in China. Out of 5 billion adults on this planet, 3.2 billion have work or are looking for work. Of these 3.2 billion people, 1.7 billion have a good job. Of these 1.7 billion jobholders, roughly 14% of them are engaged and have a great job. Out of a global workforce of more than 3 billion, then, only 238 million people have a great job. This means a staggering 2.9 billion people who want a great job don’t have one. The dream of men and women around the world is to have a good job and, ultimately, a great job. Yet only 238 million people are realizing this dream. Global leaders need to make ‘great’ job creation a top priority. Getting better metrics for the real jobs situation would be a start. ■

BUSINESS MATTERS.

Chairman: Marcus Wallenberg Chairman, SEB (Sweden)

www.iccwbo.org/G20 Australia New Zealand Bank BHP Billiton Wesfarmers Limited Corrs Chambers Westgarth Bridas Corporation Corporacion America Fung Group Nestle Novozymes SEB Repsol Telefonica

Zurich Insurance Group Danfoss Group Engie Schneider Electric Rothschild Europe Bayer Great Eastern Energy Hanwha Daesung CinĂŠpolis Russian Union of Industrialists and Entrepreneurs Gulf One Investment Bank

National Petrochemical Industrial Company Eskom Holdings Eskihisar Group/ Union of Chambers and Commodity Exchanges of Turkey Diageo Rio Tinto Royal Dutch Shell The Dow Chemical Company McGraw Hill Financial Energy Transportation Group Doha Insurance/Qatar Chamber of Commerce and Industry

Comprising CEOs from major global corporations, the ICC G20 CEO Advisory Group effectively targets G20 policy development on a worldwide scale. The group is an enduring, legitimate voice of international business, gaining recognition by G20 governments as the primary source of business expertise on the global policy agenda. To learn more about how your company can participate in the ICC G20 CEO Advisory Group, please contact Jeffrey Hardy at Jeffrey.hardy@iccwbo.us

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Sponsored / Antalya

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Karain Cave: The remains in Karain Cave situated 27 km northwest of Antalya within the borders of Yagcılar belong to Palaeolithic, Mesolithic, Neolithic and Bronze ages. This cave is one of the places that should be seen. Ariassos: It is 1 km inside from the turnout on 48th km of Antalya – Burdur highway. Situated on mountain slope, Ariassos is worth seeing with its hamams and rock tombs. At the beginning of Ariassos valley, the most glorious remain the entrance gate rises. This monument which belongs to Roman period, 28 ❙ b20turkey.org

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Perge: Perge is 18 km north of Antalya, near Aksu district. It is an important Pamphylian city since it is situated on the Cilicia – Pisidia trade route. The foundation of the city coincides with other Pamphylian cities (VII. Century BC). Perge was important for Christians. Saint Paulos and Barnabas came to Perge. The riches such as Magna Plancia provided significant monuments here. In Perge which the first excavations started in 1946 by Istanbul University, the ruins such as theatre, stadium, main road with columns and agora were found.

Life Style: There are heritages of two lifestyles prevailing in Antalya and the region. When the Turkish people first came here, they immediately oriented the settled lifestyle and built villages, towns and cities. Another part of the population continued the unsettle life as they did before they came to Anatolia. According to a lifestyle called semi settled 15 – 20 and sometimes hundreds families in relation live in hair tents and migrate to mountains in summer and then warm lowlands in winter called “Kıslak”. They raise sheep, camel, and sell or exchange the products they made from these animals with ones of settled people. They produce meat, milk, oil and weave hair tents and carpets with the madder. There are also people who bread crops, vegetables even in the confined areas. There were even big unsettled groups (asiret, oymak) that rose horses to Ottoman Army. Turkish carpets glamorizing the most important museums in Europe are the handicrafts of these people. The big part of our current folk music culture is a heritage from these nomads. The most significant poets of Turkish Folk Poetry and music Karacaoglan, Dadaloglu are the representatives of this culture. Since the old times the people who lead a settled life generally call themselves peasant, native, while when you go to a village with high population of Yoruks (Turkish nomads), they say “here is Yoruk village”. You can witness these kind of ‘

‘

Lara – Konyaaltı Beaches: The natural beauty Lara beach which is approximately 10 km north of Antalya city centre and Konyaaltı beach which is on the west coast of city centre are the best coasts of the city.

called “Üç Kapı” (Three Doors) by local people since it has 3 arches, thus 3 entries. The most astonishing feature of the city is that three out of four of the whole city is the remains of necropolis with magnificent tombs.

Local Foods: The husbandry and the products provided from wheat determine the base of nutrition style of Yoruks. Although raw vegetables are produced leastwise in coastal line wheat and dry vegetables gain importance in the inner regions. It is possible to find all of the world cuisine in touristic hotels and restaurants. However local meals special to the region are saç kavurması (dried lamb fried on iron plate), Tandır kebabı (Tandoor kebab), Kölle (stewed wheat, bean, pea and horsebean), Domates Cilvesi (meal with tomato), Hibes (spread of tahin, cumin, red pepper flakes and lemon juice), Arapası. ‘

Kursunlu Waterfall: It is on 7th km after the turning point to Isparta road which is on the 24th km of Alanya road on the east of city centre. This wonder of nature is one of the most frequently visited places as well. The waterfall is place like a dreamland. It is inside of the deep green valley. The whole place of the waterfall can be seen approximately in half an hour. There are plenty of fishes in the water which forms small lakes in some places. It also attracts attentions with its rich fauna. Düden, Kursunlu and Manavgat waterfalls were used while shooting many Turkish movies. All can be reached easily by bus.

remarks all around Turkey. However even if people emphasize these differences that go long way back, they all have the same root and they all are Turkish. They do not see different each other and accept this as a richness. Today, Turkey is one of countries that conformed in modern contemporary world and uses technology in a best way. However nowadays there are only small unsettled groups that lead a life which is thousand year old and has both nostalgic and cultural value. The number does not exceed couple hundred. Sadly only camels have left from this lifestyle. If you happen to come to Belek, Manavgat and Alanya in summertime, you will see camels carrying tourists with bells and rattles on them. These are remembrances from those days. Moreover you can see Yoruk tents for local and foreign tourists in Kemer and on Antalya Kumluca road. You can eat pancake with buttermilk in these tents which look like a half museum. The native people of Antalya immigrate to Plateaus such as Gömbe, Sütlegen, Alanya even today whenever they get a chance. This tradition is a memory from their ancestors. And also you can witness the snow which was preserved in holes in Taurus Mountains in some counties and brought to the centre of county then reduced to juice are sold by peddlers. This is again another old tradition of Yoruks.

‘

Düden Waterfalls: The waterfall which is one of the natural beauties that symbolizes the city is located approximately 10 km northeast of Antalya city centre. It falls down from a height of 20 metres. The main source of the stream is in Kırkgöz area. However lower part of Düden Waterfall is on the road to Lara Beach. It is on the southeast of city centre and floods from 40 metre high cliffs. It is one of the natural beauties that symbolize Antalya.

Climate: In Antalya prevailing Mediterranean climate, winters are temperate and rainy, summers hot and dry. Transportation: provided by highways, airline and maritime line. Antalya airport is open to international air traffic. ■

ANTALYA SUMMIT

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eat.Porest que re parum laut remporesti cum ea quate restibusdae quis aliquodi ide ex este endit ut repeles ilist, saerum autectus que non cuptaturio erferch illaborum si beaquate pe nosam, ius am et prae et quatatqui que ima voluptatium. endae ero cus et aspiend aeptas quis eosam es ullest alias aped mo ipsum quaepel mos adi dolo ommoluptas sim si nonse vendelit asitataque nissimin consequam nullaccab in nonsequid mol Changing for the better Dunt anit et quaest exerrum veliquam, volor magnihi taturio. Itatis iamus sit a quas quam intiae od quia qui odignis adionsequi occus mo odi volecto ritistis endit eresciiscit, nis quis eaque poremosa ventiatem as re, sectius aut eos rehenihitat pa dolupta testio et unt molore inciis et eic tem nam quisimolor ati imossit asimagnias dolorpos aut hiliqui atecusam dolum exceaque endae ero cus et aspiend aeptas quis eosam es ullest alias aped mo ipsum quaepel mos adi dolo ommoluptas sim si nonse vendelit asitataque nissimin consequam nullaccab in nonsequid molorest, exerciae dunt anit et quaest exerrum veliquam, volor magnihi taturio. Itatis min reicimillab imi, simus maximet ad eat.Porest que re parum laut remporesti cum ea quate restibusdae quis aliquodi ide ex este endit ut repeles ilist, saerum autectus que non cuptaturio erferch illaborum si beaquate pe nosam, ius am et prae et quatatqui que ima voluptatium. endae ero cus et aspiend aeptas quis eosam es ullest alias aped mo ipsum quaepel mos adi dolo ommoluptas sim si nonse vendelit asitataque nissimin consequam nullaccab in nonsequid mol dunt anit et quaest exerrum veliquam, volor magnihi taturio. Itatis What will happen next ue orest, exerciae dunt anit et quaest exerrum veliquam, volor magnihi taturio. Itatis min reicimillab imi, simus maximet ad eat.iamus sit a quas quam intiae od quia qui odignis adionsequi occus mo odi volecto ritistis endit eresciiscit, nis quis eaque poremosa ventiatem as re, sectius aut eos rehenihitat pa dolupta testio et unt molore inciis et eic tem nam

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Bis etur, verion pe prerchicat. Mus posant ut volorp siM ea niM quo MagniM res Moluptis ilicidunt consequaM nus eic teM. Vladivostok. Russia 2012 ❙ 00

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Welcome

Howard G. Beasey President and CEO, American-Turkish Council

For decades, the American-Turkish Council (ATC) has been a chief proponent of the U.S.-Turkey commercial relationship. Working on behalf of both U.S. and Turkish companies, the ATC engages the public and private sector through programs and campaigns to advance the bilateral relationship. It is our belief that by broadening and strengthening economic linkages between the U.S. and Turkey, we are doing more than just catering to business. The strong commercial bonds we facilitate indeed encourage stronger diplomatic ties, engender stability, and promote peace. As the past six years has demonstrated, the U.S.-Turkey commercial relationship possesses enormous potential. From 2009 to 2014. U.S.-Turkey trade jumped from approximately USD 10 billion to USD 19.1 billion. The latest numbers, however, represent only a fraction of what the U.S.-Turkey trade relationship can produce. A mere 3.9 percent of Turkish exports are destined for the U.S. market and only 5 percent of its imports originate from the U.S. The potential to deepen economic

relations is promising, and to that end, the ATC is closely monitoring and promoting initiatives that will catalyze growth of the commercial relationship. With the goal of becoming a top-10 economy by 2023, Turkey is focused on harnessing its young, entrepreneurial population, increasing Turkish exports to USD 500 billion, and reaching a total trade volume of USD 1 trillion. This focus on trade presents both U.S. and Turkey-based companies with enormous opportunity to invest, partner, and collaborate. The Transatlantic Trade and Investment Partnership (TTIP) represents but one initiative providing a channel through which to highlight ways to improve the U.S.-Turkey trade relationship. While the TTIP will bolster U.S.-EU trade ties, with estimated gains amounting to USD 134 billion a year for the EU and USD 107 billion a year for the U.S., Turkey’s absence from the agreement could be a devastating economic and political blow. Though U.S.-Turkey trade relations have traditionally leaned heavily on the defense industry, the TTIP will foster a broader, more dynamic economic relationship. The U.S. offers a fertile ground for affordable Turkish textiles and appliances, as well as exports of Turkey’s growing services sector such as tourism, healthcare, and education. Turkey’s domestic industries will benefit from greater synergies with U.S. private-sector expertise. U.S. companies will, in turn, gain from fuller engagement with the world’s 17th largest economy. Turkey’s young, savvy, and increasingly consumerdriven population provides enticing growth opportunities for U.S. corporations looking to gain a foothold in a market rife with economic potential. The ATC’s 34th Annual Conference on U.S.-Turkey Relations, held in late

With the goal of becoming a top-10 economy by 2023, turkey is focused on harnessing its young, entrepreneurial population, increasing turkish exports to usd 500 billion, and reaching a total trade volume of usd 1 trillion. 30 ❙ b20turkey.org

September, 2015 at the Ritz-Carlton in Washington, DC, demonstrated Turkey’s economic promise. Over 400 private and public sector leaders attended the three-day conference, which featured 17 panels in industries as diverse and dynamic as Agribusiness, Renewable Energy, ICT, Education, Infrastructure, Healthcare, Cybersecurity, Hospitality, and Trade. The conference generated excitement regarding prospects for Turkey’s fastest growing companies to liaise with U.S. companies as they enter into the global value chain, or partner with U.S. companies in a variety of third-party markets. By all accounts, the Annual Conference was a success, and set a strong tone for U.S.-Turkey relations moving into 2016. By offering spaces for businesses to not only learn about investment opportunities in the U.S. and Turkey, but to develop long-lasting professional connections, the ATC is at the forefront of promoting the bilateral economic relationship. However the programs, networking opportunities, business services, and advocacy we provide for and on behalf of our members contribute to a higher achievement: the strength of this deeply valuable alliance, predicated not only on commercial interests, but also shared principles and values. As U.S. Ambassador to Turkey John Bass noted at the 34th Annual Conference on U.S.-Turkey Relations, it is the ATC’s place to “continue to build a stronger relationship… reflecting the deep and enduring values and commitments we’ve had to this relationship over many years.” I am proud to say that the ATC is, every day, working to fulfill this mandate. Howard G. Beasey President and CEO, American-Turkish Council

American-Turkish Council

Report on the ATC’s 34th Annual Conference on U.S.-Turkey Relations, Commercial Diplomacy: Strengthening the Alliance. the american-turkish council (atc) held its flagship event, the annual conference, from september 27th through the 30th at the ritz-carlton hotel in Washington, dc.

he American-Turkish Council (ATC), a leading business organization devoted to the promotion of the U.S.-Turkey relationship, held its 34th Annual Conference on U.S.-Turkey Relations from September 27th through the 30th at the Ritz-Carlton Hotel in Washington, DC. Held every year in Washington, DC, the Annual Conference incorporates the whole spectrum of U.S.-Turkey relations, and provides attendees a platform for dialogue

between the public and private sectors of both countries. This year’s Annual Conference drew over 400 attendees, and hosted a nearly even split of U.S. and Turkey-based companies. The participation of high-level political and military leaders from both sides of the alliance reflected the vitality of the alliance, and spawned great optimism regarding the U.S.-Turkey relationship moving into 2016. The conference fulfilled its mission as

envisioned by this year’s theme “Commercial Diplomacy: Strengthening the Alliance,” by featuring diverse and dynamic variety of industry-specific panels. The Conference represented over 10 industries – including Defense & Security Affairs, Education, Renewable Energy, ICT, Healthcare, Infrastructure, and Hospitality – on 17 expert panels. In response to the emerging dialogue about the need for closer U.S.-Turkey trade ties, the Conference also featured two panels which explored Turkey’s perspective on the Transatlantic Trade and Investment Partnership (TTIP) Agreement between the U.S. and the EU, and ways to integrate Turkey’s fastest growing companies into the global value chain. In addition to the industry panels, the Annual Conference included two plenary sessions, three receptions, two breakfasts, two luncheons, and two dinners featuring high-level keynote speakers from both sides of the bilateral relationship. Mirroring the diverse and dynamic nature of the U.S.-Turkey commercial relationship, the ATC ensured that the Annual Conference allowed attendees to build deep and lasting personal and professional connections across multiple industries. The three-day conference began with a beautiful welcoming reception at the Turkish Embassy in Washington, DC, and featured warm remarks from ATC Chairman, General James Jones; Deputy Chief of Mission Turkish Embassy to the U.S., Tugay Tuncer; President of the Union of Chambers and Commodity Exchanges of Turkey (TOBB), Rifat Hisarciklioglu; and U.S. Deputy Secretary of Energy, Dr. Elizabeth SherwoodRandall. Speakers detailed the importance of the U.S.-Turkey relationship, setting a strong precedent for the Annual Conference moving forward. › Antalya. Turkey 2015 ❙ 31

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Conference / American-Turkish Council

› Monday, September 27 The Opening Ceremony, sponsored by Raytheon, featured welcoming remarks from ATC President, Howard Beasey; ATC Chairman, General James Jones; TOBB President, Rifat Hisarciklioglu; General Fraser (Ret.) on behalf of Sierra Nevada Corporation; and Ersan Arcan of ATU Duty Free. The speakers delivered poignant assessments of the U.S.-Turkey relationship, while emphasizing the need for expanded bilateral trade ties. The event’s keynote speaker, President of Integrated Defense Systems at Raytheon, Wesley D. Kremer, praised the theme of the conference and described how Raytheon’s linkages with business partners in Turkey have supported closer U.S.-Turkey cooperation. He further noted the enormous potential of the bilateral alliance, and shed light on the mutually beneficial consequences of an ever-closer relationship. The “Political Landscape” plenary session followed the Opening Ceremony. Moderated by Cenk Sidar of Sidar Global Advisors, the panel featured renowned experts on Turkish politics including Deniz Zeyrek of Hürriyet Daily News, Kemal Kirisci of Brookings, Kadir Ustun of the SETA Foundation, Omer Taspinar of the National War College, and Joshua Walker of the German Marshall Fund. The conversation addressed a wide assortment of topics, including Turkey’s upcoming elections, the ongoing conflict with the PKK, economic concerns, and U.S.-Turkey military cooperation in the campaign against ISIS. Monday’s panels took place immediately following the plenary session, and featured experts in Defense & Security Affairs, Energy, Education, Trade, Infrastructure, Banking & Finance, and Agribusiness. Panelists for these sessions included, among others, Lieutenant General Salih Ulusoy, Chief, Plans and Principles, Turkish General Staff; Senior Defense Official and Defense Attache, Brigadier General Marc Sasseville; Founding Director of the Global Energy Council at the Atlantic Council, Ambassador (Ret.) Richard Morningstar; and Deputy Assistant Secretary of State for Energy Diplomacy, Robin Dunnigan. Represented companies and organizations included TUSIAD, the Economic Development Fund, the EU Delegation to the U.S., Squire Patton Boggs, Gulsan Construction, Herguner Bilgen Ozeke, Parsons, OPIC, Raytheon, Turkey’s Ministry of National Defence, the World SME Forum, The Word Bank, WorldBusiness Capital, İŞ Private Equity 32 ❙ b20turkey.org

Investment Trust, TEPAV, and the USDA. In between the morning and afternoon panel sessions, the Monday Luncheon was headlined by two esteemed keynote speakers: Chairman of the Senate Committee on Armed Forces, Senator John McCain; and Director of the U.S. Trade and Development Agency, Leocadia Zak. Senator McCain powerfully elucidated the common bonds and shared challenges between the U.S. and Turkey, providing deep praise and poignant criticism of both governments, and articulating a vision for deeper commitment to mutual problems. “As a member of NATO,” he said, “Turkey is committed not only to the collective self-defense of and security of all NATO allies, but safeguarding our common values as well.” Leocadia Zak then took stage, noting that the U.S.-Turkey alliance is on solid footing, and is “especially strong when it is… rooted in areas of mutual benefit like economic cooperation.” The first day’s events later culminated with a reception and dinner sponsored by TOBB. TOBB President, Rifat Hisarciklioglu, provided introductory remarks, and welcomed to the stage U.S. Ambassador to Turkey, John Bass, to deliver the keynote address. Ambassador Bass urged the audience to continue to build a stronger relationship predicated on enduring values and commitments. “[The] ATC and its members play an exceptionally important role in making that case,” he asserted. The evening came to a close with the presentation of a Commercial Leadership Award to Pratt & Whitney for their recent successful investments in Turkey. Tuesday, September 27 Tuesday’s activities began with the Golden Horn Breakfast which included a keynote address by President and CEO of the U.S. Chamber of Commerce, Thomas J. Donohue. Mr. Donohue highlighted the importance of several emerging sectors in Turkey while arguing in favor of expanded U.S.-Turkey trade ties through TTIP or a bilateral agreement. A Special Award was then presented to Richard K. Douglas, Vice President of International Programs at GE, for his longtime support of the ATC. Following the breakfast, a plenary “B20/ T20” session convened to discuss Turkey’s priorities as President of this year’s G20. Moderator Ussal Sahbaz, B20 Turkey Content Lead at TEPAV, led an enlightening discussion featuring Member of the B20 Steering Committee, Janamitra Devan; ICC G20 Advisory Group

Coordinator, Jeff Hardy; Vice President of International Strategic initiatives at the U.S. Chamber of Commerce, Gary Litman; and Deputy to Coordinating Chair of the B20 Anti-Corruption Taskforce, Lee Tashjian. Tuesday’s panels focused on Defense & Security Affairs, Trade, Agribusiness, Renewable Energy, Healthcare, ICT, and Hospitality, and included representatives from Pratt & Whitney, the U.S. Department of Defense, AIA, SASAD, AYESAS & Vestel Defense, TEPAV, Samsun Yurt Savunma, Ankaref, Utas, McLarty Associates, NÜD, Savronik, Bluewater International, Milsoft, Hittite Green Solutions, Turkey’s Energy Market Regulatory Authority, Siemens Turkey, GDF Suez, GE Turkey, Eko Renewable Energy, URAC, America’s Health Insurance Plans, Cleveland Clinic, HKS, the Turkish Health Ministry, Lockheed Martin, Alpata Group, BAE Systems, the U.S. Trade and Development Agency, Anderson Economic Group, the Information Technology and Innovation Fund, UNIFREE Duty Free, Hilton Worldwide, TUROB, BDO Hospitality Consulting, and Servotel Corporation. The Tuesday Luncheon, sponsored by

a distinguished defense aWard Was presented to general breedlove, and a special defense aWard Was presented to senior defense official and defense attache, brigadier general marc sasseville. Sierra Nevada Corporation, featured keynote speeches from General Philip M. Breedlove, Commander of the U.S. European Command and NATO Allied Commander Europe, and Fatih Ozmen, CEO of Sierra Nevada Corporation. General Breedlove discussed from a military perspective how the alliance is rooted in trust, and continues to contribute to worldwide peace and stability. Mr. Ozmen’s speech expressed sincere gratitude for the alliance, particularly for its role in Sierra Nevada Corporation’s enormous success. A Distinguished Defense Award was presented to General Breedlove, and a Special Defense Award was presented to Senior Defense Official and Defense Attache, Brigadier General Marc Sasseville. Prior to the Conference Closing Reception and Dinner, the ATC together with American Friends of Turkey hosted a Cultural Reception

featuring a Turkish carpet display by Woven Legends, and a Turkish wine tasting with Camlibag Wines provided by Stefano Selections. Neslihan Jevremovic of Woven Legends received a Special Citation for the important work she has done with Syrian refugees in Turkey through her company. The Conference Closing Reception and Dinner featured an inspiring introductory presentation by Platinum Sponsor ATU Duty Free. Introductory remarks by Cuneyt Cilingiroglu preceded a powerful keynote speech by General Paul Selva, Vice Chairman of the Joint Chiefs of Staff. Before starting his speech, General Selva graciously acknowledged the work of the ATC, and notable attendees representing both sides of the bilateral relationship, including Undersecretary of the Defense Industry (SSM), Dr. Ismail Demir, and Lieutenant

General Salih Ulusoy, J-5 on the Turkish General Staff. General Selva laid claim to the strength and vitality of the U.S.-Turkey alliance. He further noted that the bilateral relationship “extends well beyond our economic cooperation,” into defense, political, cultural, and social spheres. His speech, by highlighting the true breadth and depth of the U.S.-Turkey relationship, was an appropriate conclusion to an Annual Conference that reaffirmed the unshakable bond between these two great countries. The following morning featured a Closing Breakfast, sponsored by Citi, featuring The Honorable Bruce H. Andrews, Deputy Secretary of Commerce, who addressed his own personal connection with Turkey, as well as the enormous economic potential of the U.S.-Turkey relationship. A second Commercial Leadership Award was then presented to ATU Duty Free in recognition of their recent investment in the U.S. The 34th Annual Conference ended with an eye towards the future of U.S.-Turkish relations, and by all accounts, generated a tremendous amount of optimism. ■ Antalya. Turkey 2015 ❙ 33

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International Policy / NATO Authored by: Madeline Bielski

An Extraordinary Meeting: NATO Gathers at Turkey’s Call Turkish Foreign Minister Mevlüt Çavuşoğlu stated that he expected support from the nation’s NATO allies, and support is what he received.

34 ❙ b20turkey.org

NATO

he 28 member states of the North Atlantic Treaty Organization met July 28th in closed session for a rare meeting after Article 4 of the Washington Treaty was invoked for just the fifth time in the organization’s history. Article 4 states, “The Parties will consult together whenever, in the opinion of any of them, the territorial integrity, political independence or security of any of the Parties is threatened.” Turkey called for just this sort of consultation on July 26th in response to a series of attacks along the Turkish-Syrian border, causing them to fear for the safety of their borders in the midst of the crisis in Syria. Turkey called the meeting to discuss the threat ISIS poses to the nation, as well as the state’s planned response to security threats. In the week prior to the meeting, a suicide bombing occurred on the Turkish-Syrian border killing 32 and a separate IS attack killed a Turkish soldier. However, IS is not the only concern of Turkey’s, they also are wary of the Syrian Kurds. It has been made clear that Turkey fears the Kurds uprising and fighting for an independent state, something that has happened in the past. The Kurdistan Workers’ PArty (PKK) has been fighting for Kurdish independence since 1984 and many have died in that conflict. As a result of past tensions with the Kurds, Turkish forces have also been launching attacks against the Kurdish forces in Syria, who are the most effective force currently fighting ISIS. Kurds reported that the Turks have shelled Syrian villages with the aim being Kurdish soldiers. Turkey has responded by saying that the Kurds are just as great of a threat to their nation as are “Daesh”, the Arabic abbreviation for ISIS. Part of the NATO meeting was expected to cover what measures Turkey is taking in the case of the Kurds. Going into the meeting, Turkish Foreign Minister Mevlut Cavusoglu stated that he expected support from the nation’s NATO allies, and support is what they received. In the press conference following the July 28 emergency meeting, NATO SecretaryGeneral Jens Stoltenberg stated that all of the NATO members stand in solidarity with Turkey and condemns the acts of terror

perpetrated against Turkey. Stoltenberg said that Turkey did not request additional military support or a NATO presence during the emergency meeting. When asked by a reporter about the potential for a safe zone on the Turkish-Syrian border, currently in discussions between US and Turkish officials, the NATO SecretaryGeneral said NATO is not a part of these efforts. Rather the creation of a safe zone is a bilateral discussion to be had between the US and Turkey. The idea behind the safe zone is to clear the area of rebel forces and allow Syrian refugees somewhere secure to go to. Turkey is the top refugee-hosting nation in the world, with 1.59 million refugees entering the country in 2014, largely due to the crisis in Syria. A potential safe zone is a step amongst others to further the US-Turkish relations when it comes to fighting ISIS. Turkey has long been wary of becoming engaged in the conflict with ISIS, but recently has made moves to become more involved. Turkey has now opened its bases to the US-coalition, including the strategic Incirlik Air Base located near Adana in the south of the country. Turkish warplanes have also been targeting militants in Syria. Stoltenberg made it clear that terrorism is a major concern of NATO’s and not tolerated in any form. He also added that NATO would continue to monitor the situation unfolding in Syria and the rest of the Middle East. “The security of the Alliance is indivisible, and we stand in strong solidarity with Turkey. We will continue to follow the developments on the South-Eastern border of NATO very closely,” Stoltenberg said. This was not the first time Turkey invoked Article 4, in fact of the 5 times an emergency NATO meeting has occurred, Turkey has called for four. In 2003, Turkey used Article 4 to call for a meeting due to the Iraq war. Turkey then invoked Article 4 twice in 2012. One meeting was held to discuss Syria shooting down a Turkish F-4 reconnaissance jet and another meeting took place to discuss more threatening actions by Syria. Poland also called for a rare emergency NATO meeting in 2014, as result of concerns rising because of Russia’s intervention in Ukraine.

IT HAS BEEN MADE CLEAR THAT TURKEY FEARS THE KURDS UPRISING AND FIGHTING FOR AN INDEPENDENT STATE, SOMETHING THAT HAS HAPPENED IN THE PAST.

Notably, Article 4 is the tamer relative of Article 5, which states that if a NATO member falls victim to an armed attack, it shall be considered an attack against all NATO members and it is up to the members to deem how best to aid the country under siege. Article 5 has only been invoked once, following the 9/11 attacks. While many details are not available from the most recent emergency meeting of the NATO allies, it is clear that the situation in Syria is being monitored and Turkey is not afraid to call on its allies when needed. ■

Antalya. Turkey 2015 ❙ 35

The Official ICC G20 CEO Advisory Group Publication

International Policy / Turkey’s G20 Priorities Authored by: Eli Lovely

Turkey’s Inward-looking G20 Priorities Between 2003 and 2014, Turkey’s economy grew an average of 4.7 percent each year, though a swift decline in the lira, an unemployment rate hovering around 10 percent, and an account deficit just shy of USD 4 billion is reason for concern in a country reliant on foreign direct investment.

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Turkey’s G20 Priorities

mid a wave of bad press concerning Turkey’s economic challenges, several of its G20 priorities are self-reflective prescriptions aimed at avoiding the so-called “middle-income trap.” Turkey is at the helm of the G20 at a time when its economy is suffering, but its emphasis this year on empowering small and medium-sized enterprises (SMEs) – a priority that simultaneously addresses youth unemployment – is part of an effective strategy for stimulating future economic growth. While the year-to-year G20 meetings feature a mix of senior government officials and industry leaders discussing the greatest burdens impacting the global economy, SMEs are traditionally left voiceless. In Turkey, SMEs are responsible for 90 percent of employment and 54 percent of all investment, yet they receive merely 25 percent of all bank loans. Turkey has wisely taken concrete steps as President of this year’s G20 to spotlight SMEs as part of their global and internal economic agenda. Between 2003 and 2014, Turkey’s economy grew an average of 4.7 percent each year, though a swift decline in the lira, an unemployment rate hovering around 10 percent, and an account deficit just shy of USD 4 billion is reason for concern in a country reliant on foreign direct investment. In July, the World Bank forecast the country’s growth at 3 percent for 2015 and 3.5 percent for 2016 and 2017 given the economic and political obstacles confronting Turkey. It is clear why Turkey has now, amid a backdrop of constrained capital and economic misfortune, sought to invigorate a discussion on the economic importance of SMEs as drivers of economic growth. The effects of a constrained financial environment, hindering SMEs as they try to remain competitive in the global marketplace, could have an acute impact on the country’s economic well being. Fortunately, Turkey has a valuable resource in its young, educated population. Martin Raiser, the World Bank’s former country director for Turkey, listed Turkey’s entrepreneurial population as its biggest asset. Harnessing its potential would require acting on Turkey’s G20 priorities by leveraging the voice of SMEs and ensuring they can access the capital required to create jobs and entrepreneurial opportunities for a talented population. To Turkish leadership, the connection between SME access to capital, utilization of

SMES IN TURKEY, AS WITH MANY DEVELOPING COUNTRIES, ARE ESSENTIAL BACKBONES OF THE ECONOMY, YET THEY HAVE FOUND IT INCREASINGLY DIFFICULT TO ACCESS THE CAPITAL REQUIRED TO EVOLVE, GROW, AND OFFER OPPORTUNITY TO TURKEY’S PARTICULARLY EDUCATED, SAVVY, AND EAGER YOUTH POPULATION.

their young population, and the success of the overall economy seems abundantly clear. In late May of this year, Deputy Prime Minister Ali Babacan unveiled the Istanbulbased World SME Forum as a platform to improve the position of SMEs on the global stage, noting that in 2014, Turkey’s SMEs accounted for 60 percent of the country’s total export revenue, valued at USD 157 billion. While Turkey’s banking system maintains a positive reputation, it remains difficult to access credit from them. The formation of the World SME Forum, however, aims to leverage the voices of SMEs, allowing them to put pressure on government to implement policies designed with the needs of SMEs in mind. Accessing capital will also require identifying alternatives to large financial institutions. The cooperation of private equity firms with large development-focused organizations like the European Investment Bank or the U.S. government’s Overseas Private Investment Corporation (OPIC) provide solid alternatives and will likely find support among the SME community. Noteworthy examples of these partnerships include loan guarantee mechanisms such as InnovFin, recently launched by the European Commission and the European Investment Bank (EIB) Group under the framework of Horizon 2020, which aims to improve Europe’s research and development capacities. InnovFin, according to the European Investment Bank website, “Consists of a series of integrated and complementary financing tools and advisory services offered by the EIB Group, covering the entire value chain of research and innovation (R&I) in order to support investments from the smallest to the largest enterprise.” Loan guarantee mechanisms allow SMEs to double their initial credit capacity, therefore enhancing their ability to invest in profitable projects and services.

Loan guarantees will also provide SMEs greater capacity to hire and provide opportunities to Turkey’s greatest untapped asset: its youth population. With youth (age 15-24) unemployment at 20 percent according to TurkStat figures from April 2015, Turkey needs to provide ways to generate such opportunities for young people. Turkey’s youth could become either a boon or a vexing source of economic and political instability. SMEs in Turkey, as with many developing countries, are essential backbones of the economy, yet they have found it increasingly difficult to access the capital required to evolve, grow, and offer opportunity to Turkey’s particularly educated, savvy, and eager youth population. The health of Turkey’s economy requires that such opportunities are made available to them. Amid the laundry list of economic afflictions confronting Turkey, the country has wisely sought to emphasize inclusiveness as a priority of their G20 presidency by providing the often overlooked SME community a forum to leverage their voices. By promoting them as a vital component of the economy and facilitating access to capital, Turkey could harness their prized youth population, providing employment and entrepreneurial opportunities crucial to the development of Turkey’s economy on a broad scale. ■

Eli Lovely is Director of Communications and Marketing at the American-Turkish Council. Previously, he was an Associate at Kroll. Lovely is a recipient of a Fulbright Fellowship and the Critical Language Scholarship, both of which brought him to Turkey. He is a graduate of Georgetown University and Wheaton College in Massachusetts.

Antalya. Turkey 2015 ❙ 37

The Official ICC G20 CEO Advisory Group Publication

Economy & Finance / Women In Business Presenter: Sylvia Hewlett

Gender Balance: The Power of Difference What’s the largest emerging market in the world? Many would respond with China. However, Sylvia Ann Hewlett, CEO of the Center for Talent Innovation, has a relatively unconventional answer to this question.

THIS IDEA THAT WOMEN WANT TO FIND MEANING AND PURPOSE IN THEIR WORK WAS A CONSISTENT THEME IN HEWLETT’S PRESENTATION. THE INDUSTRY IS OUT OF TOUCH WITH WOMEN’S NEEDS AND THAT IS A COSTLY OVERSIGHT.

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Women In Business

hat’s the largest emerging market in the world? Many would respond with China. However, Sylvia Ann Hewlett, CEO of the Center for Talent Innovation, has a relatively unconventional answer to this question. At the inaugural Quality of Life conference hosted by Sodexo, Hewlett gave a presentation where she argued that women are in fact the largest emerging market. She explored how to get women involved in business by analyzing the factors that motivate and inspire them. Hewlett began her talk with an anecdote about Rajasjree Nambiar, the first woman to serve as head of branch banking in India. Nambiar, displeased with the condescending attitudes of her male banker colleagues, chose to open two bank branches in India primarily run by women. Nambiar worked to add quality of life to her branches, with services like babysitting and a coffee bar. Nambiar also understood that women want to connect their work with their life’s meaning. This understanding proved successful for Nambiar as thesebecame the two most profitable branches in Asia. This idea that women want to find meaning and purpose in their work was a consistent theme in Hewlett’s presentation. The industry is out of touch with women’s needs and that is a costly oversight. Consider a study that looks at seven growth markets, which found that 66 percent of investible assets in these countries were in the hands of women. Yet, many of these women did not retain a financial advisor, because of the perception that the financial services world lacked a focus on meaning and purpose. As a result, $4 billion are not being invested. Hewlett also analyzed a study entitled “Women Want Five Things”, which looked at 35-50 year old women and what really inspired them to become truly engaged in their careers. Women were similar to men in two motivating factors: the desire to excel and the desire to earn well. However, three other factors set women apart. The study found that women want to flourish in their work. For Hewlett the word flourish, had impactful meaning. “[Flourish] means wellbeing, it means self-actualization in all three arenas of your life, your community, your personal life and work, and they’re very intermingled these

days. This flourishing thing [is] huge. It’s a much bigger concept than work life balance. It’s very forward thrusting. It’s very exhilarating. It involves control in agency, all those great things. It’s huge for women,” Hewlett said. The study also found that women want to empower others. More importantly, they want to align their beliefs with their work. This has far-reaching implications for employers; when companies tap into their employees’ sense of meaning and purpose, they have the opportunity to see real engagement on the part of their employees. Hewlett offered an anecdote where Moody’s Investors Service went through a period of reinvention following the financial crisis, and saw their employees become incredibly involved. The business started working at improving a ratings tool for micro finance. The employees, especially the female employees, became highly involved in the project, offering their free time to work on the tool. They invested personal time because they saw this project as a way of using their skills to alleviate poverty and ultimately contribute to the greater good. Hewlett also highlighted the lack of women in the top ranks of industry. She argued that to get women into positions of leadership is not to give them more training, but offer them sponsorship. “Sponsorship is how power is transferred in organizations and left to itself it’s a mini me situation. Because it’s much easier to trust someone who has the same background,” Hewlett said. However, women are currently half as likely to have a sponsor as their male counterparts. Instead, women have more mentors, which is beneficial in some ways, but does not offer the same opportunities to rise up the ladder of industry as sponsorship does. In the end, if companies take women’s motivations into account they will not only improve the quality of life for their female employees, but also see benefits themselves, as the women become more engaged in their work. ■

About: This synthesis feature was adapted from the inaugural Quality of Life conference report by Sodexo. The contributor, Sylvia Ann Hewlett, CEO, Center for Talent Innovation, gave a presentation on gender balance in the workplace.

Antalya. Turkey 2015 ❙ 39

The Official ICC G20 CEO Advisory Group Publication

Global Development / Technology Authored by: Fumbi Chima

Value of Technology for Girls in Emerging Markets Educational establishments need to accommodate ways for girls to gain skills for jobs in the IT sector.

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Technology

he most recent Global Gender Gap report by the World Economic Forum highlighted which countries continued to make strides towards ending gender inequality. Iceland, Finland, Norway, Sweden, Belgium, Nicaragua, the Philippines and Rwanda were all top performers. The report also revealed that 35 countries have closed the health and survival gap entirely and 25 countries have closed the educational attainment gap. Despite the positive news, too many countries still lag behind, particularly emerging or developing countries. Women in developing countries spend a great deal of time taking care of their families and on commercial activities in communities. These communities can serve as incubators for positive change and governments and civil societies should support programs, centers for community development and social activities that empower women and help to bridge the gender gap. At the heart of the solution is technology. Technology plays an increasingly important role as part of the equation in alleviating gender inequality. Simply put, technology and access to technology can liberate women from isolation. There are many organizations recently that are championing this and have demonstrated the power. For example, expanding women’s use of mobile telephones enables their access to information for healthcare, legal rights, security and banking, offering women de facto independence. However, barriers such as gender discrimination, lack of confidence, language difficulties, low literacy and lack of time and money continue to prevent girls and young women from taking full advantage of technology. Overcoming the Barriers The solutions start at school. Educational establishments need to encourage critical thinking and innovation; they need to accommodate ways for girls to participate in extra-curricular activities in order to stimulate new ways of thinking which can help these girls gain skills for jobs in the IT sector. The solutions also come from the government and private industries if they work together. We need greater advocacy and support policies to make internet more accessible and affordable to girls in the developing countries. Offering opportunities such as tools for engaging students in the classroom, making teaching more

participatory would encourage student-led research and builds media and digital literacy skills in the process. Most importantly to ensure that girls have equal access to the equipment. In instances where these girls do not have access to the classroom and or school, it can be brought to them through vocational training or extra-curricular activities. A growing number of countries are including gender as a key component of their National Broadband Plans, for example Nigeria has recently implemented plans that promotes access and incentives for training women to use internet. Education and awareness with the family is critical. Men and boys need to be engaged as allies in the process. Their behaviors have to change. When fathers, brothers and male peers are aware, engaged and supportive of the girls’ development and rights, they will be instrumental in changing broader perceptions. Girls need to have access to female role models A recent example comes to mind. A woman in the Philippines went from being a domestic helper to running her own graphic design company. As a result her children now have choices and opportunities she never had. We often hear stories of rare women at the top of their profession, such as Nombulelo Moholi; Thoko Mokgosi-Mwantembe or Doreen Ramphaleng-Motlaleng and we celebrate their unique stories. But we need to start celebrating women because of their capabilities, not because they are an exception to the rule. We hear it time and again: to empower a woman is to empower a nation. You invest in a woman and she will invest in her family and her community. It goes without saying that women who have access to an education are more likely to contribute to economic growth as well as make better decisions on health and wealth management. Awareness, advocacy and the education of women is essential if we have any hope of empowering girls in patriarchal societies that traditionally do not treat women as equals. According to a 2010 report by the GSMA and the Cherie Blair Foundation, mobile phone ownership can transform the lives of women in the developing world: Of the more than 2,000 women surveyed from four lowto middle-income countries (Bolivia, Egypt, India, and Kenya,) 41 percent of women reported increased income or professional opportunities, 85 percent reported higher independence, and 93 percent reported feeling

WE hEar IT TImE and agaIn: To EmpoWEr a Woman Is To EmpoWEr a naTIon. You InvEsT In a Woman and shE WIll InvEsT In hEr famIlY and hEr communITY.

safer because of mobile phone ownership. Similarly, Intel’s Women and the Web study—which surveyed 2,200 women from India, Egypt, Mexico, and Uganda—reports that 77 percent of the women surveyed used the internet to further their education. Among other examples, 54 percent of women surveyed in India used the internet for financial services and banking, and 68 percent of women surveyed in Egypt reported that they felt access to the internet gave them greater freedom. These studies have demonstrated the importance for women to be able to understand and use technologies, can have a positive impact on women’s freedom of expression, education and employment opportunities. The business opportunity for getting women and girls online and connected is huge. For example the Women and Web report showed that with150 millions girls and women being online it would create approximately betweenUS$50 Billion and US$70 Billion market opportunity and could contribute to an estimated US$13 Billion to US$18 Billion annually to developing countries’ GDP. The potential for technology to improve lives of women and girls is too large an opportunity to miss. The failure to make use of women’s talent will continue to undermine emerging markets economic development. ■

Fumbi Chima is a top executive whose career spans the technology, innovation, and global affairs sphere. In addition to her role as the Chief Information Officer of Walmart Asia, she also serves on the board of Global Affairs Council in Washington, DC and the Diplomatic Courier Global Affairs Media Network. Ms. Chima has been honored with many awards, including the 2015 Trailblazer Award by the Face-to-Face Africa and as one of the Top 100 Women in STEM.

Antalya. Turkey 2015 ❙ 41

The Official ICC G20 CEO Advisory Group Publication

Economy & Finance / Global Trade Authored by: Joy Lutes

Meeting Growing Global Trade Opportunities by Modernizing Infrastructures

How do we develop and enhance the global economy to fuel economic growth and, through increased global trade, broaden and extend the path to prosperity?

ooking at the economy of the United States, more than 28% of U.S. gross domestic product (GDP) is tied to trade and the expectation of many economists is that this figure will continue to grow in the years and decades to come. It is estimated that more than 38 million Americans jobs, or 1 in 5 jobs in the United States, depend on trade. And with 95% of the world’s consumers living beyond the borders of the U.S., it is evident that there is a great deal of opportunity for American businesses of all sizes to reach new markets for their products and services. The fact is we live in a global economy. It is hard to imagine the development known as economic globalization being reversed as international trade and the movement of merchandise, commodities, people and capital further integrate economies in both developed and developing countries around the world. Threats posed by slow economic growth, protectionism, health crises, criminal and terrorist organizations, and others may cause setbacks and, at times, even intimate a retreat from an interconnected world economy. But despite these challenges and an occasional glitch, the reality is that a global economy supported by a global supply chain, which provides a global marketplace for

businesses to compete and consumers with greater choice, is here to stay. The real challenge is how to further develop and enhance the system to fuel economic growth and, through increased global trade, broaden and extend the path to prosperity. While possible new trade agreements intended to level the playing field for American companies tend to generate a great deal of media attention, there are other important ways to also advance the competitiveness of the United States in the global economy. Supply chain, customs, and trade facilitation issues provide an opportunity to accomplish just that. Increasing efficiency and predictability in the global supply chain by modernizing processes, eliminating bottlenecks and enhancing security will make the U.S. economy more attractive and American companies more competitive. For example, transportation and logistics represent 7.7% of U.S. GDP; by comparison, logistics costs represent 16% of China’s GDP, giving the Unites States a valuable comparative advantage over a top competitor. In fact, studies show that countries with efficient logistics systems experience an additional 1% in GDP growth and a 2% increase in trade.

WHile possible neW trade agreements intended to level tHe playing field for american companies tend to generate a great deal of media attention, tHere are otHer important Ways to also advance tHe competitiveness of tHe United states in tHe global economy. sUpply cHain, cUstoms, and trade facilitation issUes provide an opportUnity to accomplisH jUst tHat. 42 ❙ b20turkey.org

At the 2015 Global Supply Chain Summit, U.S. Commerce Secretary Penny Prtizker, stressed, “We need to work together as businesses and government to ensure our supply chains are more innovative, more streamlined and more efficient. This is critical to our nation’s economic competiveness and to the expansion of America’s private sector which is the driver of employment in our country and the back bone to our economic success.” Ann Beauchesne, the U.S. Chamber of Commerce’s vice president for National Security and Emergency Preparedness, asserted, “For our small and medium sized

Global Trade

businesses, efficient supply chains allow them access to 95% of the world’s GDP in less than three days. For our manufacturers, global supply chains are a competitive necessity that allows them to operate in a just-in-time production environment. But major barriers at the border that inhibit the free flow of these supply chains exist. Whether it is global customs, security, regulatory, infrastructure or other issues, these barriers hold back economic growth.” There is widespread recognition that reducing barriers and boosting efficiencies and security in the supply chain will lower transaction costs and make America more competitive. While there are many aspects of the supply chain that can be examined, an important place to start is America’s ports. The United States is served by some 360 commercial ports that provide approximately 3,200 cargo and passenger handling facilities. According to the American Association of Port Authorities, there are more than 150 deep draft seaports accommodating ocean-going vessels, which move over 99% of U.S. overseas trade by weight and 65% by value. The Department of Transportation projects that total freight moved through U.S. ports will increase by more than 50% by 2020, and the volume of international container

traffic will more than double. To support a growing economy and ensure America remains competitive, public investments in our marine transportation and shipping systems are essential. Such investments will apply technological advances to modernize systems which will produce gains in efficiency, safety and expand capacities. The construction of a state-of-the-art, non-intrusive, cargo inspection facility at the Conley Container Terminal at the Port of Boston is an example of government authorities working with the private sector to utilize an important innovative technology to achieve greater efficiencies as well as enhance security. The US Department of Homeland Security and the Massachusetts Port Authority (Massport) has turned to Passport Systems, Inc. to deploy its SmartScan™ 3D automated cargo inspection system to keep cargo processing smooth and efficient while more effectively detecting and identifying contraband. SmartScan™ integrates Passport’s proprietary technologies with conventional high-resolution imaging and intelligent passive radiation detection to automatically clear or detect threat objects in less than two minutes. Dr. Robert J. Ledoux, President & CEO of Passport Systems, affirmed, “Passport Systems uses a range of revolutionary technologies,

designed to protect people, borders and economies from growing forms of threats. Upon delivery, the SmartScan™ 3D scanner is expected to increase the effectiveness by which cargo coming through the Port of Boston is assessed by providing automated materials identification. Our mission is to provide advanced technology and solutions for enhanced safety, security, and contraband detection. We look forward to advancing this capability and seeing that mission to completion.” The global economy is here to stay. In order to remain competitive and take full advantage of the global marketplace, it is imperative that the private and public sectors in the United States work in collaboration to support a dynamic and efficient supply chain. And critical to achieving this objective is ensuring our seaports have modern infrastructures and the latest technologies to securely and efficiently handle the higher volumes of cargo anticipated as we move further into the 21st century. ■

Joy Lutes is the founder and president of Meridian 77 Consulting, LLC, a public relations firm based in Alexandria, VA.

Antalya. Turkey 2015 ❙ 43

The Official ICC G20 CEO Advisory Group Publication

Task Force / Energy Access Goals

Thought Leadership

Authored by: Kimball Chen, Chairman, Energy Transportation Group and Chairman, The Global LPG Partnership

Achieving UN and G20/B20 Energy Access Goals We must gasify as well as electrify— LPG and natural gas must be high priorities, not afterthoughts.

n 2015, the UN, after years of discussion, agreed on the Sustainable Development Goals (“SDG”), which succeed the Millennium Development Goals (“MDG”) as the distillation of the aspirations and priorities of mankind. Sustainable Development Goals 3, 5, 7 and 15 address respectively the ensuring of health, the empowerment of women and girls, the ensuring of universal energy access and the protection of forests. In 2015 the G20, under the Turkish Presidency, continued to refine the G20 approach to infrastructure investment. A major objective of G20 infrastructure discussions has been how to provide universal energy access and how to mobilize the financing necessary to do it. The UN Sustainable Development Goals and the G20 infrastructure goals are aligned in their emphasis on universal energy access. However, to deliver universal energy access on a sustainable and affordable basis requires an understanding of what to prioritize. Historically, the UN and the G20/B20 focuses have been on delivering universal access to electricity. The implicit assumption has been that provision of electricity would satisfy the minimum critical energy needs of most peoples. The reality in the field,

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however, is that providing universal and reliable access to electricity will take decades and huge amounts of money. Especially for cooking, the electricity strategy is too capital intensive and too slow to scale up to meet the needs of hundreds of millions of people. There is an urgent need to achieve a large reduction in the mortality directly caused by cooking with solid fuels (especially wood and charcoal), as well as to reduce the massive deforestation and massive waste of women’s time caused by fuel-gathering. The Development Finance Institutions, the UN agencies (WHO, The World Bank, etc.) and the leading health and development experts have concluded that large-scale provision of clean cooking and heating fuels, especially LPG, must be implemented on an urgent and large-scale basis. Also, the conclusion of the most recent WHO studies is that mortality from using wood and charcoal for cooking claims more lives each year than malaria, AIDS and tuberculosis combined. Yet very little has been invested in delivering access to clean cooking fuels, especially LPG. The major advantages of LPG are its low cost, high speed to deploy and operate, widely available sources of supply, proven technology and ease of procurement.The

capital cost to deliver LPG on a sustainable basis to 1 billion new users could be less than 1/10 the cost of bringing electricity to the same number of people. The speed of LPG deployment could easily be 20 years faster. During the Russian G20 Presidency, the G20 accepted B20 recommendations to prioritize an increase in use of natural gas and natural gas liquids such as LPG as an energy development goal. During the Australian G20 Presidency, the G20 accepted the B20 prioritization of global infrastructure development, in order to achieve energy availability to all peoples. During the Turkish G20 Presidency, the G20 and the B20 embraced the goal of prioritizing the achievement of universal energy access. Such emphasis was evidenced by the 1st October 2015 G20 Conference on Energy Access in Sub-Saharan Africa. As a major objective of the forthcoming 2016 China G20 Presidency, we recommend that the Government of China deepen action-oriented discussion on how to provide affordable and reliable access to energy for all peoples, considering not only electrification, but also giving deep consideration to clean fuels, particularly LPG. Each form of energy should be made available according to its appropriateness in a given market for best contributing to economic development, increased preservation of forest resources, climate change mitigation, health, and empowerment of women and children. ■

Mr. Chen is Chairman of Energy Transportation Group, Inc., which develops international liquefied natural gas (LNG) and liquefied petroleum gas (LPG) projects. He also serves as Chairman of the Global LPG Partnership, a U.N and E.U.-backed public-private partnership leading global efforts to provide LPG to the 1 billion people in developing countries who most urgently need it. Mr. Chen is a past President of the World LPG Association, the global LPG industry association. He advises governments and international agencies regarding energy policy issues and also serves on the International Chamber of Commerce G20 CEO Advisory Group, which provides policy recommendations to G20 Heads of State. Mr. Chen graduated from Harvard University with a B.A. (magna cum laude) in 1973 and with an MBA in 1978.

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The Official ICC G20 CEO Advisory Group Publication

Economy & Finance / Greece and Spain Authored by: Oscar Montealegre

Greece and Spain Parallels: Same Paths, Different Outcomes It could be argued that the best thing that could have happened to Spain is Greece. Less attention is dedicated to the Spanish economy because of the turmoil surrounding Greece.

reece has monopolized the headlines of European news in the last few months, playing a back and forth game of “she loves me, she loves me not…” with the European Union. What’s next for Greece? It could go either way: an unprecedented Grexit may be on the horizon or a third time is a charm bailout will finally be accepted and implemented by EU leaders. Amidst the current Greek drama other EU countries are continuing to combat the legacy of the recession and European debt crisis. Enter Spain. One can argue that the best thing that could have happened to Spain is Greece. Less attention is dedicated to the Spanish economy because of the turmoil surrounding Greece. However, there are similarities between the two countries. Both countries were included in the dubious and unflattering acronym PIIGS: Portugal, Italy, Ireland, Greece, and Spain. Among many factors, one underlying variable that can be attributed to their economic troubles is the gross overspending by federal and regional governments, creating debt levels that seem unsurmountable. Both countries have unemployment rates above 20 percent, and youth unemployment above 50 percent. Spain shares the same troubles as Greece when evaluating current pension levels; both have unsustainable pensions levels that are hurting future growth. When assessing debt vs GDP—the ratio of a country’s debt to its gross domestic product, or the number of years needed to pay back debt—Greece recorded in 2014 a rate of 177 percent, while Spain is at 97 percent. Germany, on the other hand, averaged a 2014 debt to GDP ratio of around 66 percent. In short, Spain—and Italy, Portugal, and one can argue France— are not too far from the problems beleaguering Greece.

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Greece and Spain

AmonG mAny fActorS, one underLyInG vArIAbLe thAt cAn be AttrIbuted to theIr economIc troubLeS IS the GroSS overSpendInG by federAL And reGIonAL GovernmentS, creAtInG debt LeveLS thAt Seem unSurmountAbLe. both countrIeS hAve unempLoyment rAteS Above 20 percent, And youth unempLoyment Above 50 percent.

Fortunately for Spain and the EU, there are quite a few stark differences between the two. In the last few months Spain’s economic growth rate has been the fastest in the last seven years. Spanish government official statistics delivered good news in the spring: in the first three months of 2015, Spain’s economy expanded 2.6 percent compared to the same period in 2014; solidifying the consistency harnessing Spain’s growth, tallying seven consecutive quarterly GDP positive gains. The International Monetary Fund (IMF) also released a report stating that by the end of 2015, Spain’s total economy should grow by an impressive 3.1 percent. Not bad projected 2015 GDP figures compared to Holland’s 2 percent, France’s 1.2 percent, Germany’s 1.8 percent, Italy’s 0.5 percent, and Greece, which may end up with negative GDP and flirting with another recession. However, by no means is Spain out of the woods yet. Certain external factors have been favorable for Spain. The weak euro has made its exports more competitive for existing and new foreign markets. The stronger the U.S. dollar, the more it benefits Spain’s exports. This is important for Spain due to very low domestic consumer demand. From 2010 to 2013, Spain was digging itself out of the recession through exports. And now with the euro being more competitive and affordable, exports are poised to continue its momentum. For example, Spain became the world’s biggest wine exporter in 2014, surpassing France and Italy. Also, it has diversified its exports by sending more goods to Latin America, Asia, and the Middle East. The instability in the Middle East has helped the tourism industry in Spain. So far in 2015, tourists are visiting the Spanish coasts in record numbers. Greece, too, can expect an uptick in tourism but what is preventing many more tourists from visiting is the cap on the amount of euros that can be withdrawn from ATMs. Spain does not have a bank liquidity problem and there is no bad PR stemming the tourism industry. The price of oil freefalling in 2014 has helped keep business costs down for Spain’s enterprises. In addition, when the price of oil drops it’s almost perceived as a tax break, freeing up more money for companies’ operation expenses and cash flow statements, as well as for individuals that desperately need any savings they can grasp to satisfy their daily needs. For Spanish businesses, if they can continue to bring down operating › Antalya. Turkey 2015 ❙ 47

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Economy & Finance / Greece and Spain

› costs, it bears well for the future when domestic demand picks up, which in turn harnesses investment and hiring from Spanish companies. And that is exactly what Spain needs, real long-term jobs. Although Spain is on the right track for growth, unemployment continues to be the most serious ill that is plaguing the country. Currently, there are approximately 5.5 million people unemployed. Since 2007, 3 million jobs were lost due to the economic crisis. Statistics after statistics indicate that more than 50 percent are unemployed between the ages of 16-24. This is more than double the number compared to the European Union average. Even though Spain created approximately 400,000 jobs in 2014, a significant percentage of these jobs were temporary or part-time jobs. The consequence of a high unemployment rate in Spain is that a brain drain is emerging, educated and qualified individuals are emigrating to stronger EU countries, or Mexico, Colombia, and other emerging markets; leaving Spain with little human capital to lift and diversify its economy. Besides unemployment, another high hurdle remains that may not be so easy to overcome—pessimism. Spain has a psychological problem that has emerged from experiencing one of the most damaging

currentLy, there Are ApproxImAteLy 5.5 mILLIon peopLe unempLoyed. SInce 2007, 3 mILLIon jobS were LoSt due to the economIc crISIS. StAtIStIcS After StAtIStIcS IndIcAte thAt more thAn 50 percent Are unempLoyed between the AGeS of 16-24.

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economic crises in the country’s modern history. Any positive economic news is received with skepticism. It’s as if the boom years of the past were a mirage, a fickle memory that will never repeat itself in the Iberian Peninsula. If the Spaniards are lucky, they won’t experience an economic expansion similar to 2004-7007, where property values increased at a surging 44 percent, inflating the inevitable property bubble. Spain’s growth model of the past was predicated on cheap debt and a housing and construction bubble. Now, there’s some diversity in the current economic model and there is a necessity to entrepreneurship that can potentially yield dividends in the near future. Also, unlike Greece, austerity has taken a back seat to labor reforms and exports. This makes recovery in Spain real. According to a report by the IESE University, Spain is at 95 percent to where it was in 2008. GDP numbers are up, but still much lower than pre-crisis level. Spain may be on the tail end of a “lost decade” but there are encouraging signs where it can hang its hat on. For example, employment numbers are up, unemployment is inching downward. Consumer confidence is gradually on the rise due to positive GDP and employment figures. Exports are still thriving but the recovery is no longer being solely driven by exports,

thus Spain is not putting its eggs in one basket, doing what it can to diversify its economy. The tourism industry is booming again. However, most importantly, the average citizen is not feeling that the economy’s wealth is trickling down to them. According to a Spanish survey, 41 percent of respondents think the economy is bad, while 33 percent think it is very bad. If Greece fails, the EU model will not end with it. However, if Spain, Italy, or France is under the same microscope as Greece is today, then the EU dream will be officially over. This possibility exists, yet it is probably for the best that it doesn’t get talked about much. The progress that Spain is making is extremely fundamental for not only Spain, but also the EU. If the EU reduces its sovereign debt, continues to reform stringent labor laws, cuts red tape and promotes and supports the spirit of entrepreneurship, GDP numbers can grow at a faster rate, and Europe will no longer be seen as old and lethargic. It is vital that Spain’s recovery is a real recovery, not driven by borrowing and inflated asset bubbles that eventually pop and create economic devastation. Now if the latter happened, what exactly would be the consequences? Exit Spain from the EU. Exit EU. ■

More than 37,500 foreign companies have already invested in Turkey. How about you?

One of the fastest growing economies in the world and the fastest growing economy in Europe with an average annual real GDP growth rate of 5,1% over the past decade (2004-2013) The fastest growing economy among the OECD members with an average annual growth rate of 5.2% (OECD 2012-2017) 16th largest economy in the world with over $1,1 trillion GDP at PPP (IMF 2013)

A population of 76,6 million with half under the age of 30,4 Access to Europe, Caucasus, Central Asia, the Middle East and North Africa Highly competitive investment incentives as well as exclusive R&D support Around 610,000 university graduates per year

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Sponsored / AERT Moisture Shield

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with MoistureShield light accessories. “More people are enjoying spending time on their decks in the late evening hours, so adding lighting is a natural addition to MoistureShield’s full family of products,” said Brent Gwatney, Sr. Vice President of Sales & Marketing for MoistureShield. “Lighting is a great way to create visual drama and to help people stay safe, especially around stairs.” Specialty railing With the growing popularity of high-end, well-designed outdoor living oases, homeowners are demanding railing that is attractive and not just functional. New railing designs are featuring clean, sleek lines complementing the outdoor space instead of obstructing it. MoistureShield Pro Aluminum Railing features sophisticated, modern lines that enhance any outdoor setting. Since it’s sold in kits and supplied with installed baluster connectors and ergonomic rail brackets,

enhancing a deck or patio with MoistureShield’s Pro Railing is simple. Not only is the flat-top, drink-friendly rail easy to install, but the strong corrosion resistant aluminum alloy is finished with a durable powder coated paint that will retain its color for years to come. It’s even backed by MoistureShield’s industry leading Limited Lifetime Warranty and a 15-year Paint Warranty. The contemporary design and easy-to-maintain materials complement the entire MoistureShield line of high-performance composite decking and illuminating deck lights, making it the perfect railing choice to enhance any backyard. ■

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International Policy / G20 growth Authored by: Dr Robyn Stokes

Could G20 Cities and Mayors be a Vital Ingredient to Turbocharge G20 Growth?

Dr Robyn Stokes is a business strategist and thought leader on events and allied economic leveraging based in Brisbane – host city to the 2014 G20 Leaders Summit.

ith 75% of humanity expected to live in cities by 2050 and cities already generating 80% of global GDP, interest in cities has reached an all-time high. In G20 cities, Mayors and leaders of cities are getting things done - they are passionate about liveability, innovation, digital transformation and jobs and they are measuring their economic performance very well. With the 2% additional growth target by 2018 agreed in Brisbane proving difficult, could 2016 be the year to engage the Mayors and CEOs of G20 cities in delivering G20 initiatives and reforms? Articulating a role for city Mayors in the roll-out of China’s G20 Communique makes a lot of sense. The top 600 cities globally will account for around 60% of GDP by 2025 and mid-tier cities (150,000 to 10 million people with many in China) are the world’s serious growth drivers. Performance data linked to these cities (and related urban clusters) are now guiding the decisions of investors more than country level strategies. As members of the G20 Troika, Australia, Turkey and China each have their own urban success stories to tell and the Troika is an ideal vehicle to bring City Mayors together to turbocharge G20 implementation. In Australia, the city of Brisbane delivered a powerful leverage of the 2014 G20 Leaders Summit and the new Turnbell-led Australian government has just appointed a Minister for Cities joining other G20 nations (China, India and the USA) in shaping an intergovernmental cities agenda. Mayors and CEOs of high growth, ‘mid-tier’ cities (to deliver 40% of global growth by 2025) are especially important contributors to the conversation on global growth. Megacities are not outpacing their host economies in many cases and a number of these middleweight cities will take their place as megacities by 2025. Tracking city

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performance has the benefit of fostering healthy competition between cities but it also highlights how cities attract talent, business migration and growth. The G20 city of Istanbul is an especially interesting case, recognised as the world’s most consistently improved city since 2010 on six leading city indices (Ref: The Business of Cities, JLL, 2015). A global city that stands apart from many others, Istanbul has consistently overtaken mid-tier cities based on its scale, diversified financial services and gateway status, but also its unique resilience. Beijing and Shanghai also rate well on multiple city indices based on their depth of talent, deep global connectivity, broad cultural assets and high quality public sector management. Similar attributes saw Singapore overtake Tokyo and Paris on most indices this year. Our G20 leaders are increasing their engagement with city leaders and some have become active leaders in the ‘smart cities’ revolution – strategies that create highly liveable, compact cities with climate friendly infrastructure and digitally connected services. During Australia’s G20, Prime Minister Modi announced up to 100 Smart City projects in India (new metro satellite cities and enhanced mid-sized cities). Europe has a large number of smart city projects in train and France has also committed 2 billion Euros to India’s smart city plans. In China, around 2 trillion yuan ($163 billion) will be spent on smart cities over the next decade and the White House has committed to $160 million to investigate and leverage 25 new technology collaborations across the USA. If all of these ‘smart cities’ go ahead, climate-friendly infrastructure is expected to return around US$22 trillion in city cost-efficiencies by 2050 (Ref: Global Commission on Economy and Climate). Measures of success will be far more than

the creation of liveable cities, with many new technology-enabled businesses, more jobs and more agile SMEs in G20 nations. Not surprisingly, these projects tie in very neatly with G20 priorities – reducing poverty and inequality, fostering increased productivity and competition, responding to climate change and global energy needs; promoting global trade and attracting new infrastructure investment. The digital economy has been a crosscutting theme of Turkey’s Presidency and its B20 Taskforce. As Mike Smith (CEO of Australia’s ANZ Bank and 2014 Chair of the B20 Financing Growth Taskforce) points out, city infrastructure is not just about ‘concrete, tarmacs and steel’ but getting more out of existing infrastructure via digital technologies and big data (one of the important end goals of creating smart cities). With urban infrastructure investment among the most pressing issues for G20 economies, China’s G20 Presidency could bring a new level of inter-city collaboration. Leaders and delegates at China’s G20 will want to hear more about China’s ‘smart cities’ (the opportunities and obstacles) and ways that G20 cities can forge relationships bi-laterally and multi-laterally to recharge struggling economies. For G20 host nations and cities planning their local leverage of the G20, it is important to immerse the public and private sectors (and talented individuals) in overall efforts to capitalise on the opportunity that the Summit brings. The same principles apply in implementing post-G20 reforms - cooperation across all levels is needed. This paper offers seven key recommendations (starting points only) on how the G20 might engage City Mayors in G20 implementation: 1. Intergovernmental Agreements to accelerate G20 projects Getting things done (and monitoring and reporting performance on G20 agreements)

G20 growth

is an over-riding priority for G20 nations to demonstrate the ROI of participating in the Leaders’ Summit. Serious leveraging of the G20 by host cities is a relatively new phenomenon and by no means consistent. There is no international G20 secretariat to formally house the growing body of knowledge on economic opportunities (and challenges) for cities hosting G20 events or to identify pathways for cities to capitalise on G20 decisions. However, cities across the G20 (host cities and others) are logical contributors to each nation’s scorecard, while they are not in focus in current monitoring of implementation efforts. A G20 Cities Meeting and a short Cities Communique or memorandum could be a powerful way to pass the baton between host cities and actively engage leaders of other cities across the G20 in game changing initiatives. With over 200 city indices (16 of which focus on economic development and growth), there is no shortage of measures to adopt (or adapt) to evaluate outcomes of multi-city projects. Building relationships is the first step….creating opportunities for Ministers for Cities and Mayors to talk about issues ‘peer to peer’. Previous G20 host cities, members of Brisbane’s proposed New World Cities Alliance, the Councils of Capital City Mayors, leaders of G20 regional cities and the Global Alliance of Smart City Councils are all possible participants (and signatories) in collaborative projects to accelerate G20 growth. Going forward, summits of regional cities within G20 nations and international events like the Asia Pacific Cities Summit could also play a role, providing a valuable meeting point for project partners.

FoR G20 hoSt nationS anD citieS pLanninG theiR LocaL LeveRaGe oF the G20, it iS impoRtant to immeRSe the puBLic anD pRivate SectoRS (anD taLenteD inDiviDuaLS) in oveRaLL eFFoRtS to capitaLiSe on the oppoRtunity that the Summit BRinGS.

2. Linking SMEs across G20 Cities Direct engagement of Mayors and CEOs of G20 cities in the World SME Forum (a legacy event of Turkey’s G20) and identifying projects to link SMEs across G20 cities is important. Knowledge intensive, high-tech SMEs have the largest economic multipliers (Ref: Australian Council of Learned Academies) and are a logical starting point for multi-city digital projects to propel SMEs into global supply chains. Getting regional cities and rurally located SMEs involved is a ‘must do’ step to achieve the overall goal of ‘inclusivity’ championed in Turkey (making sure that rural SMEs in a city’s radius have equal access to finance and to ensure urban and rural women participate in SME projects). › Antalya. Turkey 2015 ❙ 77

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International Policy / G20 growth

› 3. Immersion of G20 Young Entrepreneurs in City-Led Initiatives Inclusivity will be further achieved with the immersion of youth in multi-city projects. Young entrepreneurs who participate annually in the G20 are pivotal in city led projects linked to G20 targets. In Australia, it was agreed that investment in small and medium enterprises (SMEs) and young entrepreneurs was essential to meet and exceed the target of an additional 2% increase in global GDP by 2018. There is no shortage of projects to engage youth in civic projects around the world - Bloomberg Philanthropy’s Mayors Challenge is one that G20 leaders could emulate, in this case inviting Mayors of G20 cities to incentivise youth to think creatively, test new approaches, and identify groundbreaking innovations in any policy area that will stimulate growth. Lord Mayor Graham Quirk’s Next Generation engagement program in Brisbane is another good example. G20 City Engagement with the Energy and Climate Agenda At a recent meeting of the C40, a network of the world’s megacities committed to implementing sustainable climate-related policies, it was noted that: ‘Mayors are the world’s great pragmatists: they don’t debate climate change - they deal with the impacts’. Goal setting by nations and cities will be in focus at the UN Framework Convention on Climate Change in Paris and China’s G20 Presidency is expected to reinforce the need to transition to a low carbon future (Ref: Lowy Institute, August 2015). Cities expend as much as a third of the so-called “carbon budget” – the structures we build in cities now will set the scene for emissions over a century or more (Ref: Global Commission on the Economy and Climate, 2015). What makes cities ready to take action on climate change more than national governments? A recent response to this question from a serving city Mayor was: “When you actually have to deal with people, you can’t pander to ignorance and you can’t play to fears…mayors can’t wait for global capitals to get their act together. We have to start acting now.” A post-G20 Cities Summit (introduced earlier) could help to articulate multi-city energy initiatives and concentrate on ideas that are working well at city level to effect change. The Lowy Institute (2015, p. 24) has said, ‘there is nothing to stop creative coalitions of countries engaging on a 78 ❙ b20turkey.org

Sydney, Australia is another champion of open data and will host a Smart Cities Symposium in 2016 with leaders in digital technologies from Korea and Australia. Ideally, these ties between universities and industry leaders will strengthen the overall resolve of nations to provide open data and pave the way for new multi-city, open data projects.

voluntary basis to strengthen energy governance’. Similarly, an enormous amount can be achieved by ‘creative coalitions’ of G20 cities. 5. G20 City Open Data Initiatives Smart cities and the activation of multi-sector, digital business initiatives by G20 cities will be greatly assisted by wider access to open data. A global movement to boost access to open data (including the geo-spatial visualisation of data on world trade) continues to gain momentum despite a lack of consensus across the G20. However, new avenues for data sharing at city (and industry) level may be less challenging. The 2014 report “Open for Business: How Open Data Can Help Achieve the G20 Growth Target” released by Lateral Economics (funded by the Omidyar Network) was the first serious attempt to put a dollar figure on the global economic value of open data. The report drew on a 2013 McKinsey Global Institute study that put a figure of USD $3-5 trillion on the annual value of unlocking open data across sectors. The economic benefits of open data are not lost on those who are passionate about inclusive, resilient and sustainable cities. A showcase of open data in the city of Brisbane depicting G20 trade and investment links attracted widespread interest during Australia’s G20. The Cube (http://www.thecube.qut.edu.au), a highly acclaimed science and engineering centre at Brisbane’s QUT (the venue for Australia’s G20 open data showcase) continues to roll out some of the world’s leading data visualisation projects. The Smart Cities Research Cluster in

6. City-Led Initiatives to implement sustainable development goals (SDGs) It has been suggested that the G20 should pick out four or five critical goals from the SDGs agreed this year by the United Nations (Ref: CIGI cited by the Lowy Institute, August 2015). A similar approach could enable world cities and mid-tier cities across the G20 to forge new ties between developed and developing nations. Instead of inventing new projects, it is likely that many G20 cities will find existing points of alignment with the SDGs or projects that can be readily enhanced to support their chosen goals. 7. G20 City Cooperation to stimulate Infrastructure Investment With an urgent need for increased access to finance to construct new urban infrastructure, information sharing about funding models is a G20 priority. Here, it has already been acknowledged that the international community has a role to play. The USD $15 million G20 Global Infrastructure Hub based in Sydney (funded by 8 nations including Australia) is a sign of greater cooperation across the G20 on infrastructure investment. Greater interaction between the Mayors of G20 cities on projects of mutual interest could lead to more innovative investment models. Some multi-city projects (e.g. Involving small to mid-sized G20 cities and urban clusters) could be advanced through pooled financing. Multi-city G20 projects that rely on ‘soft infrastructure’ may attract a more diverse suite of investors. Deloitte Access Economics has rightly observed that the world’s successful cities know how to get people to work closely together, while simultaneously managing the downsides. China has the opportunity to harness these collective insights in 2016. Cities are critical to prosperity with liveability as important as financial and technical capital. The Mayors of G20 cities understand that…they are the vital ingredient to re-ignite growth across the G20. ■

T H E M E T R O P O L I TA N C O L L EC T I O N t h e s e r i o u s b u s i n e s s o f t i m e l e s s p e r f e c t i o n . Uncompromising experience guides the construction of every hand-turned edge and uncut corner. Fine grain cowhide without and vibrant London Tan calf within conspire to blend understated luxury with elegant necessity. The rigours of work and travel made a singular pleasure. e t t i n g e r . t o e a c h t h e i r o w n .

ETTINGER.CO.UK

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International Policy / Diplomacy Authored by: Katie Crawford

The High Seas of Diplomacy The Aegean Sea’s notoriously disputed borders continue plaguing Greece and Turkey financially and diplomatically.

enerating waves between Greece and Turkey, the Aegean Sea’s notoriously disputed borders continue plaguing both countries financially and diplomatically. Progressing into its fourth decade, strife concerning ownership of the area between the two nations’ mainlands survives as a fundamental component of their diplomatic relations. Defining the Aegean Sea’s territories proves immensely challenging. Greece and Turkey recognize different air and nautical boundaries, resulting in inevitable and frequent conflict. Legally, Greece owns ten miles of airspace above the Aegean Sea but only six miles of nautical territory. The disparity between air and water ownership causes animosity between the two countries. Both states seek equalization of Greece’s territory within and above the Sea, but preach different interpretations of modern solutions. Greece asserts that their nautical ownership matches their ten miles of airspace, while Turkey argues that Greece’s airspace matches Greece’s six miles of nautical territory. Turkey’s determination to prevent Greek expansion of the Aegean Sea stems from Turkey’s comparatively minuscule ownership of the area. Greece controls more than six times as much of the Sea than Turkey, rendering further Greek domination seemingly unnecessary by Turkish standards. Predictably, the disputed area will either assume Greek ownership or remain international territory, the latter pleasing Turkey. From the Greek perspective, Greece asserts their entitlement of extended barriers from an article conceived during the 1982 Convention of the Law of the Sea allowing for 12 total

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Diplomacy

miles of nautical sea ownership. Though Greece’s present claim seeks expansion of 10 total miles, Turkey fears extending Greece’s barriers creates opportunity for future Greek assumption of 12 miles, as allowed by the 30 year doctrine. Cycling back to references of this rivalry’s longevity, in 1976 Greece and Turkey welcomed their first severe disagreement that threatened to generate mass bloodshed. Three years prior, Greece discovered oil on the coast of Thassos, a northern Aegean island, amidst a steep rise in oil prices. Turkey asserted its desire to utilize the island and its oil, but Greece disputed Turkey’s territorial qualification to exploit the area. Finally, in 1976, Turkey dispatched the now famous ship, Sismik I, to explore the contested and oil rich continental shelf. Due to the area’s financial capacity, the expedition nearly triggered an arms conflict between Greece and Turkey. On the brink of war, the two nations sought assistance from the International Court of Justice (ICJ). After three years of hefty deliberation, the ICJ determined that it lacked the jurisdiction to determine who the area and its resources belonged to. Thus, territorial confusion continued. Nearly a decade later, Turkey revisited previous ambitions of exploring the disputed continental shelf. Greece’s Prime Minister, Mr. Andreas Papandreou, declared Turkey’s planned endeavor a cause of war and ordered the Greek armed forces to maintain high alert status. Fearing armed combat, the United States and NATO intervened, convincing Turkey to cancel their expedition. Strife continued in January 1996 when the two nations again sought to claim portions of the Aegean sea lacking clearly defined territories. These conflicts, over a cluster of rocks known to Turkey as Kardak and Greece as Imia, resulted in the two countries fighting to mount their flags as displays of ownership. Though United States intervention eased the conflict, the issue of ownership remains unresolved. For the first time since the 1970s, the 2000s thrived as the first decade not tarnished by extreme clashes between the two nations. However, recent conflict between Turkey and Greece reveals the likely end of a period lacking severe contention over Sea ownership. On July 15, six Turkish military aircrafts entered disputed airspace over the north, central, and southern Aegean Sea 20 times in formation. Of these, two aircrafts carried

For 2015, NATo predicTS Greek expeNdiTure oF 2.4 perceNT oF Greece’S Gdp oN deFeNSe. deSpiTe The NATioN’S FiNANciAl criSiS, Greece SpeNdS A lArGer porTioN oF iTS Gdp oN miliTAry ThAN AlmoST ANy oTher NATo STATe.

military equipment and artillery. While Greece claims Turkey flew in Greek airspace, Turkey claims their military aircrafts flew in international territory. The international community, however, views Turkey’s flights as clear aggression against Greece. Beyond aggravating international diplomacy, airspace conflicts between the two NATO countries proves financially detrimental. Both nations spend notable portions of their GDPs on military spending to dissuade and counter advances from another. For 2015, NATO predicts Greek expenditure of 2.4 percent of Greece’s GDP on defense. Despite the nation’s financial crisis, Greece spends a larger portion of its GDP on military than almost any other NATO state. In 2009, for example, Greece spent 3.1 percent of its GDP on armaments, while the average European state spent a fractional 1.7 percent. Though Turkey spends less than its aggressor across the Sea, Turkey also provides more funding to its military than the average NATO state and credits its need for hefty military spending to countering Greek advances. However, Turkey’s decline in military spending since 2010 reveals the nation’s potential willingness to engage more peacefully with Greece. Mid-July’s conflict between Greece and Turkey regarding disputed territories reminds the international community of ongoing friction between the two nations. With the recent incident and historical trials in mind, focusing on revising relations between the two, supposed NATO allies, proves crucial. Though surely problematic, establishing concrete Aegean Sea boundaries remains essential for preventing armed conflict and limiting unnecessary expenditures. ■ Antalya. Turkey 2015 ❙ 81

The Official ICC G20 CEO Advisory Group Publication

Task Force / Energy Authored by: Niels B. Christiansen

Buildings hold a great potential and are a good target for political focus. They account for 40% of global CO2 emissions, so by applying energy efficient technologies visionary mayors and city developers have the opportunity to drive growth in a sustainable way.

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Thought Leadership

Energy Efficiency puts Money in your Pocket Energy efficiency holds an untapped potential. It saves money, reduces air pollution and strengthens competitiveness. It even delivers short payback time on investments. To seize this opportunity requires an increased awareness of what can be achieved, when the right technologies are put into play.

cross the world, we have the opportunity to earn attractive sums simply by making the most of the huge potential offered by improving energy efficiency. The global potential for energy efficiency is large, as two thirds of the potential to improve energy efficiency in the IEA’s New Policies Scenario1 is yet to be exploited. The low-hanging fruits are within our reach and increased awareness of all the solutions available together with inspiration from benchmark cases can help us identify ways to seize them. Energy efficiency offers multiple benefits Energy efficiency is not only a matter of saving energy and reducing GHG emissions. According to IEA, energy efficiency is a mainstream tool for economic and social development across the world2. Energy efficiency saves money, reduces air pollution, strengthens competitiveness and delivers short payback time on investments. And while doing so, it enables people across the world to achieve the comforts of an improved standard of living without increasing the amount of energy consumed to get it and without increasing their energy bills. Making a difference in China The cost savings alone make energy efficiency worthwhile; Grand farm, a successful enterprise in the Chinese meat industry, has installed a modern energyefficient refrigeration system in their new processing plant and cold storage facilities. This has resulted in safe and healthy meat as well as saving 50% of the installation costs and 30% of the maintenance costs3. China has also recognized the advantages

of district heating, which can cater for a broad range of energy sources. For example, by upgrading old systems with solutions that enable cities to use surplus heat from steelworks or factories, they can reduce coal consumption and CO2 emissions by 60-90% and significantly improve air quality4. The industrial sector in China holds great potential for energy savings; it accounts for over 60% of the country’s entire demand for electricity and 60-70% of this is used by electric motors. The benefit of applying variable speed drives to control motors in China would be so significant that the IEA has suggested they become mandatory5. Variable speed drives can cut 20-40% of energy consumption depending on the application.6 The potential of buildings Buildings hold a great potential and are a good target for political focus. They account for 40% of global CO2 emissions. And in Europe the total square meterage is expected to grow by over 5 billion m2 within the next 15 years. The demolition rates are low – only 0.1% and the renovation rate is s 1.4 %7. The old Ford residential complex in the German Nihl suburb of Cologne is an example of what can be achieved through renovation. New, so-called flat stations, distribute heating and hot water efficiently to 264 apartments while radiator thermostats accurately control the heat supplied. ›

BuIldIngs hold a grEaT poTEnTIal and arE a good TargET for polITIcal focus. ThEy accounT for 40% of gloBal co2 EmIssIons. Antalya. Turkey 2015 ❙ 83

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Task Force / Energy

Energy eﬃciency

Global energy demand is rising as population grows and standards of living increase. Energy-efficient technologies help us solve this by enabling us to get more out of less.

› This has reduced the energy demand by an impressive 94% and significantly cut heating bills7. New building codes have paved the way for one third of the savings in residential heating and further savings are expected from efficiency improvements via electric motor systems8. In the European Union, mandatory energy audits and eco-labels have helped raise awareness of this area and created more transparency. There is an opportunity to do more Knowing your energy performance makes good sense and can help households, companies, cities or even nations identify a potential that otherwise could have gone unnoticed. Increased awareness and comparing their level with what is best in class can help outline the route to achieving an outstanding energy performance. With 30% of the global potential for improving the efficiency of energy being utilized in the New Policies Scenario by IEA, and 40% being exploited the industrial sector we have an opportunity to do more.9 Saving energy boosts profitability and this is a strong incentive for the industrial 84 ❙ b20turkey.org

sector to put energy-efficient technologies into play. Government action can help guide household, construction and business investments in the same direction, so we can make the most of the global potential in these areas too. Increased awareness drives progress Increasing energy efficiency offers other roads to earnings; it reduces the demand for energy and with that the need for investing in expanding power capacity. And the pay-off is also good of the additional investment it would take to move from the 6 degrees scenario to the 2 degrees scenario; data from IEA show that the amount of money saved on the cost of energy is three times larger than the amount spent on the transition to a low-carbon global energy system.10 We can drive progress forward by making the advantages of energy efficiency common knowledge and by showing what can be achieved with modern, proven technologies. That awareness makes it possible to identify all the pockets of opportunity and take action to seize them. ■

IEA World Energy Outlook The Journal of the International Energy Agency, Issue 7, 4th quarter 2014 3 Danfoss A/S, www.danfoss.com 4 Danfoss A/S, www.danfoss.com 5 IEA World Energy Outlook Special Report in Energy and Climate, 6 Danfoss A/S, www.danfoss.com 7 IEA (2013a): Energy Policies of IEA Countries: Germany 2013 Review. Organization for Economic Co-operation and Development (OECD) 8 EEA 2015: European Environmental Agency (EEA): Progress on energy efficiency in Europe 9 IEA World Energy Outlook 10 Energy Technology Perspectives 2015, (IEA) 1

Niels B. Christiansen is the President & CEO of global group Danfoss A/S, which produces and sells an extensive range of energyefficient products and services. He joined Danfoss in 2004, and before that he was Executive Vice President at GN Store Nord and President & CEO of GN Netcom. He has also held leading positions at McKinsey & Co., and Hilti Corp., Switzerland.

Letter to the UN

Her Excellency Ms. Christiana Figueres Executive Secretary of the UNFCCC UNFCCC secretariat - UN Campus Platz der Vereinten Nationen1 53113 Bonn, Germany

Dear Excellencies, Climate change is a critical challenge for our world. As major companies from the oil & gas sector, we recognize both the importance of the climate challenge and the importance of energy to human life and well-being. We acknowledge that the current trend of greenhouse gas emissions is in excess of what the Intergovernmental Panel on Climate Change (IPCC) says is needed to limit the temperature rise to no more than 2 degrees above pre-industrial levels. The challenge is how to meet greater energy demand with less CO2. We stand ready to play our part. Our companies are already taking a number of actions to help limit emissions, such as growing the share of gas in our production, making energy efficiency improvements in our operations and products, providing renewable energy, investing in carbon capture and storage, and exploring new low-carbon technologies and business models. These actions are a key part of our mission to provide the greatest number of people with access to sustainable and secure energy. For us to do more, we need governments across the world to provide us with clear, stable, long-term, ambitious policy frameworks. This would reduce uncertainty and help stimulate investments in the right low carbon technologies and the right resources at the right pace. We believe that a price on carbon should be a key element of these frameworks. If governments act to price carbon, this discourages high carbon options and encourages the most efficient ways of reducing emissions widely, including reduced demand for the most carbon intensive fossil fuels, greater energy efficiency, the use of natural gas in place of coal, increased investment in carbon capture and storage, renewable energy, smart buildings and grids, off-grid access to energy, cleaner cars and new mobility business models and behaviors. Our companies are already exposed to a price on carbon emissions by participating in existing carbon markets and applying ‘shadow’ carbon prices in our own businesses to test whether investments will be viable in a world where carbon has a higher price. Yet, whatever we do to implement carbon pricing ourselves will not be sufficient or commercially sustainable unless national governments introduce carbon pricing

His Excellency Mr. Laurent Fabius President of COP21 Ministry of Foreign Affairs 37, Quai d’Orsay 75007 Paris, France

even-handedly and eventually enable global linkage between national systems. Some economies have not yet taken this step, and this could create uncertainty about investment and disparities in the impact of policy on businesses. Therefore, we call on governments, including at the UNFCCC negotiations in Paris and beyond to: › introduce carbon pricing systems where they do not yet exist at the national or regional levels › create an international framework that could eventually connect national systems. To support progress towards these outcomes, our companies would like to open direct dialogue with the UN and willing governments. We have important areas of interest in and contributions to make to creating and implementing a workable approach to carbon pricing, including: 1. Experience. For more than a century we have provided energy to the world. We are global in reach, closely familiar with managing major projects and risks of many kinds, and well-versed in trading and logistics. As we are already users of carbon pricing systems across the world, exchange of information at international scale could help to identify the best solutions. 2. Motivation. We want to be a part of the solution and deliver energy to society sustainably for many decades to come. Like our counterparts in other industry sectors we will play a key role in implementing the measures and deploying the technologies that will lead to a lower carbon future. Low carbon business models and solutions are fragile until they reach critical size, but with linked carbon pricing systems worldwide, uncertainty would be reduced and such solutions will start to create value for business more rapidly. 3. Pragmatism. We believe our presence at the table could be helpful in designing an approach to carbon pricing that would be both practical and deliverable, as well as ambitious, efficient and effective. 4. A forum for discussion. Our companies and others have come together under the auspices of the World Economic Forum to form the Oil & Gas Climate Initiative, or

are members of the International Emissions Trading Association, the World Bank or the UN Global Compact Carbon Pricing initiatives. We believe these forums may offer an appropriate ground for public-private dialogue on how to price carbon into energy. Practically, we and our senior staff will seek to engage and share our companies’ perspectives on the role of carbon pricing in several important settings: › in our meetings with Ministers and Government representatives › as we attend and address conferences › as we hold engagements with our investors › as we conduct meetings with other stakeholders including partners, suppliers, academics and researchers › as we hold meetings for management and staff within our businesses. Pricing carbon obviously adds a cost to our production and our products – but carbon pricing policy frameworks will contribute to provide our businesses and their many stakeholders with a clear roadmap for future investment, a level playing field for all energy sources across geographies and a clear role in securing a more sustainable future. We acknowledge the long-term challenge and appreciate that this will be transformative across the energy sector. Over many decades, our industry has been innovative and has been at the forefront of change. We are confident that we can build on our trajectory of innovation to meet the challenges of the future. Each of us will copy this letter personally to key contacts among investors, governments, civil society and our staff.

Yours sincerely BG Group plc: Mr. Helge Lund BP plc: Mr. Bob Dudley Eni S.p.A.: Mr. Claudio Descalzi Royal Dutch Shell plc: Mr. Ben van Beurden Statoil ASA: Mr. Eldar Saetre Total S.A.: Mr. Patrick Pouyanné

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This is a picture of a Hadith written in the beautiful Talik style of Turkish calligraphy. It is found on one of the main gates of the Grand Bazaar in Istanbul and says: “The one who earns his living is a beloved of Allah.”

EXPLORING THE RELIGIOUS DIMENSION OF DEVELOPMENT Following this year’s G20 Leaders Summit in Antalya, the G20 Interfaith Summit is being convened in Istanbul from November 16-18 to bring together global and national experts to discuss the role of religion and social harmony in strengthening sustainable development. Participants are coming from more than 35 countries, including Argentina, Australia, Belgium, Brazil, Canada, China, France, Fiji, Germany, Ghana, Greece, India, Israel, Japan, Norway, South Africa, Switzerland, Turkey, United Kingdom, USA, and Zambia. COLLABORATING & PARTICIPATING INSTITUTIONS: Alliance of Civilizations Institute at Fatih Sultan Mehmet Vakif University

Insubria Center on Law and Religion in the Mediterranean Region, Italy

Amity Institute of Advance Legal Studies, New Delhi, India

King Abdulaziz International Centre for Interfaith and Intercultural Dialogue

Brunel Law and Religion Research Group Canadian Council of Churches Centre for Interfaith & Cultural Dialogue, Australia Consejo Argentino para la Libertad Religiosa, Argentina

Ma’din Academy, India Max Planck Institute for Social Anthropology, Germany National Academy of Legal Studies and Research, India Oxford Society of Law and Religion

Department of Law and Religion, Complutense University, Spain

Pacific Theological College, Fiji

Dersaadet Kültür Platformu, Turkey

Religious Freedom and Business Foundation

International Consortium for Law and Religion Studies, Italy

Renmin University, China

International Center for Law and Religion Studies, USA International Religious Liberty Association, Switzerland

Ridd Institute for Religion and Global Policy, Canada Royal Academy of Jurisprudence and Legislation, Spain World Organization of the Scout Movement

Venue Barceló Eresin Topkapi Hotel, Istanbul

For other information about the conference, go to:

www.G20Interfaith.org

#G20Interfaith

G20 INTERFAITH SUMMIT:

Religion, Harmony and Sustainable Development Religious Freedom and the Unleashing of Social Capital • • Religion, Social Cohesion and Economic Factors in Development • Finding Economic Synergies through Interfaith Cooperation

Religion plays a major role in global events. The Interfaith Summit brings together global leaders from various religious and professional backgrounds to explore ways that religious actors and communities can cooperate to enhance harmony and contribute to achievement of sustainable development goals.

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International Policy / UN Secretary General Authored by: Joel Ruet

The Challenges Facing the Next UN Secretary General The inherent difficulty of the job is the result of the gap between the high ideals set out in the UN Charter and the hard reality of great power diplomacy on which it depends.

he first United Nations SecretaryGeneral, Trygve Lie, knew what he was talking about when he described it as “the most impossible job on this earth”. He faced the daunting challenge of building the UN during the early years of the Cold War when divisions between the Soviet bloc and the West left the organisation teetering between paralysis and open conflict. His reward was to be assailed by the Soviet Union for opposing its position on the Korean War and by Senator Joseph McCarthy for being soft of communism. Lie resigned in frustration barely a year into his second term. The inherent difficulty of the SecretaryGeneral’s job is the result of tensions built into the United Nations system, especially the gap between the high ideals set out in the UN Charter and the hard reality of great power diplomacy on which it depends. The organisation embodies the aspiration for a world order managed in the common interest, yet it is based on the authority of national governments acting primarily in their own self-interest. Because the UN has limited financial resources and no military assets of its own, meeting development goals or launching peacekeeping missions requires material support that only member countries can provide. Any major proposal can be vetoed by any of the five permanent members of the Security Council. All of this leaves the office of SecretaryGeneral vested with moral expectations that are not matched by equivalent levels of executive power. To remain confined within these limits is to risk being accused of inaction and complacency in the face of urgent global problems. To push the

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boundaries in the search for workable solutions invites blockage and the inevitable criticism that the Secretary-General has overreached. Consensus has to be built through a painstaking process of diplomacy that balances competing interests; large and small countries, the Security Council and the General Assembly, established and emerging powers. This is to say nothing of tensions between regions and within in them or the changing dynamic of relations among the five permanent members of the Security Council (P5). In having to satisfy everyone, the Secretary-General runs the risk of satisfying no one. The incoming Secretary-General appointed next year will take office at a unique moment in the UN’s history, and one that throws up its own challenges. The first of these is the rising tension within the Security Council, evident in the conflict over Ukraine and the sharp disagreements over Syria.. Russia’s ambitions now include a clearly stated desire to revise the post-Cold War settlement in its favour and a willingness to use armed force in support of that goal. It is an exaggeration to describe this a new Cold War, but the struggle between Russia and the West goes beyond routine a clash of national interests and reflects divergent ideas about the values and structure of the international system itself. It has the potential to create political stalemate within the UN machinery if it isn’t managed properly. A second challenge comes with the shift in global wealth and power to the East and the South. This raises obvious questions about China’s role and whether its traditionally cautious approach within

the international community is about to give way to a more assertive stance. China’s willingness to provide limited diplomatic support to Russia during the Ukraine crisis, by agreeing a strategic energy deal, for example, is a notable contrast to the more neutral stance it adopted over Georgia eight years ago. Emerging regional powers like India, Brazil and Turkey also becoming impatient for change that reflects the emerging power realities of the twentyfirst century. How much longer can these pressures be contained within a UN structure designed by the victorious allies of 1945? A UN that cannot reform is in danger of becoming irrelevant. Increasingly the role of the SecretaryGeneral is no longer just one of mediating between states. A third challenge is the need to acknowledge and harness the growing power of civil society at a global level in furthering the UN’s work. The digital age makes it easier for civil society organisations to operate across borders, mobilise global opinion and subject decision-makers to direct scrutiny. Kofi Annan did much to improve the UN’s working relations with civil society, but CSOs are becoming more demanding at a time when Russia and some other countries see them as vehicles for Western interference in their internal affairs. Groups like 1 For 7 Billion and SheUNited are also seeking to influence the process of selecting the next Secretary-General by calling for more transparency and urging the UN promote the goal of gender equality by giving the job to a woman for the first time. One area where an incoming SecretaryGeneral will hope to benefit from continued

UN Secretary General

improvement is in relations with the United States. Since the Iraq War, when the Bush administration deliberately sidelined the UN, the attitude of the White House has become notably warmer. The passing of the ‘unipolar moment’ has made policy-makers in Washington more aware of UN’s uses in legitimising diplomatic initiatives and mediating relations with other countries. That rapprochement is likely to continue if President Obama is succeeded by another Democrat in 2017, shortly after the next Secretary-General takes office. A Republican President, on the other hand, could be a major headache. At least one Republican hopeful, Rand Paul, has called for the UN to be dissolved. Russia’s revisionist challenge, the rise of China, the emergence of new regional powers, the growth of civil society and uncertainly about America’s future attitude all call for a Secretary-General with a unique combination of qualifications and talents. They will need to be a skilled diplomat and have the ability to maintain the trust and respect of all of the P5. Good relations with the United States, Russia and China in particular would be a major advantage, as would experience of working within the UN system. What the organisation probably needs right now is a leader who already understands its unique institutional dynamics rather than one that has to learn on the job. Someone with experience of working collaboratively with civil society would show a UN willing to move with the times, especially if they also happened to be a woman. It is a formidable job description, but exceptional times call for a SecretaryGeneral with exceptional qualities. ■

The iNComiNg SeCreTary-geNeral appoiNTed NexT year will Take offiCe aT a UNiqUe momeNT iN The UN’S hiSTory, aNd oNe ThaT ThrowS Up iTS owN ChalleNgeS. The firST of TheSe iS The riSiNg TeNSioN wiThiN The SeCUriTy CoUNCil, evideNT iN The CoNfliCT over UkraiNe aNd The Sharp diSagreemeNTS over Syria.

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International Policy / Matahara Authored by: Madeline Bielski

Matahara: An Issue with a Larger Context Japanese women often have to make a difficult choice: career or family? And when women attempt to do both, have a job and children, they are sometimes faced with anger and harassment at the hands of their employer.

n recent years, the issue of maternity harassment, known more colloquially as “matahara”, has come to light in Japan. Matahara is the harassment of pregnant women in the workplace. The Issue: Maternity Harassment Despite being a developed nation, Japan is behind in terms of gender equality. The nation still adheres to conservative gender roles, expecting the women to rear children. Many Japanese employers are resistant to pregnancy amongst their female employees. Some view pregnant women as a drag on a company’s work, because the woman’s reduced workload or maternity leave puts more work on other employees. Subsequently, there are employers who deliberately ignore requests for reduced work, revoke titles, or sometimes even fire pregnant employees. This overt mistreatment of women appears quite illegal because it is. There are laws in

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Japan meant to protect women in the workforce. For example, the Labor Standards Act requires employers to give pregnant women lighter workloads if they ask for it. However, existence and enforcement are two different things. The Japanese government does not have a strong track record of enforcing such female non-discrimination legislation. As a consequence, Japanese women are facing tremendous pressure in the workplace and often resign their positions when they become pregnant. If they don’t resign, women must deal with unfair and often cruel working conditions, which unenforced laws fail to prevent. Approximately 60 percent of women in Japan opt for resignation after the birth of their first child. Yet, there are women who seek to maintain both a career and a family and fight back when confronted with those who work to keep them from that balance.

Matahara

The Voices: Speaking Out Against Matahara On June 24, victims of matahara spoke out at a press conference where they urged the government of Shinzo Abe, to address this maligned trend in the Japanese workplace. Yukari Nishihara was amongst the women who spoke at the event, recounting her experience with her employer ignoring her requests for less heavy lifting in her work as a caregiver. According to The Japan Times, Nishimara compared her employer’s treatment to “encouraging miscarriage”. Four other women discussed their experiences with matahara at the press conference, and many more women have unfortunately found themselves in similar situations. According to a survey conducted by the Japanese Trade Union Conference (JTUC), out of 626 respondents, 26.3 percent said they had experienced matahara themselves and 27.3 percent reported that they knew someone who had experienced it. This press conference was organized by Matahara Net, a Tokyo-based nonprofit dedicated to supporting victims of matahara, as well as educating the public on the issue. The organization is lead by Sayaka Osakabe, a 37 year old former magazine editor, who herself experienced matahara in the workplace. Osakabe suffered two miscarriages and when she asked her employer for a leave of absence if she became pregnant again, to ensure the safety of the pregnancy, she was denied. Osakabe was essentially told if she had a child, she didn’t have a job. She fought back against this discrimination in a labor tribunal and eventually reached a settlement.

Despite being A DevelopeD nAtion, JApAn is behinD in terms of genDer equAlity. the nAtion still ADheres to conservAtive genDer roles, expecting the women to reAr chilDren. Since founding Matahara Net with two other victims, Osakabe has been an outspoken advocate for women’s rights and preventing matahara. This year, the U.S. Department of State gave Osakabe the International Women of Courage Award for her work to change the way families and women are treated in the Japanese workplace. Matahara Net has also achieved some success in combating maternity harassment in the workplace. Last October, Japan’s Supreme Court handed down a ruling in favor of a matahara victim, after she had both the Hiroshima District Court and Hiroshima High Court dismiss her claims. The female plaintiff sued her employer, a Hiroshima based health co-op where she worked as a rehabilitation therapist, for gender discrimination and violations of the Labor Standards Act. The Supreme Court’s decision is significant for the nation, enforcing that women cannot be demoted or discriminated against in any matter due to pregnancy. ›

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International Policy / Matahara

› The Larger Context: Demographics, Economics, and Quality of Life When it comes to combating matahara, it should not be just an issue addressed by victims, but Japanese society as a whole, since the nation is currently experiencing rapid aging and a dropping birth rate: a threatening combination. According to government data, Japan’s population growth in 2015 to be -0.16 percent, meaning the Japanese population is in fact shrinking. In 2014, Japan’s population dropped by 268,800, as the one million births did not offset the 1.27 million deaths. The current fertility rate for women is 1.4 births per woman, well below replacement rate. The number of births in Japan is actually at an all-time low and the number is expected to continue to decline. A possible contributing factor to the declining birth rate, is that more and more young people in Japan are choosing to get married and start a family later in life; they want to start careers before committing to children. The cost of having children in Japan is high: childcare is expensive and competitive, as well as time-consuming. The OECD’s Better Life report noted Japan’s significant wage gap between men and women (26.6 percent), as well as its longhour workplace culture. These negative aspects of the Japanese workplace of clear that women face large economic obstacles when it comes to raising a child and maintaining a job. This declining birth rate is troubling for Japan, a nation with high life expectancy and a growing number of dependents. Dependents are those under the age of 15 and over the age of 64, a dependency ratio is calculated to understand how much pressure is put on the working age population (ages 15-64) to support dependents. The Pew Research Center reports that Japan’s total dependency ratio was 57 dependents per every 100 workers back in 2010. They estimate that this total ratio will grow to 92 dependents per 100 workers by 2050, showing the increased pressure to be put on the workforce to support those older and younger than them. The total dependency ratio is growing primarily due to an aging population. The number of dependents over the age of 64 is expected grow from 36 per 100 workers in 2010 to 72 by 2050: a 36-point jump, whereas the number of dependents under the age of 15 is only expected to raise 4 points by 2050. 92 ❙ b20turkey.org

impact. Women are less likely than men to join the workforce in Japan; 62 percent of women participate in the workforce in comparison to 81 percent of men. This nineteen-point gap is an economic burden for Japan, because keeping women out of the workforce is inefficient. The OECD notes that female education is on the rise and comparable to that of men, but these women aren’t being utilized in the labor market. Despite 62 percent of women having a tertiary education in 2012, they still remain employed at lower rates than men. Japan could have a more efficient and intellectually diverse workforce if women were more welcomed in the workplace. The state has made a great investment in its women through education, but not protecting them from discrimination, like matahara, diminishes the investment. Bloomberg stated that closing the gender employment gap in Japan could lead to a 13-point bump in the nation’s GDP. Matahara and other forms of discrimination against women in the workplace affect the entirety of Japanese society and demand a governmental response.

JApAn coulD hAve A more efficient AnD intellectuAlly Diverse worKforce if women were more welcomeD in the worKplAce.

Notably, Japan has one of the longest life expectancies in the world, with Japanese women having a life expectancy of 87 and men having one of 80, according to the World Health Organization. This means that Japan’s elderly population is not only growing in size, but also living longer, so the burden of support on the workforce is both increasing and lengthy. When it comes to economics, the push to remove pregnant and childbearing women from the workplace is having a negative

The Response: Abe’s “Womenomics” Japan’s Prime Minister Shinzo Abe has made it clear that the economy is of great importance when it comes to his policies. His economic reform, commonly referred to as “abenomics”, focuses on raising the nation’s GDP and fighting stagnation. Included in Abe’s economic reforms are policies specifically geared towards improving the conditions of women in the workforce, nicknamed “womenomics”. These femalefocused reforms include a goal to have 30 percent of managers be women by 2020 and overall rhetoric encouraging women to “shine” in the Japanese economy. These policies have been largely criticized for not focusing enough on the situation of all women, who face great adversity in the workforce. Osakabe has voiced her concerns with Abe’s policies, emphasizing that Japan need to focus on improving its workplace culture for all women. Matahara is a large issue for individual women in the workforce, who hope to pursue both a career and family, and the issue has a much larger context, considering Japan’s aging society and declining workforce. The implications of matahara are large, so the response must be large as well. ■

The Official ICC G20 CEO Advisory Group Publication

Task Force / Global Architecture Authored by: John Denton AO

The Rising Global Architecture for Infrastructure: Catalyst for Growth Infrastructure is pivotal to stimulating and sustaining global economic growth. It creates jobs, connects populations and opens new trade corridors. But the world is experiencing an unprecedented infrastructure shortage. In developing markets alone the World Bank estimates the infrastructure deficit to be $US1 trillion, and growing year on year.

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Thought Leadership

nfrastructure development of the scale the world needs can only be achieved through multilateral cooperation. Institutions like the World Bank, Asian Development Bank and the European Bank for Reconstruction and Development have long supported developing countries with their infrastructure needs. Now we are seeing the rise of a new multilateral architecture for infrastructure, led by China’s Asian Infrastructure Investment Bank. The signs are promising that the AIIB can make a genuine difference to the world’s infrastructure shortage. But it will depend on the relations of the constituents and a high commitment to making it work. Infrastructure: A catalyst for economic growth Sustained low economic growth across the developed world has been well-reported. What’s increasingly concerning is slowing growth in developing countries. The World Bank is projecting ‘developing nation’ growth to be less than 5% for the third year in a row. This is not sufficient to reduce poverty rates. Despite rapid global development over the last half century, many people in developing economies still do not have access to reliable and affordable infrastructure services. The World Bank estimates over 1.3 billion people—almost 20 percent of the world’s population—still have no access to electricity. About 2.5 billion people do not have adequate sanitation and 2.8 billion people still cook their food with solid fuels such as wood. Infrastructure is a catalyst for economic development. Investment in projects creates employment, drives productivity gains for industry and connects emerging countries to the global economy. The economic and social benefits of that investment ripple throughout a nation’s economy. The multiplier effect is such that for every dollar invested in infrastructure, a nation’s economy can grow by up to two dollars. These spillover benefits are further magnified when applied to infrastructure projects that span multiple countries. › › The rise of China, and more broadly Asia, is in large part a result of infrastructure investment being a clear priority in their development. This facilitated international trade growth and foreign direct investment. Multilateral co-operation key to large scale infrastructure The World Economic Forum estimates

that global spending on basic infrastructure— transport, power, water and communications— currently amounts to US$2.7 trillion a year when what is actually needed is US$3.7 trillion. The world needs major projects that will connect countries and regions and support trade and investment flows. In an age of interconnected markets and global supply chains, infrastructure that supports regional connectivity must be a priority. But closing the global infrastructure gap presents a significant financing challenge. Constraints on public funding of infrastructure underscore the need for a strong and dynamic international architecture for infrastructure development. Multilateral development banks (MDBs) and financing institutions were borne from a need for collective action on the challenges to global economic growth and stability. Since the 1960s, these institutions have directed funds to meet the development needs of Africa, Asia, Latin America and Central and Eastern Europe. Now as the world grapples with an ever widening infrastructure gap, new institutions have emerged. The China-led Asian Infrastructure Investment Bank (AIIB) and the BRICS’ New Development Bank have a clear mandate to finance complex infrastructure projects that no single nation can achieve alone. The AIIB is a part of China’s wider “One Belt One Road” vision to deepen trade and investment with the rest of Asia and the wider world. The Policy is firmly focused on infrastructure as the foundation building block to developing new international trade and investment flows for China. AIIB is symbolic of the rise of a new global architecture for infrastructure, and of China’s strengthening position on the global stage. In the past MDBs have been criticised for not being transparent and for focusing on “getting money out the door”, rather than delivering results. Indeed, transparency and governance standards were initially raised as key concerns about the AIIB. However, contrary to these perceptions, China has committed to ensuring the AIIB is a bank of high standards of openness and governance. AIIB’s regulations have been drafted by bankers and legal experts from the West. The Bank has a similar governance structure as both the World Bank and the Asian Development Bank – comprising

three layers - the board of governors, the board of directors and the management. Fifty-seven countries, double the anticipated number, joined the AIIB as founding members. This is testimony to China’s rising influence in international relations. The real challenge will be how the AIIB manages and directs its $50 billion of start-up funds. Projects must be well-chosen based on vigorous risk-benefit analysis. The world will judge the AIIB on how it adheres to its rules and the results it achieves. Will it succeed? This will depend on the relationships between the constituents and their collective commitment to the Bank’s rules and standards. ■

The real challenge WIll Be hoW The aIIB manageS and dIrecTS ITS $50 BIllIon of STarT-Up fUndS. projecTS mUST Be Well-choSen BaSed on vIgoroUS rISk-BenefIT analySIS.

John W.H. Denton AO is a Partner and CEO of Corrs Chambers Westgarth, Australian independent leading law firm. He is a member of the Australian B20 leadership group and a member of the International Chamber of Commerce G20 CEO Advisory Group. John is Chair of the Business Council of Australia’s Global Engagement Taskforce; a board member of Asialink and Asia Society; Chairman (emeritus) of the Experts Group on Trade and Investment in Indonesia and a founding member of the Australia China CEO Roundtable meetings.

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The Official ICC G20 CEO Advisory Group Publication

Task Force / Global Growth Authored by: Andrew N. Liveris

Dual Horizons: How to Turn Short-Term Competitiveness into Long-Term Performance andrew n. liveris rejects the false choice between short and long-term success and describes strategies for delivering both in a world moving at the speed of “live.”

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Thought Leadership

he modern world moves at the speed of “live.” Communication is instantaneous and constant. Many investments are held for a fraction of a second. A country’s economy can rise and fall in a day. This relentless pace of change can create, in leaders, a kind of itchy trigger finger – an impulse to react instantly to every new piece of information. In both business and government, there is a temptation to focus exclusively on the next earnings report or election. Clearly, this tendency is problematic. But so, too, is the most typical response to it: an insistence that we instead focus on long-term strategy. This is not a matter of either-or, but of both-and. Creating value in both the shortand long-term is not only possible; it goes to the heart of an executive’s job description. Indeed, the best near-term results are the ones that better position companies and countries to compete in the long-term. Not unlike a mountain climber, every good leader must be aware of his or her footing at every step – without losing focus on the summit ahead. This “dual horizons” mindset is the only way to reach the peak. As global challenges grow in size and in number, the world will increasingly rely on B20 and G20 leaders to apply this mindset. Particularly when it comes to trade, energy, employment creation and sustainable development, thinking in terms of dual horizons can lead to enormous growth, both imminently and in the years to come. In April, Harvard economist Gregory Mankiw published a New York Times op-ed with the headline: “Economists Actually Agree on This: The Wisdom of Free Trade.” This is one issue where, once we get past fear-mongering about threats to domestic industry, we see that experts overwhelmingly support the consensus we see in action every day: free and fair trade benefits business, government and society alike. Dow is a global company, based in the U.S., but we know that 95 percent of the world’s population – and 80 percent of its purchasing power – lies outside the U.S. No enterprise can possibly succeed in the long-term if it hesitates to be a player in that larger market. The short-term case is equally persuasive. In the chemical industry alone, we stand to save $2 billion each year when remaining trans-Atlantic tariffs are eliminated, and we expect annual increases of $1.2 billion

Particularly when it comes to trade, energy, emPloyment creation and sustainable develoPment, thinking in terms of dual horizons can lead to enormous growth, both imminently and in the years to come.

in export growth when TPP is passed. And when countries make clear commitments to implementing the WTO Trade Facilitation Agreement, large and small businesses benefit from more efficient borders. It is high time we consider free trade a settled issue. Another issue that could lead to enormous growth is strategic energy use. Unfortunately, fears of dwindling supply and environmental consequences over the course of many decades often needlessly mire this issue in the short versus long-term debate. But if we simply reframe the discussion – if we think of investing energy instead of merely consuming it – it is not difficult to align short- and long-term growth strategies. Our host country, Turkey, offers an excellent example of the potential for smart energy investment. Dow is collaborating with the Turkish acrylic fiber company AKSA to innovate and produce carbon fiber – a material five times as strong as steel that weighs two-thirds less. This material can be used in buildings, bridges, tunnels, and cars – making them safer and lighter, saving both lives and fuel. Countries like Turkey can encourage more investment along these lines by making it possible for producers to access an affordable supply of energy, especially when they can add value to that energy domestically. This will incentivize companies to harness current supplies to innovate toward a changing energy future, all while building innovation ecosystems that can develop never-before-seen solutions. In the coming years, humanity will increasingly demand these types of solutions – because a changing energy environment

is just one of the many challenges we will face. By 2025, 20 percent of the world will live in regions where clean water is scarce. By 2030, 40 percent will lack adequate housing. And by 2050, the global population is expected to reach more than 9.6 billion people – with demand for food and energy increasing by more than 60 percent. In September, the UN launched the Sustainable Development Goals, creating an imperative for governments to focus on solving these global challenges. We in the business world need to consider this our imperative, too, for we share a long-term interest in creating a better world. Now, more than ever before, we can and must do well by doing good. In the B20, we have worked to develop a practical, achievable agenda based on the dual horizons mindset. We look forward to working with G20 leaders to embrace this philosophy, which will pave the way for unprecedented success – in the next quarter and the next quarter-century. ■

Andrew N. Liveris is Chairman and Chief Executive Officer of The Dow Chemical Company, a global technology company focused on developing innovative solutions at the intersections of the physical, materials, polymer and biological sciences with 2014 annual sales of more than $58 billion.

Antalya. Turkey 2015 ❙ 97

The Official ICC G20 CEO Advisory Group Publication

Task Force / Human Capital Authored by: David Iakobachvili

Human Capital for Emerging Markets Investment in human capital can bring an enormous return and the flight of such capital may cause the highest damage to sustainable development.

98 ❙ b20turkey.org

ith sustainable, well-balanced and inclusive growth at the top of the global leaders’ agenda, it must be subject to coordinated efforts by the State, Business and Civil Society on all the core directions of social and economic development. In industry, the success of such efforts depends on the efficient synthesis of fixed assets (industrial buildings, machinery and equipment) with financial and human capital. It’s hard to say which of those components is more important; it is without doubt, however that human capital reproduction (and moreover its upgraded reproduction) is the most complicated process. Human capital deficit, measured by quality rather than quantity, at the times of transition to new technological set-up is experienced by many countries, but the emerging market economies suffer from such a deficit more than others. Besides general problems, they are facing additional challenges related to transitional character of their economy and the past times heavy legacy. Long lasting “brain drain” to so-called “mature economies” is among such challenges. Their full spectrum is reflected not only in the partially successful 15 year Millennium Development Goals (MDG) program but also in its updated version: the Sustainable Development Goals (SDG) to run until 2030, most recently approved by the UN. The experience obtained in the chair of B20 Job Creation, Employment and Investment in Human Capital Task Force, whilst Russia held the G20 presidency, and the follow-up activities in the same direction during the Australian and Turkish presidency, cause a desire to share some conclusions and observations with the colleagues in B20 - G20 process. The work of international business community on the most pressing issues under the Turkish presidency focused on small and medium enterprise (SME) development, has led to the set of 19 B20 policy recommendations “to support the G20 leaders in their ongoing mission to implement structural reforms and to ensure strong, sustainable and balanced growth”. At least 3 of those recommendations are directly related to human capital development and amongst them is one calling to “develop and finance programs aimed at reducing skills mismatches, in particular technical, managerial, and entrepreneurial skills”. This is worth particular attention.

Thought Leadership

The role of human capital for SME development with regards to sustainable and inclusive growth is equally important compared to adequate financing. The September meeting of the G20 Ministers of Labor and Ministers of Finance in Ankara, in parallel with the final B20 conference, has confirmed this. Innovative development, most probably among the priorities for the forthcoming PRC G20 presidency, is also hardly possible without a proper human capital development. Business is unable to secure an adequate supply of human capital for modern industries while acting alone, as well as the State acting separately from the business. Such problems can only be solved via the synergy of public-private partnership (PPP), when basic education and productive skills form a starting point for the all-inclusive lifetime learning and training system (or retraining when necessary). This goal is of primary economic social importance. When undertaking innovative development, China mustn’t ignore the role of human capital. According to PRC Prime Minister Li Keqiang, the future economy will be fueled by two “engines”: entrepreneurship and innovation. China is promoting start-ups, stimulating banks and other financial institutions to support SMEs. The Chinese government has allocated around US$57billion, via more than 1000 investment agencies to boost entrepreneurship. An ambitious goal was set to transfer the Chinese economy in 2020 to an innovative development way. The World Economic Forum last year rated China to be 33rd in the global ranking for innovation, although there is little doubt they will reach their goal. Even now, enormous resources are being invested in human capital. China has more than 2,600 universities, and over 30 million school graduates are fighting each year for entrance to them. For the past 5 years, Chinese parents have spent about US$40billion per annum to cover the costs of their youngsters studying abroad. A lot of attention is paid to human capital development in Russia. In his address last September to investors at the Eastern Economic Forum on Russkiy Island (where the 2012 APEC Leaders’ Summit was held), President Putin called for the creation of a network of international education centers in the Asia-Pacific region, together with world-class research and industrial cooperation laboratories. The region best-

The experIence obTaIned In The chaIr of b20 Job creaTIon, employmenT and InvesTmenT In human capITal Task force, whIlsT russIa held The G20 presIdency, and The follow-up acTIvITIes In The same dIrecTIon durInG The ausTralIan and TurkIsh presIdency, cause a desIre To share some conclusIons and observaTIons wITh The colleaGues In b20 - G20 process.

known as the “global workshop”, with its fast growing education system, universities, engineering centers and hightech manufacturing -what we call “economy of knowledge and intellect” - is building up mighty mega-science research and development (R&D) platforms capable of leading to real breakthroughs. Such a platform is already being developed in the Russian Far East. As has been said: “today, together with colleagues from China, Japan, India and other Asia-Pacific counties, supported by business, fundamental and applied research is actively carried out here”. People are coming to study and work. “The Far East is in need of qualified specialists, scientists, engineers, managers, production process organizers, workers with unique skills and qualifications. And the Agency for Human Capital Development specially created in the Far East would take care searching and attracting such people”. Would educate and train people of the region, thus secure the human capital development. One may suppose that the future belongs to such R&D + Production (RDP) platforms, mega-centers and PPP-based agencies for human capital development with their networks around the world, equally covering emerging and mature market economies.

It makes sense to expand the possibilities to form such a network under the auspices of a global hub, similar to that established in Sydney for infrastructure investment as per the G20 Brisbane decisions. There is only one precondition: the Human Capital Development Hub should be established in an emerging market economy country. ■

David Iakobachvili is President of Orion Heritage, Sistema Group Deputy Chairman, Board Member of the Russian Union of Industrialists and Entrepreneurs (RSPP) and the Russian Chamber of Commerce and Industry. President of the Russian-American Business Council, Chairman of RusBrand partnership, Coordination Council member on Protection of Intellectual Property and General Council member of Business Russia LLC; member of WEF in Davos, B20 IBAC and Association the French-Russian Dialogue; member of the Advisory Council on Food Security, Presidential International Council of University of New York and the Bureau of Presidium of the Russian-Jewish Congress.

Antalya. Turkey 2015 ❙ 99

The Official ICC G20 CEO Advisory Group Publication

Task Force / Doha Authored by: Jamal J. Malaikah

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Thought Leadership

Saving Doha: Focusing on Priority issues Despite the repeated setbacks to the DDA, and the continued liberalization of trade through an ever-growing web of bilateral preferential trade agreements, the business community needs a multilateral trade agreement.

Where does the DDA stand? In November 2001, in Doha, trade ministers launched a new global round of trade negotiations, the Doha Development Agenda (DDA), which was to be concluded by 1 January 2005. More than 10 years later, at the end of July 2015, WTO members missed yet another deadline when they failed to reach an agreement on the Work Program to advance the remaining DDA issues. The Work Program was to constitute a springboard towards the World Trade Organization’s (WTO) 10th Ministerial Conference that will be held in Nairobi in December 2015 and provide some visibility regarding the long-awaited conclusion of the DDA. Why does the DDA remain a priority for the business community? Despite the repeated setbacks to the DDA, and the continued liberalization of trade through an ever-growing web of bilateral and plurilateral preferential trade agreements, the business community needs a multilateral trade agreement. 20 years after the establishment of the modern multilateral trading system that is embodied in the WTO, business requires a more open, balanced and transparent trade environment to support the global economic recovery and sustainable development. The reasons for the current deadlock are numerous. Rather than analyzing these, let me focus on two priority issues where progress is possible in the near term with significant engagement from G20 governments with the support of B20.

WhAt Are the priorities for the business community in the DDA? how to revive and conclude the DDA? First, in line with the priorities of the B20 Turkish Presidency, G20 governments must rapidly ratify and implement the Agreement on Trade Facilitation (TFA) that was adopted at the last WTO Ministerial Conference in Bali in December 2013. The TFA must be ratified by at least 107 WTO members to enter into force. To date, only 12 – of which 5 are G20 members – have ratified it. Prior to the Nairobi WTO Ministerial Conference, G20 governments must place the ratification and implementation of the TFA at the top of their priority list to encourage other WTO members to follow their lead. The TFA, once in force, will bring direct economic benefits to all operators. It is expected to result in 1 trillion dollars in additional trade (or one percent of global GDP), a reduction of trade costs by 15 percent and the creation of 21 million jobs. ›

The reAsons for The currenT DeADlock Are numerous. rATher ThAn AnAlyzing These, leT me focus on Two prioriTy issues where progress is possible in The neAr Term wiTh significAnT engAgemenT from g20 governmenTs wiTh The supporT of b20. Antalya. Turkey 2015 ❙ 101

The Official ICC G20 CEO Advisory Group Publication

Task Force / Doha

› Second, G20 governments should more actively engage in the DDA negotiations, staring with the negotiations on marketaccess for non-agricultural goods (NAMA). As recently reported by the Chairman of the NAMA Negotiating Group, the “relatively strong engagement by Members was unfortunately not matched by concrete output”. While certain WTO members may have difficulties conceiving the outcome of the NAMA negotiations in the absence of visible progress on other issues – and in particular, agriculture – the G20 membership should support engagement in different settings to explore potential solutions, accelerate the exploratory phase and start evaluating possible options that could be used as a basis for the Work Program. Building on the work done since the initiation of the negotiations 14 years ago, WTO members should, in particular, address the tariff reduction formula and alternative approaches to reduce tariffs; resume technical work on technical barriers to trade as these increasingly impair trade; and develop

wiTh sufficienT poliTicAl will, An AgreemenT on A work progrAm To finAlly concluDe The DDA negoTiATions is possible. 102 ❙ b20turkey.org

innovative sectoral proposals where the level of ambition is greater. Third, progress is required in the Rules Negotiations, which aim to clarify and improve disciplines regarding anti-dumping and countervailing measures as well as subsidies. Recent reports by the WTO as well as the OECD and the UNCTAD have confirmed that a very significant share of trade-restrictive measures take the form of trade remedies. The 16th Global Trade Alert Report, noted that “32% of all protectionist measures implemented by the G20 during the crisis era were antidumping, countervailing duties, or safeguards actions.” G20 governments cannot afford to wait for the Work Program to be approved for the “core” negotiating issues, which include agriculture, NAMA and services, before beginning to work on amendments to the WTO Anti-Dumping Agreement and Agreement on Subsidies and Countervailing Measures. WTO members have recently reviewed new proposals, including some intended to guarantee greater transparency and due-process so as to provide more predictability to the business community. This is a positive development. G20 governments, however, must take negotiations a step further and actually engage on the definition a Work Program that includes rules matters. With sufficient political will, an agreement on a Work Program to finally conclude the DDA negotiations is possible. The business community should thus reiterate to G20

governments, and those of other WTO members, that failure to reach a multilateral trade agreement in the near term is not an option. The conclusion of an agreement is essential for the credibility of the multilateral system and for the creation of an environment that is more conducive to economic development. The business community needs a rapid conclusion to the DDA negotiations to support future growth. ■

Jamal J. Malaikah is President and Chief Operating Officer (COO) of National Petrochemical Industrial Company (NATPET) since 2008. Previously, he was a Managing Director of Copak, Egypt and a Senior General Manager of Saudi Carton Company. He held senior positions in several projects at Xenel Industries Limited, Saudi Arabia. Jamal is a member of the Boards of Directors Memberships of Al Ahli Takaful Company (ATC), Public Insurance Company in Saudi Arabia. He is also a member of the Petrochemical Manufacturers Committee (PMC), Saudi Arabia and a member of Turkey’s B20 Trade Taskforce having previously been a member of Australia’s B20 Trade taskforce.

The Official ICC G20 CEO Advisory Group Publication