By Tristram Sainsbury, a Research Fellow in the Lowy Institute G20 Studies Centre, and Hannah Wurf, a Research Associate in the G20 Studies Centre.
Next week, G20 finance ministers and central bank governors will gather for their third meeting during Turkey's presidency. With just two and half months until leaders assemble in Antalya for this year's summit, these meetings give the G20 an opportunity to confirm 2015 outcomes and demonstrate that the G20 remains the premier forum for international economic cooperation.
While Turkey is gearing up for the G20 Summit, the government remains in a precarious situation. President Erdogan's Justice and Development Party has not won the majority it needs to govern alone, and a coalition seems increasingly unlikely. The next round of elections could take place on 1 November, two weeks before the G20 summit. In the meantime, Erdogan has announced his intention to lead the summit. This is against the backdrop of a Turkish bombing campaign against ISIS, the 1.8 million-strong Syrian refugee crisis, and another terrorist attack in Istanbul this month.
This is not to downplay the successes of the Turkish G20 presidency to date. As Ussal Sahbaz and Feride Inan outline in the latest Lowy Institute G20 Monitor, Turkey has made headway on all three of its priorities this year (investment, inclusiveness, and implementation).
Turkey has introduced two initiatives to add to the G20's ongoing efforts to pursue strong, sustainable, and balanced growth: an accountability framework and country-specific investment strategies that each G20 member will prepare. Turkey has also launched a World Small and Medium Enterprise (SME) forum promoting access to finance and aimed at integrating small and medium businesses into the global economy. The narrative of 'inclusiveness' will help the legitimacy of the G20 in non-G20 countries (eg. efforts to address energy access in Sub-Saharan Africa).
However, the G20 faces some long-term dilemmas. It will need to make progress across the broader G20 agenda, including decisions on the capital requirements for too-big-to-fail banks and the final eight recommended actions as part of the two-year G20/OECD Base Erosion and Profit Shifting agenda, and outline the G20's next steps in these areas.
Moreover, the second half of 2015 is crowded with global summits, including the UN Sustainable Development Summit in late September and the UN Framework Convention for Climate Change meeting in December. Decisions made at these conferences will define the future direction in key fields of G20 interest.
Following on from the Australian presidency, there are still questions about how to boost growth (in particular, what countries will do to reach the 2% growth target) and the progress of the Global Infrastructure Hub. The Hub now has a CEO (Christopher Heathcote) and a website domain, although details remain scarce. It is expected to deliver its initial business plan at the third finance ministers' meeting.
More ambition is needed for the G20 national growth plans. Earlier this year, we highlighted the need for more accountability to encourage implementation of the plans. More recently, Adam Triggs from the Australian National University has argued that 'critical reforms in key countries are not being implemented and...there is not the political will to fill the gap'. Last week, the Treasurer announced that Australia would be redrafting its growth commitments. More countries will need to do the same.
The global economy is still experiencing sluggish growth and faces a number of ongoing risks, including the eventual raising of US interest rates, the slowing of the Chinese economy, and the ongoing Greek sovereign debt saga. The G20 will have to respond, and Turkey will need to take a lead over the coming months in order to define its reputation as G20 president.