Turkey will take over the G20 presidency for 2015 following the G20 Leaders' Summit being held in the Australian city of Brisbane on Nov. 15-16. This summit will be of critical importance for Turkey, but it will also have strategic significance on a global scale. During the summit, developing countries in the eastern and southern parts of the world will seek ways to overcome the present economic and commercial status quo in such matters as growth, trading and energy sharing. It is important that the G20 will mainly address topics such as energy, global growth, economic improvement of countries and new rules of global trading; however, what is more important is whether the G20 will develop a holistic solution for all of these issues.
Turkey has much to do to help facilitate the gradual replacement of the G8 with the G20 and for the reconstruction of all top economic and political institutions of the current system in line with the common interests of the entirety of the world, rather than caring about the benefits of the G8 countries alone. I hope that this summit will be a starting point in this regard.
But, for this summit to be such a starting point, developing countries should introduce an alternative monetary and trading system to the current one, which was founded with the Bretton Woods Conference in 1944 and began collapsing in 1971 when former U.S. President Richard Nixon removed dollar's dependency on gold. The system was supported with the introduction of the euro in 2000, but it also failed to stop systematic collapse.
Today, the global economy, particularly the European economy, has not yet overcome the crisis that broke out in 2008. On the contrary, the risk of recession even started to threaten such dominant countries as Germany. The monetary system that was introduced after World War II does not have the dynamics that will meet the requirements of the global economy henceforward.
A new monetary system is inevitable. Bretton Woods was not an agreement but an imposition inflicted by the U.S. At the Bretton Woods Conference, American economist Harry Dexter White's plan was agreed on versus that of his British counterpart John Maynard Keynes in order to reconstruct the capitalist system.
The White Plan put forward a fixed exchange rate system based on dollar, which ensured the convertibility of the dollar to gold and would be run by the International Monetary Fund (IMF) and World Bank. This, beyond any doubt, was the U.S.'s economic hegemony in action. The White Plan implicitly accepted that only countries that had deficit in their foreign payments should adjust the rate of exchange. In other words, the plan did not foresee that the U.S. would have an external deficit. For many years, the IMF functioned as a supervisory authority that made countries with external deficit devalue their money at certain rates to close this deficit, in accordance to the White Plan. In this respect, the IMF's orthodox prescriptions' starting point is always assimilation of local prices and international prices.
As for the Keynes Plan, it suggested establishing a clearing union that would act as a kind of global central bank. The commercial transactions of this system would be based on a new global currency called the bancor that would also be dependent on gold.
The monetary system that was introduced in 1944 is one of the mainsprings of the current crisis. Today, developing countries should conduct their commercial transactions with their own currency and establish new customs unions based on it rather than relying on a dollar-driven system. China's investment plans as a part of the New Silk Road that was announced at the recent Asia-Pacific Economic Cooperation (APEC) Summit showed us that the direction of capital and commodity flow is shifting from the west to the east. Now, the target should be reaching a new monetary and trading system, which is based on G20 consensus. This consensus will lead to a new trading network and will make its legal superstructure transparent.
Investments that will be made in new energy lines and commercial transits under the leadership of such countries as China and Turkey in the next decade will re-determine borders and economies. These investments are poised to connect the continental markets of Asia and Europe independently from borders of the nation-states. Russia, China, India, Iran and Turkey are the key countries of this integration.
The importance of Turkey is also increasing within the context of EU membership. It is a very proper strategy for Turkey to insist on EU membership, despite the current crisis and disarray that the EU experiences. This makes Turkey a country that has the potential for changing both its east and west.
It goes without saying that the Transatlantic Trade and Investment Partnership (TTIP) will only be possible with middle and southern commercial transits that will connect Europe and Asia-Pacific passing through Turkey. The Trans-Pacific Partnership (TTP) will conclusively be established when a railway line, which can also be defined as Middle Corridor starting from South Korea and passing through China, Kyrgyzstan, Uzbekistan, the Caspian Sea, Azerbaijan, Georgia and reaching Europe via Turkey, is completed. Moreover, the fact that this line will coincide with southern road in Iran and Turkey is indicative of a new period. This great integration is the only way for Europe. For all these reasons, the critical role of Turkey, which will host the G20 and B20 summits in 2015 as a part of the G20 presidency, is never coincidental.