* Finance ministers, central bankers meet this week
* Turkey’s domestic problems have diverted attention
* China, Fed policy uppermost on policymakers’ minds
By David Dolan and Dasha Afanasieva
ANKARA, Sept 1 (Reuters) - When Turkey took over the helm of the G20 this year, it hoped to promote an image of an emerging economic power forging a strategy to tackle sluggish global growth and giving low-income nations a stronger voice.
But as G20 finance ministers and central bankers meet in Ankara this week, such aspirations seem unlikely to be realised. Political upheaval at home and conflict on its borders have diverted its attention and left Turkey looking anything but a model emerging market.
Confidence in its $870 billion economy has taken a deep blow this year, after a June election deprived the ruling AK Party of the ability to govern alone for the first time in more than a decade, and resurgent violence in the mainly Kurdish southeast left a three-year peace process near to collapse.
A suicide bombing in the town of Suruc on the Syrian border in July, blamed on Islamic State, meanwhile served as reminder of the proximity of war. Turkish fighter jets have since joined the U.S.-led coalition in bombing raids across the border.
With economic growth slowing and the lira currency plunging to record lows, business leaders and investors are already describing 2015 as a “lost year” for the Turkish economy, leaving G20 ambitions low on the agenda.
“There isn’t much bandwidth for planning how to use the G20 presidency to achieve clear goals,” said Jonathan Friedman, a Turkey analyst at London-based risk consultancy Stroz Friedberg, noting that Ankara’s domestic turmoil had taken a severe toll on its international standing.
“Turkey’s soft power has declined so rapidly over the last two years. Turkey doesn’t have the same credibility on the G20 stage as it would have had a couple of years back,” he said.
Concern about the state of China’s economy and worries about the Greek financial crisis will be high on the minds of the finance ministers and central banks when they meet in Ankara on Friday and Saturday.
At their first meeting under the Turkish presidency in February, the ministers sketched an uncertain outlook for global growth, with major economies running at different speeds and monetary policies diverging.
But as the global economy has worsened, Turkey looks unlikely to be able to play a more decisive role, especially since the man originally tasked with coordinating the G20 presidency, Ali Babacan, is no longer the deputy prime minister, nor a member of the cabinet.
Babacan was replaced last week when Prime Minister Ahmet Davutoglu was forced to form a temporary, power-sharing cabinet after his AK Party failed to find a junior coalition partner following the loss of its single-party majority in June.
“In the past we would have been looking at some kind of coordinated global strategy to turn the mood ... but doubt we will see that,” Timothy Ash, credit strategist at Nomura, said of this week’s meetings in Ankara.
The inevitable tightening of the U.S. Federal Reserve’s monetary policy, China’s “deep-seated” problems, and the individual, country-specific challenges in many emerging markets (EMs) were beyond the control of the G20, he noted.
“There is a need for EMs to focus back on country fundamentals in my view. Get back to basics of prudent macro policy, and structural reform at the micro level ... It’s about reducing vulnerabilities and reforming to make each country a good place to invest,” Ash said.
“At this stage (I‘m) not sure what Turkey can really offer, given it does not really have a functioning government itself.”
Babacan’s departure means Turkey has lost a name trusted in international financial and political circles, columnist Gila Benmayor wrote in the Hurriyet Daily News.
“Unfortunately, Turkey has missed an important chance of promotion ... It has (instead) attracted the international media’s attention with issues like its government crisis, terror events and refugee crisis,” she said, referring to the Kurdish unrest and its struggle with an influx of Syrian migrants.
“In addition, Turkey has not focused properly on issues that it promised it would prioritise, like corruption, employment and support to SMEs,” Benmayor wrote.
The G20 agreed in Brisbane, Australia, last year to launch new measures to raise their collective gross domestic product growth and create millions of new jobs over the next five years.
The pledge, called the Brisbane Action Plan, entailed hundreds of commitments. Turkey has said implementation of those commitments is critical to the credibility of the G20.
A senior Turkish official told Reuters in June that countries were narrowing down their commitments to a handful each and should be able to show progress by the end of Turkey’s presidency this year.
But questions remain.
“The big concern is implementation,” said John Kirton, a political science professor at the University of Toronto, who specialises in global governance issues including the G20.
“Babacan said at the beginning of Turkey’s year they were going to put commitments up on the website, so everyone could track implementation and see how it was being done. So far we’ve seen nothing, publicly,” he said. (Editing by Nick Tattersall/Jeremy Gaunt)