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South Korea Relishes Role as G-20 Chair
Simon Martin | February 26, 2010

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Seoul. South Korea, seeking a greater world role to match its manufacturing might, will this weekend host its first meeting of the top global economic cooperation forum.

The country rose from the ashes of the Korean War to become the world’s top shipbuilder and fifth largest carmaker.

As this year’s chair of the Group of 20 developed and emerging economies, it relishes its new diplomatic stature.

The forum “can become a chance to upgrade our country’s status in the international community,” Foreign Minister Yu Myung-Hwan said.

Deputy finance ministers and deputy central bank governors meet over the weekend at Incheon, west of Seoul, in the first preparatory meeting for this year’s summits, in Toronto in June and in Seoul in November.

Delegates will discuss efforts to coordinate exit strategies from stimulus policies and to establish a framework for “strong, sustainable and balanced” growth.

Reforms in the governance of international bodies such as the IMF and World Bank, especially adjustments to the quota system, and plans to improve financial regulation will be on the agenda.

Also up for discussion will be a proposed global financial safety net “to mitigate unnecessary foreign exchange reserves accumulation in emerging economies,” the ministry said.

South Korean officials said the Toronto summit would focus on exit strategies from the crisis, while the Seoul gathering would consider ways to build a more durable and fairer world economy.

Sakong Il, a former finance minister who chairs the summit organizing committee, said global economic imbalances were one of the fundamental reasons for the slump.

Rebalancing would depend on strong safety nets to shield economies — especially small and open ones — from volatile capital flows and discourage them from piling up foreign reserves.

Gaps in income and development must also be addressed, Sakong said.

South Korea, once a dirt-poor nation living on foreign aid in the 1950s, is now a donor.

Sakong said this experience — and lessons learned from the 1997-98 Asian financial crisis — meant South Korea was well placed to reach out to developing countries.

He noted that the G-20 — while accounting for 85 percent of global GDP — only represented a fraction of the 192 UN members.

“Unless we reflect the views and concerns of the other 172, the G-20 will not become a credible global body,” Sakong said.

Shin Hyun-song, a senior presidential adviser on the international economy, said development would be a very important part of this year’s G-20 process.

“Korea can be a bridge between advanced and developing countries. It has no history as an imperialistic power and unlike the US is not part of a global power structure — it has less baggage,” Shin said.

The G-20 is now recognized as the world’s top economic forum, replacing the G-7 club of rich nations.

“We feel a great responsibility for making the November summit another success for the sake of the credibility of the G-20 process,” Sakong said.

“We have to produce more deliverables, implementable policy measures, rather than just making the summit another feast of rhetoric or a photo session.”



Agence France-Presse