Wednesday, October 27, 2010

The Seoul Summit will be delivering on previous G20 commitments

The top priority of the agenda for the Seoul Summit will be delivering
on previous G20 commitments. However, Korea, as the G20 president
for 2010, will also bring new perspectives and new issues to the G20,
with a view toward addressing the needs of the emerging and
developing world as part of the effort to support sustainable growth 
globally. Toward that end, Korea will introduce plans for a global
financial safety net system and development issues as additional
agenda items.

1. Global Financial Safety Nets

"We acknowledged a need for national, regional and international
efforts to deal with capital flow volatility, financial fragility, and prevent crisis contagion.We task our Finance Ministers and Central Bank Governors to prepare policy options, based on sound incentives, to strengthen global financial safety nets for our consideration at the Seoul Summit." G20 Communique, June 26 – 27, 2010
Korea is advocating strengthening global financial safety nets to assist countries to deal with capital volatility. Without reliable financial safety nets, many emerging and developing countries have had to rely on self-insurance, giving them greater impetus to accumulate large foreign reserves.
 That trend is likely to continue in the wake of the 2008-9 crisis, when countries with large reserves fared better than countries with smaller reserves. In Korea’s view, a credible global financial safety net would reduce pressure on governments to continue adding to those reserves.
For financial safety nets to be effective, on-going efforts to replenish the IMF’s resources must be successfully completed and its lending facilities adjusted to meet the current needs of the global community. 
Regional arrangements such as the Chiang Mai Initiative and currency swaps could also complement the global financial safety nets system, and be enhanced by collaborating with the IMF. That said, to be effective, regional arrangements and IMF mechanisms would have to be aligned.
Progress is being made. At the Toronto Summit, the Leaders acknowledged the need for national and regional efforts to deal with capital volatility. And they tasked the Finance Ministers to prepare policy options for their consideration to strengthen global financial safety nets.
Relevant documents

2. Development Issues

"Narrowing the development gap and reducing poverty are integral to our broader objective of achieving strong, sustainable and balanced growth and ensuring a more robust and resilient global economy for all.In this regard, we agree to establish a Working Group on Development and mandate it to elaborate, consistent with the G20’s focus on measures to promote economic growth and resilience, a development agenda and multi-year action plans to be adopted at the Seoul Summit." G20 Communique, June 26 – 27, 2010
Korea is also interested in fostering renewed discussions on development issues, regarding them to be essential to rebalancing the global economy and to ensuring that the Framework can operate as envisioned. 
Broadly interpreted, the definition of global rebalancing encompasses more than macroeconomic imbalances. It also includes addressing gaps in income and development.
The G20 leaders thus collectively recognized that narrowing the development gap and reducing poverty are integral to our broader objectives to achieve strong, sustainable and balanced growth, as well as to ensure a more robust and resilient global economy. In Toronto, the G20 leaders agreed to establish a Working Group on Development. This Working Group was tasked with exploring measures to promote economic growth and resilience, and outlining (i) a development agenda and ii) multi-year action plans to be adopted at the Seoul Summit.
Korea and South Africa will co-chair high-level G20 Development Working Group meetings to facilitate the formulation of multi-year action plans. The ultimate outcomes of these meetings will first be reported to the Sherpas, then to the leaders of the G20 for their consideration and endorsement.
In doing so, Korea will act as a bridge between the advanced, emerging and developing worlds by fully engaging all relevant stakeholders, with a focus on the development needs of low income countries (LICs). Korea will also add new perspectives to the discussions,, drawing on its own recent memories of successful development.
Relevant documents

3. Seoul G20 Business Summit

Governments have taken the lead in the current global recovery; however, the private sector has to take the lead in future economic growth. With this in mind, Korea is organizing a Business Summit, gathering about 100 key corporate Chairmen and CEOs from around the world just prior to the G20 Summit, on November 10-11, 2010.
Key goals of the Business Summit:
While government stimulus packages jump-started the global economic recovery, for the recovery to take hold the private sector must now take the lead. The Business Summit is intended to be a forum for business leaders to exchange views on how to bolster the recovery and put the global economy back on the path to greater growth.
It has been designed as a process, rather than a one-time event. The CEOs will actively engage in the preparations process through working groups which are developing lines of discussion on specific questions drawn from four main agenda topics: trade and investment, finance, green growth, and corporate social responsibility. The business leaders will have an opportunity to discuss their views with some of the G20 leaders just before the Leaders Summit.
Last but not least, organizers of the Seoul Business Summit hope to enhance the sense of shared social responsibility in the context of the global economy. Indeed, the intertwined economic, social and political impacts of the recent financial crisis have highlighted the importance of the private sector understanding its responsibilities in our shared world.
The Business Summit Organizing Committee, officially launched on March 10, 2010, is composed of the Federation of Korean Industries, the Korea International Trade Association, the Korea Chamber of Commerce and Industries, and the Ministry of Knowledge Economy. This committee is tasked with the preparations for the Business Summit. The Presidential Committee for the G20 Summit is closely cooperating with and fully supporting the Business Summit Organizing Committee.
Relevant documents

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