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The G20 Seoul Summit and beyond
Lee Myung-bak, president, Republic of Korea
The world’s new economic grouping of nations continues its efforts to create greater financial stability, to reflect the changing balance of industrial and financial power and to be open to the needs of peoples and nations outside its membership
From "The 2011 G8 Deauville Summit: New World, New Ideas." edited by John Kirton and Madeline Koch
Published by Newsdesk Media Group and the G8 Research Group, 2011
To download a low-resolution pdf, click here
When the G20 leaders first met in Washington DC in November 2008, no one was sure about the outcome of the summit and whether they would meet again. As the leaders recognised the need for internationally
coordinated policies to tackle the worst financial crisis since the Great Depression, they agreed to meet again in less than six months’ time in London. The G20 thus took the lead in helping the global community avert another depression on the scale of 1929.
When Korea was tasked with chairing the 2010 G20, we had two clear objectives from the outset. The first was to faithfully follow through on previous commitments to show the world that the G20 can deliver not just at the height of the crisis but even when the worst of the crisis is behind us. The second was to add new agenda items that would enhance the legitimacy of the G20 as an informal global steering committee. About two-thirds of the agenda involved implementing the previous commitments and the remaining third pertained to new agenda items for Seoul.
I was convinced that the Seoul Summit was a litmus test for the G20, not just as a crisis committee but also as a legitimate and effective global steering committee. Against this backdrop, the Korean government established the Presidential Committee for the G20 Summit to take charge of the preparations for the Seoul Summit. It consisted of all relevant cabinet members, including the finance minister,
the foreign affairs minister, the culture and tourism minister, the public administration and security minister and the mayor of Seoul, in addition to many prominent representatives from the private sector. I myself frequently presided over the committee meetings and received regular reports from the committee. As the Seoul summit approached, I convened meetings daily.
Korea, of course, worked very closely with the other G20 members as well as multilateral institutions and global experts throughout the course of preparing for the Seoul Summit. Together, we were able to follow through on most of the previous commitments.
To be specific, there were four issues on which to focus. The first was macroeconomic coordination in the form of implementing the Framework for Strong, Sustainable and Balanced Growth. After a rather prolonged process, the leaders agreed on the principles of indicative guidelines and the timeline of working out details. Second was the quota and governance reform of the International Monetary Fund (IMF). Many sceptics predicted the G20 members would fail to reach an agreement on IMF reform. Certainly, the process was not plain sailing by any standard. But in the end, we all gave a little and successfully adjusted the IMF quota to more than what had been promised at the Pittsburgh summit in 2009. It proved to be the largest quota change in the 66 years of IMF history. Our European colleagues made a concession to shift two of their seats on the executive board to emerging economies.
The third issue concerned financial regulatory reform. The specific commitments related to Basel III, the accord that had been proposed by the Basel Committee on Banking Supervision before the leaders met in Seoul. The fourth issue included trade and other matters. Although the leaders were unable to agree on the specifics of the Doha Round of trade negotiations, they extended their standstill commitment by three more years until 2013 and agreed to continue to work diligently to take advantage of a small window of opportunity in 2011 for the trade talks.
Despite the achievements of the G20, we were fully aware that, in order to turn it into a truly legitimate and effective global steering committee, we must pay due attention to the concerns of the 173 members of the United Nations that are not members of the G20, and that come mostly from the emerging and developing world. Korea thus worked closely with its G20 partners to put development on the agenda in addition to strengthening the global financial safety net.
The G20 leaders adopted the Seoul Development Consensus for shared growth with a multi-year action plan. I commend the leadership of the French presidency on following through on the action plan in close collaboration with multilateral institutions. Regarding strengthening the financial safety net, the first stage of the task was completed, in cooperation with the IMF, by the introduction of flexible credit lines, precautionary credit lines and multi-country flexible credit lines. The remaining second part relates to linking the global financial safety net with regional financial cooperative arrangements.
Overall, I am satisfied with the major outcomes of Seoul. This summit was able to deliver what had been previously promised and to add new, relevant issues to the G20 agenda. With these achievements, the G20 took a step further toward solidifying its position as a credible, legitimate and effective global steering committee.
Nonetheless, we must adopt as our collective priority the G20’s continued show of credibility and effectiveness, even in the post-crisis era. As I have emphasised before, we should work harder not to disappoint the global community. The immediate task for the G20 this year is to make its Cannes Summit in November another success. I call upon all my G20 colleagues to cooperate with this year’s French presidency as much as we can towards this end.
For the continued success of the G20, I suggest that we give some serious thought to the institutionalisation of the G20 summit process. One should not forget that various options have been already proposed by Korea and the United Kingdom. For example, a better-structured troika system, involving the past, present and future G20 presidencies, would be a realistic option.
Lastly, let me reiterate my thinking on the relationship between the G20 and the G8. The division of work between the two groups should be respected. The G20 as the premier forum for international economic cooperation must obviously focus its attention on economic matters, while the G8 must focus on non-economic issues – such as peace and security – and international political developments. The two forums should work together for maximum synergy, where possible, for instance in the field of development and climate change. I have no doubt that the French presidency of the G20 and the G8 will show the world a balance can be struck between the two.
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