(LEAD) S. Korean leader vows 'outreach' to non-G-20 members

(LEAD) Lee-G-20 vision


(ATTN: UPDATES throughout with more comments and details; CHANGES lead)
By Lee Chi-dong

DAVOS, Switzerland, Jan. 28 (Yonhap) -- South Korean President Lee Myung-bak said
Thursday that the G-20 summit scheduled for November in Seoul will explore ways
to set up a "Global Financial Safety Net" to shield emerging economies from
abrupt flows of international capital.
Delivering a special address to business leaders and top policymakers at the
Davos Forum in Switzerland, Lee pointed out the 2008-2009 financial crisis
demonstrated the vulnerability of developing countries to sudden reversals in the
flow of global capital and stressed preventive measures are urgently required.
As the leader of South Korea, which chairs November's G-20 summit, Lee also
promised to step up efforts to "reach out" to non-members of what has become the
premier forum for international economic policy cooperation in an attempt to
narrow the development gap.
"I cannot emphasize enough the importance of ensuring that the fruits of strong
and sustainable growth are shared evenly among all countries, including the
poorest," he said in the speech at the annual meeting of World Economic Forum.
Lee used most of the 15-minute speech, titled "Seoul G-20: Summit Priorities and
Challenges," to publicize his vision for the G-20 and outline main agenda items
to be detailed at the November session in Seoul.
"At the G-20 Summit in November, we will place on the agenda the establishment of
what we call a 'Global Financial Safety Net' that can put in place a global
mechanism for addressing such sudden reversals," he said.
The new arrangement seeks to build on the successful implementation of bilateral
arrangements between central banks for dealing with sudden reversals of capital
flows, he added.
Lee, formerly a business CEO himself, said the establishment of such a financial
safety net will greatly contribute to the balanced growth of the global economy,
now stricken by sharp differences in the level of development between advanced,
emerging and poorer countries.
He also expressed South Korea's intent to play a bigger role in resolving the
chronic problem. South Korea is the first Asian and non-G-8 member country to
chair and host the G-20 summit.
"We will consult our G-20 partners in placing development issues firmly on the
agenda for the Seoul G-20 summit," he said. "We will not limit our discussions to
the G-20 member countries, but instead will reach out to partners outside the
G-20. We will conduct extensive outreach efforts through consultations with the
United Nations and regional bodies."
Lee said South Korea will take advantage of its experience and expertise with
emerging and developing countries in formulating strategies for development.
The president announced a plan for the launch of a "Business Summit" in Seoul
just ahead of the G-20 summit to encourage the private sector, especially the
business community, to play a bigger role in maintaining momentum for a recovery
spurred by government-led stimulus measures.
He reiterated his cautious approach toward so-called exit strategies for rolling
back expansionary fiscal and monetary policies and spoke out against
protectionism.
"In addition, an important task of the G-20 is to follow up on the initiatives
taken at previous summits on reform of financial regulation toward a more
resilient global financial system and the reform of international financial
institutions such as the IMF and World Bank," he said, referring to earlier
meetings in Washington, London and Pittsburgh. "In particular, concluding the
Doha Development Agenda (DDA) before the end of the year should be given the
highest priority," he added.
Lee noted the G-20's pivotal role in pulling the world out of the recession,
saying it makes him feel more responsibility as the president of the country that
will chair and host this year's summit.
"It is time for the G-20 to set the post-crisis agenda, and to build the platform
that will ensure the sustained and balanced growth of the world economy in the
months and years ahead," he said. "The November summit of the G-20 in Seoul can
be seen as the first major test of this new global forum as it attempts to
establish itself as a regular feature of the framework for international economic
cooperation."
This year's Davos Forum, the 40th of its kind, focuses on ways to avoid a
recurrence of the global economic crisis and cope with new global challenges
under the theme of "Improve the State of the World: Rethink, Redesign, Rebuild."
Lee attended the conference in 2006 as Seoul Mayor but his presence this year
marks the first time that a Korean president has attended the event. Lee's
decision to join the conference is in line with his "Global Korea" campaign which
aims to bring Korea closer to the center of the global stage.
After the address, Lee held a separate meeting with Gerhard Cromme, chairman of
Siemens. He was also to hold a series of summits with his Canadian, Swiss,
Spanish and Jordanian counterparts later in the day. Canada will host the fourth
G-20 summit in June.
In his own keynote speech at the Davos Forum, meanwhile, French President Nicolas
Sarkozy called for more international cooperation to tackle the adverse effects
of capitalism and globalization.
"From the moment we accepted the idea that the market was always right and that
no other opposing factors need be taken into account, globalization skidded out
of control," he argued.
He also attacked such moral hazards as bankers taking excessive bonuses.
"There are remuneration packages that will no longer be tolerated because they
bear no relationship to merit," he said, adding it is "morally indefensible" for
those who destroy jobs and wealth to earn more money.
lcd@yna.co.kr
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