Full text of President Lee's special address at Davos Forum

Lee special address-Davos Forum-full text


DAVOS, Switzerland, Jan. 28 (Yonhap) -- The following is the full text of South
Korean President Lee Myung-bak's special address delivered at the Davos Forum in
Switzerland Thursday with the title "Seoul G-20 Summit: Priorities and
Challenges."

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Good morning. It is a great privilege to address such a distinguished audience of
world leaders at the World Economic Forum. I am grateful to Professor Schwab and
the organizers for giving me an opportunity to share my thoughts on the
forthcoming G20 Summit to be held in Seoul in November of this year.
Before starting on the main address, I would like to convey the heart-felt
sympathies of all Koreans to the victims and survivors of the recent earthquake
in Haiti.
As an immediate measure, the Korean government is actively engaged in the flow of
relief in concert with non-government bodies. Together with other summit
colleagues in the G20, I will work on support and long-term reconstruction.
Ladies and Gentlemen,
We have just been through a very difficult time for the world economy. This time
last year, you may recall that there was much pessimistic commentary on the
possibility of an economic slump that would push the world into another Great
Depression. Fortunately, the picture now is somewhat brighter than those worst
predictions. The world economy has gone through a period of stabilization and is
now showing some tentative signs of recovery.
I believe that much of the credit for the better than expected outcome for the
world economy should be given to the unprecedented level of policy cooperation
among the advanced and emerging countries of the G20.
The initial resolve shown in the first G20 Summit in Washington in November 2008
was followed up with swift and bold coordinated policy responses in successive
summits in London and Pittsburgh. It was thanks to such bold action that the
world economy pulled out from its free fall and managed to enter a period of
stabilization.
I do not doubt that the newfound status of the G20 as the premier forum for
international economic cooperation owes much to its proven accomplishments to
date. As the leader of the country that will chair the G20 this year, I am keenly
aware of the weight of responsibility in taking on such an important role. It is
an enormous privilege to chair the G20. Together with all Koreans, I await this
year's tasks with anticipation. I thank my fellow G20 leaders for their vote of
confidence in Korea's ability to play this pivotal role.
The G20 this year will continue its efforts to overcome the consequences of the
global financial crisis and to redouble its efforts in coordinating policies
toward recovery. In addition, it is time for the G20 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.
The three previous G20 Summits began the search for reforms toward a more
resilient financial system aimed at preventing a repeat of the recent financial
crisis. However, the most immediate goal was to orchestrate the policy response
to the global financial crisis and the accompanying severe economic downturn. As
mentioned already, I believe it was thanks to such coordinated effort that the
world economy managed to achieve its recent stabilization.
The burden of the policy response so far has fallen on public sector intervention
through unprecedented fiscal and monetary stimulus. As the global economy finds
its feet again, each G20 member country will need to consider carefully how it
will implement its exit strategy taking account of local economic conditions.
This year, one of the tasks of the G20 will be to coordinate the transition to a
more normal policy stance once the appropriate conditions are in place. As we
make this transition toward a more normal policy stance, the focus of the G20
must shift toward putting in place the longer-term framework for policy
coordination that will ensure the sustainable and balanced growth of the world
economy.
In particular, as chair of the G20, we will devote our energies to achieving
consensus across G20 member countries for the successful implementation of the
Framework for Strong, Sustainable and Balanced Growth, agreed at the Pittsburgh
summit last year.
In addition, an important task of the G20 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. Concerning financial regulation,
important issues include finding ways to counter the procyclical nature of the
financial system, as well as the problem of institutions that are too-big-to-fail
that has received added impetus recently. We will need to follow through on the
progress achieved to date as well as find solutions for unresolved issues.
Having gone through the recent financial crisis, we have been reminded of some of
the weaknesses of the current system of international crisis prevention and early
warning led by the international financial institutions (IFIs).
As we approach the Seoul summit, we will devote our energies toward reaching
agreement on a stronger and more effective early warning and surveillance
mechanism at the international level.
In order for the International Monetary Fund and other IFIs to fulfill their
goals, it is important that they command broad support. It goes without saying
that such broad support can only be gained through the accountability and
legitimacy that comes to an institution with a governance structure that is truly
representative of its members.
The importance of governance and representation have been affirmed by the G20
leaders in previous summits, and our goal in the November summit will be to
translate the principles into concrete actions.
I must not neglect to mention one more important item for the Seoul Summit, which
is trade. Past G20 summits have played a pivotal role in resisting protectionist
pressures, and we need to reaffirm the importance of continuing our stance
against protectionism. In particular, concluding the Doha Development Agenda
(DDA) before the end of the year should be given the highest priority.
The recent financial crisis and the economic downturn have increased the
pressures for protectionism. We should be on our guard against protectionism. But
at the same time, we should be mindful of the side-effects of globalization that
feed the antipathy toward greater global integration. We should stand ready to
address legitimate concerns.
To this end, a strategy of inclusive growth that permits a role for a strong
social safety net should be an important companion to globalization.
Looking back, it would be fair to say that the impetus for the reform of the
financial system has come from the experience of the advanced countries which was
the origin of the recent financial crisis. Addressing the weaknesses in the
existing framework for financial regulation is important for all of us, since the
problems in one region have global repercussions. It is important to learn from
recent events so as not to repeat our mistakes.
However, we should not forget that there are many pressing policy and reform
issues that are of paramount importance to developing countries. We will add
these additional issues to the agenda for discussion at the G20 Seoul Summit in
November. As part of our efforts to heighten awareness and find common ground, we
are planning an extensive diary of events with participation from experts and
policy makers.
At the November Seoul Summit, we will place development issues firmly on the
agenda, and work toward finding agreement. As you know, Korea is a member of the
OECD grouping of developed countries, but it is also a country with first-hand
experience of economic development within living memory. Korea also has
experience of the devastating impact of a financial crisis and the efforts
necessary to secure a robust recovery. As a country that has made the transition
from one that receives aid to one that gives aid, we understand well what is
involved in making aid work.
For all these reasons, there is a great deal of significance in the fact that
Korea is the first country from outside the ranks of the G8 group of advanced
countries to chair the G20. I believe that Korea is well-placed to share its
experiences and expertise with emerging and developing countries on strategies
for development and on policies for successful recovery from financial crises.
In order to achieve balanced and sustainable growth, I believe more is necessary
than just achieving balance in a narrowly macroeconomic sense. A broader notion
of balance is appropriate, including closing the development gap between advanced
and developing countries. Such a task should be regarded as being an integral
part of the mission of the G20 in achieving balanced growth of the world economy.

To this end, we will consult our G20 partners in placing development issues
firmly on the agenda for the Seoul G20 summit. We have seen with the recent
financial crisis the potentially devastating impact of sudden reversals of
international capital flows on emerging and developing economies. At the G20
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.
The new arrangement seeks to build on the successful implementation of bilateral
arrangements between central banks for dealing with sudden reversals of capital
flows, and will be complementary with them. We believe that the establishment of
such a financial safety net will contribute significantly toward balanced growth
of the global economy.
I cannot emphasize enough the importance of ensuring that the fruits of the
strong and sustainable growth are shared evenly among all countries, including
the poorest.
To this end, the G20 must redouble its efforts to look beyond its member
countries and take on the responsibility of considering a larger constituency of
nations. As part of our consultation process, we will not limit our discussions
to the G20 member countries, but instead will reach out to partners outside the
G20. We will conduct extensive outreach efforts through consultations with the
United Nations and regional bodies.
Our aim will be to ensure that the discussions are as inclusive as possible.
As well as these outreach efforts to countries outside the G20, we will also
devote our energies toward giving full scope for the impetus for recovery to come
from the private sector business community, taking the baton from the government
sector in leading the recovery effort. As part of the initiative to highlight the
role of the business community, we are currently planning the launch of a
Business Summit in Seoul timed to coincide with the November G20 Summit. Active
participation from the business community will reinforce the positive outcome
from the official summit itself, and highlight the vitality that can only be
provided by the private sector to further enhance the G20 process as an effective
forum for promoting global prosperity.
The world economy has stabilized through the concerted action of governments and
is showing signs of recovery. But private sector investment and job creation are
still far from robust. For an enduring recovery, the revitalized growth of
private investment will need to follow. As part of the efforts to encourage
greater role for the private sector, priority should be given to ways of
promoting job creation and investment.
Fostering job creation and investment are long-term tasks that thrive in a
business-friendly environment. We should find ways to reward the entrepreneurial
spirit and allow creativity and initiative to play their part the creation of
jobs and wealth. We should always bear in mind that the potential long-term
sustainable growth of the world economy is determined in large part by such
incentives to create jobs and wealth.
The recent financial crisis has reminded us how closely our national economies
are integrated in the global economy. It is not only the events in our near
neighbors that have an impact on our lives. The degree of integration is now such
that we saw how events on the other side of the world can impact our daily lives.
In this respect, the G20 is a very timely forum. By bringing together not only
the leading advanced economies but also the major emerging economies, the G20 has
a size and scope to tackle global issues. In addition, it is time for the G20 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.
I can promise you that we will put in our best efforts toward the successful
conclusion of the G20 Summit.
In closing, let me reiterate the importance of the longer-term nature of a
sustained framework for international economic cooperation. Although the
financial crisis brought us together and forged an effective coordinated crisis
response, it is now incumbent on us to translate the momentum we have generated
toward establishing a forum that can play a genuine global leadership role for
longer term issues. To this end, we should not lower our guard or allow
complacency to dull our sense of mission. One of my Summit colleagues remarked at
a previous meeting that we "should not waste a crisis". I fully share this
sentiment, and will work toward maintaining the momentum for genuine reform. We
should not forget the importance of our continued sustained effort in achieving
sustainable and balance growth.
I ask you to join me in this endeavor.
Thank you.
(END)