(Yonhap Interview) Financial system reform to top G-20 summit agenda: Russian envoy

By Kim Soo-yeon
SEOUL, Feb. 16 (Yonhap) -- The G-20 summit scheduled for November in Seoul will
serve as a key forum for discussions on how to build a firmer footing for the
global financial system in preparation for the post-crisis era, the top Russian
envoy here said Tuesday.

"It is meaningful that South Korea will be the first Asian country to hold the
G-20 summit," Konstantin Vnukov, Russia's Ambassador to South Korea, said in an
interview with Yonhap News Agency.
"One of the main issues for the Seoul meeting will be how to further stabilize
the global financial system ... Russia will cooperate closely with Korean
partners in Seoul's preparation for the summit as what is important is to enhance
cooperation in reforming the global financial system."
South Korea was chosen in September last year as the venue for this year's summit
of the world's 20 advanced and developing countries, which was first launched in
late 2008 in response to the global financial turmoil sparked by the collapse of
Lehman Brothers.
The forum has since been held three times, while additional summits are scheduled
to be held in Canada and South Korea in June and November this year,
respectively.
The global financial rout highlighted the critical role that emerging countries
including South Korea and China, play in reviving the battered global economy.
The G-20 member nations' combined population makes up an estimated two-thirds of
the world's total population with their gross domestic product comprising 85
percent of the global economy.
Vnukov described the G-20 meeting as an "utterly new mechanism" in response to
the global financial crisis, which raised the necessity of broader cooperation
between countries in tackling global issues than that offered under the G-8
framework.
"I believe the G-20 will serve as a very important mechanism in the process of
creating collective leadership," he said, adding that Russia has supported the
idea of giving emerging countries a greater voice in the International Monetary
Fund and the World Bank.
"But just discussing global issues under the G-20 framework is not sufficient.
(In the Seoul meeting), 20 advanced and developing economies should reach a
concrete agreement and make efforts to put such consensus into action."
This year's summit is expected to come under the spotlight for its discussions
on preparing for the post-crisis era, given that debate has already heated up
over when and how to roll back emergency steps taken to fight the global
economic recession.
In South Korea, the issue has taken on particular intensity as its economy is
recovering at a faster-than-expected pace.
Hit by the financial crisis, the Korean economy, Asia's fourth-largest, tumbled a
whopping 5.1 percent on-quarter in the fourth quarter of 2008. But it avoided a
yearly contraction last year on massive fiscal spending and rate cuts by
expanding 0.2 percent. The government put the growth forecast at 5 percent this
year.
In September 2009 in Pittsburgh, G-20 leaders agreed that they would keep their
expansionary policies until an economic recovery is assured. But some argue that
the timing of carrying out so-called exit strategies will inevitably differ
between countries as the pace of economic recovery varies from one nation to the
next.
The Russian envoy declined to comment on the proper timing of an exit from
emergency steps, but noted that how to roll back supportive measures needs to be
discussed further.
"I think that an exit strategy at the global level needs to be discussed first
and should be fleshed out later," Vnukov said.
sooyeon@yna.co.kr
(END)

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