S. Korea asked to play larger role in global financial system

(ATTN: CHANGES headline, UPDATES throughout with participants' comments)
By Lee Chi-dong
SEOUL, Oct. 30 (Yonhap) -- Global leaders said in a forum here Thursday that
South Korea should be a role model for countries hoping to follow in its
footsteps of rapid democratization and economic growth, but that it should step
up efforts to play a greater role in the international community.
They urged South Korea to pursue closer cooperation with other nations in coping
with deepening financial woes and bringing peace to the Korean Peninsula.
"South Korea emerged only after the (1950-53) war and therefore its experience is
quite new. I am quite sure Koreans remember the difficulties they had faced in
developing their country," former Malaysian Prime Minister Mahathir bin Mohamad
said at the World Leaders Forum.
"I think South Korea can still play this role to provide the region with a model.
I am quite sure even China must have learned something from Korea's development."
The one-day forum, hosted by the South Korean government in commemoration of its
60th founding anniversary, brought together scores of influential world leaders
and prominent academics, including 15 former heads of state.
Under the theme of "Republic of Korea: 60 and Beyond," the forum comprises three
sessions -- Korea at 60: searching for a global Korea, World financial crisis and
conditions for new growth, and New national development paradigm: green growth.
Francis Fukuyama of Johns Hopkins University called South Korea's success a minor
miracle, saying while many have talked about Korea's economic miracle, there has
been a political miracle as well.
"Korea has gone from a dictatorship to a functioning democracy in a single
generation," he said, noting the country's difficult international position,
wedged between Japan, China, and Russia while the country remains divided in two
as an early victim of the Cold War.
"South Korea, however, can step out as a much more active participant in global
organizations, although it obviously cannot take the initiative to reshape the
global architecture as a relatively small power," he said.
Fukuyama, author of a 1992 book on neo-liberal ideology titled "The End of
History and the Last Man," noted South Korean President Lee Myung-bak's planned
participation in the G-20 global summit in Washington next month.
"The old framework of G-7 or G-8 is not reflective of the natural balance of
economic forces today," he said. "The Bretton Woods institutions (IMF and World
Bank) have been largely unable to deal with current global economic issues."
The statements came in response to President Lee's keynote speech at the opening
of the forum, during which he repeated his calls for a revamped international
financial system.
"At the financial crisis summit scheduled in Washington on Nov. 15, I will commit
myself to promoting international cooperation on measures to reinvigorate the
world economy, including the reorganization of the international financial
system," the president said. "I will tell the world leaders that a new financial
system should be grounded in a culture of sharing and cooperation where emerging
economies as well as advanced nations should be active players."
Lee also laid out his government's efforts to stabilize the financial market.
"The Korean government will remove market uncertainty by constantly injecting
ample liquidity both in Korean won and in foreign currencies through the Bank of
Korea," he said. "The government has decided to expand fiscal spending to boost
sluggish domestic demand and will scale up investment in social overhead capital
and embark on public projects earlier than scheduled."
Former U.S. Defense Secretary William S. Cohen called on South Korea to continue
such efforts to weather the financial crisis and bring lasting peace to the
peninsula.
"We learned that Korea's stability is inseparable from stability of the whole
region," he said.
Former Indonesian President Bacharuddin Jusuf Habibie agreed, saying that to
promote peace in the Korean Peninsula, "it is important that the state of war
which continues to prevail here be formally ended. All the parties in the Korean
War," he continued, "need to sit down and draft a peace treaty which would be
acceptable and supported by all concerns."
He said that given the political sensitivities of the unification issue and
learning from the ASEAN experience, bilateral interaction between the two Koreas
should be de-politicized as much as possible.
Japan's former prime minister, Yoshiro Mori, emphasized the importance of
cooperation between South Korea and Japan, the two main democracies in the
region, in resolving the North Korean nuclear issue.
"Although the six-way talks have produced some achievements, such as the
disabling of the Yongbyon reactor, the denuclearization process is still at an
infant stage," he said. "There will be a number of challenges to move forward to
the actual dismantlement of North Korea's nuclear facilities."