Lee proposes 'counter-cyclical' policy to fight economic crisis

(ATTN: UPDATES with Lee's address at APEC summit opening in first 5 paras; CHANGES
headline)
LIMA, Nov. 22 (Yonhap) -- South Korean President Lee Myung-bak on Saturday urged
Asia-Pacific countries to reject trade protectionism and proactively embrace
"counter-cyclical" policies in order to avert a prolonged slump in the real
economy worldwide.
In a keynote speech at the opening session of the Asia-Pacific Economic
Cooperation (APEC) summit in Peru, Lee also urged Pacific Rim nations to join his
campaign to spurn the creation of new trade barriers and aggressively expand
fiscal expenditures to increase job opportunities and social safety nets.
"APEC member states, which account for over half of the global economy, have to
actively enforce counter-cyclical policies to fight the worldwide economic
crisis," Lee said, referring to a government policy aimed at reducing or
neutralizing protectionist measures and encouraging spending during economic
downturns.
"Economic growth is stagnant worldwide due to loss of confidence. Under these
circumstances, maintenance of international policy coordination is very
critical... Countries worldwide have to expand fiscal spending and join
international efforts to prevent the spread of trade protectionism," said Lee.
The president then called 21 APEC member nations to spearhead efforts to swiftly
conclude deadlocked negotiations over the WTO Doha Development Agenda on global
trade liberalization.
In a separate speech at a summit of Asia-Pacific business leaders earlier on
Saturday, Lee asked the regional nations to enforce "unprecedented measures" in
the face of an "unprecedented" economic crisis.
Specifically, he called on the world's major economies to expand the supply of
foreign currency liquidity to emerging economies, as part of an international
cooperative effort to fight the ongoing financial crisis.
"Countries worldwide should strive to stimulate their economies through fiscal
expansion and tax reduction, pay extraordinary attention to small and
medium-sized enterprises and boost their policy effectiveness through closer
regional and international cooperation," said Lee.
"Possible negative economic growth in the U.S., Europe, Japan and other advanced
economies next year could have a devastating impact on the entire world. Should
the slump in the real economy be protracted, companies will go bankrupt,
countless jobs will be lost, and poor nations and poor people will suffer the
most damage."
Lee then urged advanced economies to make all possible efforts to avert negative
growth in 2009, while also calling for greater investment in clean energies to
fight climate change.
"Individual countries should ensure a stable flow of foreign currency liquidity
and provide their business sectors with sufficient foreign currencies. Such
countermeasures should be taken in a preemptive, sufficient and decisive manner,"
said the president.
U.S. President George W. Bush and other regional leaders echoed Lee's
anti-protectionist views in their respective addresses, seeking to build on last
weekend's Group of 20 summit in Washington, which proposed that nations commit to
not erecting new trade barriers over the next 12 months.
ycm@yna.co.kr
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