Obama hopes for S. Korea's leadership role in global efforts to combat recession

By Hwang Doo-hyong
WASHINGTON, Nov. 12 (Yonhap) -- U.S. President Barack Obama expressed hope
Thursday for South Korea's leading role in the global efforts to overcome the
worst recession in decades, saying South Korea's hosting of G-20 summit next
November exemplifies its rags-to-riches record.

"South Korea's emergence as host of the G-20 leaders meeting next year is the
latest evidence that South Korea is playing an important leadership role on the
world stage," Obama said in an exclusive written interview with Yonhap News
Agency. "I am pleased that South Korea has agreed to host the G-20 meeting next
year and the U.S. will help support their efforts to ensure that the meeting is a
success."
Obama is said to be one of the strongest supporters of South Korea's hosting of
the G-20 and its annualization, although Japan, which unsuccessfully lobbied to
host the second or third G-20 summit this year, and a few advanced economies
dislike the idea of the G-20 replacing the G-8.
South Korea was chosen as the host of the fifth G-20 summit at the third summit
in Pittsburgh in September amid talks of a shift of power from the world's
richest countries to China and other emerging economies, as reflected by its
eclipse of the G-8 as the primary forum for global economic cooperation.
The fourth G-20 summit will be held in Canada in June on the sidelines of the G-8
forum, and Canadian Prime Minister Stephen Harper has said that the Canada G-8
will focus on security issues.
Obama said that South Korea's success serves as a "prime example" for
still-developing economies, and its hosting of the G-20 next year is
demonstrative of the global leadership role that it is undertaking.
"South Korea's hosting of the G-20 next year is also a prime example of the
economic success it has had in a relatively short period of time and its movement
into the ranks of the world's leading economies," he said.
The U.S. president also lauded the role of South Korean President Lee Myung-bak
in South Korea's fast economic recovery.
"President Lee has done a superb job steering South Korea's economy through the
economic downturn and now on an upward trajectory, and I am looking forward to
his continued strong leadership in the Asia-Pacific region on the economic policy
front," Obama said.
Lee has forecast a 4-percent growth next year, with the world's 13th biggest
economy having expanded 2.9 percent in the July-September period over the
previous quarter, the fastest gain in more than seven years. Growth was 2.6
percent in the second quarter.
After early quarterly losses, the South Korean government forecast an upwardly
revised near-zero percent growth for all of this year.
South Korea's stock value and foreign exchange reserves have also recovered to
pre-recession levels, with the reserves surpassing a record US$264 billion,
helped by a burgeoning trade surplus. The Seoul bourse is also approaching the
1,600-point mark, boosted by foreign investors.
Experts believe South Korea's hosting of the fifth G-20 summit will officially
terminate decades of dominance by the rich G-8 nations, and South Korea is being
given a major role in this new order as leaders discuss how to move into the
post-financial crisis era.
The G-20 summit is an extension of the G-20 finance ministers' meeting
established in 1999 to tackle the Asian financial crisis.
Then-U.S. President George W. Bush convened the G-20 summit in November last year
amid calls for reform of the Bretton Woods institutions launched after World War
II and buttressed by the International Monetary Fund and the World Bank, saying,
"They were based on an economic order of 1944."
The IMF has been under criticism for its governance and failure to warn of the
economic crisis and then to properly deal with it.
The 20 leaders in September agreed to transfer at least 5 percent of the IMF
equities and 3 percent of the World Bank quota to developing nations by early
2011 to better represent the economic strength of China and other developing
nations.
China's foreign exchange reserves have surpassed $2 trillion, with a large
portion of those reserves being U.S. Treasury bonds -- a factor that could
ultimately destabilize the dollar and the credibility of the U.S., which holds
huge trade and budget deficits.
China's output is expected to surpass Japan's by the end of this year to become
the world's second biggest economy after the U.S -- and to outperform the U.S.
within decades.
A senior White House official, asking anonymity, said that Obama will discuss
South Korea's global leadership with Lee in Seoul.
"I think that the story of Korea for us is one of dynamic transformation from a
local Korea to a global Korea," he said. "We will talk not just about Korea but
we will talk about world problems, transnational problems and how the U.S. and
the Republic of Korea can begin making a difference."
The Obama aide took note of the strong personal relationship Obama has maintained
with Lee.
"President Obama and President Lee have established a very strong working
relationship," the official said. "President Lee was given an extraordinarily
high profile and extensive profile when he visited Washington in June and I think
that's a reflection of the quality and importance of the bilateral relationship."
hdh@yna.co.kr
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