G-20 finance meeting ends with emphasis on fiscal soundness

The G-20 Finance Ministers and Central Bank Governors Meeting in Busan held on Jun. 4 and 5 for the first time in Korea at the Westin Chosun Hotel in Haeundae, Busan concluded with a communiqué that underlined the importance of fiscal soundness.

A total of 40 financial ministers from G-20 nations and governors from central banks participated, as well as governors of international organizations including the International Monetary Fund (IMF), World Bank (WB), Financial Stability Board (FSB) and Organization for Economic Co-operation and Development (OECD).   

The meeting mostly focused on reviewing progress on the agenda items for the coming G-20 Summits scheduled for this year, the first in Toronto, Canada, in late June and the other in Seoul in November.

Reflecting on the aftershocks of the financial market that followed the financial crisis in Europe, the latest meeting stressed international cooperation to enhance fiscal soundness. This came with an understanding that even though the global economy is recovering at a faster-than-expected pace, the variability in the market and other challenging factors still remains. 

Results of Busan G20 meeting

The Busan G20 Finance Ministers and Central Bank Governors' Meeting ended on June 5th with the presentation of the official communiqué after 2 days of discussions. The communiqué emphasized the need to improve fiscal soundness in the wake of the European sovereign debt crisis.

Held over a 2-day period between the 4th and the 5th, 40 finance ministers and central bank governors, as well as the managing director of the IMF participated in the meeting to lay a foundation for further talks at the Toronto Summit to be held 3 weeks later and the Seoul Summit Meeting to be held in November.

Korea in the G-20: A new era of leadership

Korea will host a Group of 20 summit in November 2010 according to a decision reached at the third G-20 meeting held in Pittsburgh, President Lee Myung-bak said at a joint press conference in Pittsburgh on Sep. 25 (local time).

"The decision to have Korea host the November 2010 meeting was reached by the G-20 leaders unanimously, thanks to Korean people’s keen desire for it," Lee said at the conference, which was jointly held with Canadian Prime Minister Stephen Harper.

Canada will host the fourth meeting in June 2010, and Korea will host the fifth. The previous three rounds were held in Washington, D.C. (Nov. 2008), London (Apr. 2009), and Pittsburgh, in that order.

Meanwhile, Sakong Il, a special adviser to the President, who has led the efforts for Korea to host a G-20 meeting, said that Seoul’s hosting was a historic achievement. By hosting the meeting of the world’s most powerful economies, Korea will start playing a crucial role in the international economic spheres, he said.

Peace treaty a long way off

Replacing the armistice with a permanent peace treaty on the Korean Peninsula appears to be further off than ever amid strained inter-Korean ties following the sinking of the Cheonan. 

Marking the 60th year anniversary of the 1950-53 Korean War, relations between the two Koreas have become tattered beyond recognition after a multinational team of investigators accused Pyongyang of sinking the ship on March 26. The incident killed 46 of the sailors aboard. 

“In order to achieve a permanent peace regime, both Koreas will have to take equally effective measures for defusing tension, but that seems unlikely at this point, especially in the aftermath of the Cheonan, which has eroded much of the existing trust between the two Koreas,” said Kim Tae-woo, senior research fellow of the Korea Institute for Defense Analyses.

He also pointed out that it would be impossible for the peace treaty to become realized until the North shows its intention to fully denuclearize. 

“If not, Seoul has too much to lose if it agrees to ease its military vigilance in return for a peace regime,” Kim pointed out.

Conservatives are concerned that as part of a peace treaty, the North may issue requests such as calls for the U.S. troops to pull out. 

Pyongyang has in the past made such demands -- as early as in 1962 --along with other requests such as disassembling the U.N. Command. 

There are currently some 28,500 U.S. troops in South Korea as part of the allied military forces. 

South Korea’s official stance regarding the peace treaty remains that it cannot be negotiated before the nuclear problem is resolved. 

“We will not be making any concessions or be discussing this issue until we gain impetus for completely and irreversibly denuclearizing North Korea,” said one official on the condition of anonymity.

Seoul has said the Sept. 19 agreement signed in 2005 with North Korea and other members of the stalled six-way talks that a peace regime may be discussed in a separate forum after the denuclearization issue is on its way towards resolution. 

“We have not yet discussed what the separate forum will be, but that seems a long way off considering the situation regarding the Cheonan,” said another high-ranking government official who declined to be identified. 

On Jan. 11, Pyongyang’s Foreign Ministry had indicated its willingness to return to the stalemated six-party dialogue if “related parties” put priority on signing a peace treaty.

Officials here related to the issue had accused the North of attempting to divert the attention of the multilateral talks to the peace regime, and away from denuclearization. 

(Yonhap)

[News ANALYSIS] Korea to focus on exit, jobs

Korea is officially starting an exit strategy, the government proclaimed Thursday in its economic management plan for the second half of the year. 

Unwinding crisis-fighting measures in such a way that does not hurt economic recovery is already a tough task to pull off. But the government said that it will also focus on creating jobs and improving the livelihoods of ordinary people, many of whom are still in economic pains. 

“Despite remarkable improvements in economic indicators, ordinary people are yet to feel the recovery in their everyday life,” Finance Minister Yoon Jeung-hyun said. 

“Improving the public’s livelihood is one of our top policy priorities. We will strive to create jobs, by supporting private-sector employment and enhancing public job projects,” he added. 

The government predicted that the country’s gross domestic product will expand 5.8 percent in 2010, significantly higher than its December forecast of 5 percent gain. 

It also raised the job creation target to 300,000 from 250,000. 

As the economy shows a sharp rebound, the government will gradually switch its macroeconomic management back to normal mode, scaling back or terminating economic support programs which were introduced to fight a sharp economic contraction in late 2008. 

In implementing an exit strategy, the key areas of focus are interest rates and fiscal spending. 

Finance Minister Yoon Jeung-hyun addresses a news conference on economic policies for the second half of the year at the government’s complex in Gwacheon on Thursday. Park Hae-mook/The Korea Herald

“As for interest rates, economic growth in the first and second quarters (of the year) should be taken into consideration,” Yoon said. The second-quarter GDP data will be released in late July. 

“Another important factor is how commodity and asset prices will move, which will show the risk of inflation,” he added. 

Korea’s benchmark interest rate has been kept at a record-low level since February 2009. Expectations run high that the central bank will start raising the key rate as early as in August in order to stave off inflation. 

The government plans to scale back public expenditures in the second half in order to secure fiscal soundness after aggressive stimulus spending during the crisis. 

It plans to spend 108 trillion won ($90 billion) during the July-December period, compared to the first-half budget of 163 trillion won.

Korean War retold in two new series

Sixty years have passed since the nightmare that was the Korean War broke out. 

Since the war, films, documentaries and miniseries have done their best to serve as a reminder of the war that forever changed the history of this nation.

“TaeGukGi: Brotherhood of War” (2003) drew millions to the movie theater with its melodramatic story of two siblings whose love for one another went beyond enemy lines. 

“Welcome to Dongmakgol” (2005) portrayed the tragedy of war invading the lives of a village of pure-hearted civilians. 

With such stellar blockbusters having set a precedent, this year’s retellings of the civil-turned-proxy war faces several challenges. 

MBC spent 13 billion won to create “Road No. 1,” a drama that features intense battle scenes from the Korean War. LOGOS FILM

Asians show off traditional cultures

Pyounghwa Plaza in World Cup Park in Mapo-gu was filled with unfamiliar sights on Sunday as people from different Asian countries gathered to introduce their traditional cultures. 

The annual “Asia Culture Festival,” hosted by the Asia Culture Festival Organizing Committee and supported by the Ministry of Culture, Sports and Tourism, and Seoul Foundation for Arts and Culture, was held under the theme “One Asia,” aiming to provide a venue to experience different Asian cultures and thus improve understanding of neighboring countries.

Visitors crowded at the “Asian Village” where booths representing each participating country -- Thailand, Mongolia, Vietnam, Japan, Nepal, China, Philippines, Bangladesh, Indonesia, Sri Lanka, Uzbekistan, Kyrgyzstan, Kyrgyzstan, Myanmar, Malaysia, India and South Korea -- were set up.

“This is a nicely organized festival where we can see different cultures in one place. I am enjoying how we can get first-hand knowledge about different Asian cultures,” said Lubna, a tourist from Pakistan who was learning how to play musical instruments at the Nepal booth. 

Visitors look around the Japanese booth at the Asia Culture Festival on Sunday. Lee Sang-sub/The Korea Herald