Korea advised to speak up at G20 Seoul Summit

A noted American lawyer suggests Korea should speak up at the G20 Seoul Summit to use the global gathering as leverage to increase its influence in the global community.

Jeffrey Jones, former
AMCHAM Korea chairman

By Kim Jae-kyoung

A noted American lawyer suggests Korea should speak up at the G20 Seoul Summit to use the global gathering as leverage to increase its influence in the global community.

The suggestion comes as the government has stressed that Korea will do its best to play a role of mediator at the G20 Seoul Summit slated for Nov. 11 and 12, representing the voices of emerging countries.

In an interview with The Korea Times, former AMCHAM Korea Chairman Jeffrey Jones said that Korea should find ways to maintain a balance between expressing its opinion and representing other voices in the G20 process.

“I believe those efforts (to represent other voices) are noble and are important particularly for those not at the table, but trying to represent too many voices can

weaken Korea’s own voice and influence, so in this too, the government should be moderate,” he said.

Jones, who is a senior lawyer at Kim & Chang, one of the largest law firms in Korea, pointed out that Korea is in a unique position at this summit for a variety of important reasons.

“First, Korea has led the advanced countries in economic growth this past year achieving remarkable growth numbers in the first quarter of the year in excess of 7 percent, unheard of for any other market. Others will want to emulate this growth and will look to Korea for solutions,” he said.

“Secondly, 10 years ago during the Asian financial crisis, Korea instituted extensive reform and restructuring that is the basis of the continued growth today. Korea made difficult choices that were painful, but resulted in a restructured economy that is the envy of many,” he added. “Thus, there is great expectation that the Seoul summit will provide the practical solutions needed with respect to reform and restructuring of the world’s economies.”

Jones, who has lived in Korea since 1980, said that the Seoul summit is different from its predecessors held in Washington, London and Toronto, in many aspects.

“The expectations are very high for the summit with the hope that actual workable solutions will be agreed upon by the G20 that will establish a framework to control risk, but ensure sustainable and balanced development,” he said.

“Assuming an agreement can be achieved along the lines expected, the Seoul summit will have far reaching implications for the global economy far into the future,” he added.

The veteran lawyer, who is known as “a Korean with blue eyes” because of his special interest and affection for Korea, stressed that President Lee Myung-bak and those working on the G20 representing Korea needs to persuade other influential members of the G20 such as France, Germany, the U.K. and the U.S. not to go too far in regulatory reform.

“Regulatory reform should be a balance between growth and acceptable risk and not err on the side of excessive reform to eliminate risk from the system which will surely eliminate growth as well,” he said.

“Much of the financial reform that has been touted thus far tends to go much too far to avert risk and strengthen capital thereby restricting growth beyond that which is necessary to maintain healthy and sustainable growth,” he said.

Jones recommended three key tasks for Korea to emerge as a real global force in the global community following the G20 Seoul Summit.

“First, adopt an appropriate labor policy that will balance labor market flexibility and protection of workers’ rights, and maximizes the requisite safety net. Secondly, undertake an effort to eliminate criminal liability for unintentional violations of economic related rules and regulations across the broad spectrum of Korean laws,” he said.

“Finally, adopt appropriate policies to improve investment in the tourism industry that will result in the creation of destination resorts, mega entertainment zones and similar facilities to attract 25 million Chinese and Japanese tourists annually and result in hundreds of thousands of jobs for Korea’s youth similar to that which Singapore has recently adopted,” he added.

President Lee and his administration expect the forthcoming summit to help turn the “Korea Discount” into the “Korea Premium,” but Jones said that the government should make additional efforts to address the issue.

“The gathering will help, but the best way to eliminate the Korea discount is to create a regulatory environment that has greater transparency, less need for government interpretation and discretion and the commitment to enforce laws and regulations on a consistent basis,” he said.

“The local stock market still suffers from a discount in comparison to real value which is a function of many factors to include monetary policy, the continued existence of foreign exchange restrictions and reporting requirements, tax enforcement policy and inconsistent enforcement of rules,” he added. “Korea will have to take steps to purge many of these problems to eliminate the discount on the stock market.”