Strategy and Finance Minister
Kang Man-soo |
By Lee Hyo-sik
Staff Reporter
South Korea's top economic policymaker said the nation will play a leading role in promoting and realizing the economic integration of Northeast Asia. The country will upgrade its international profile and publicize its commitment to the global economic advancement and poverty reduction through the 8th ASEM Finance Ministers' Meeting.
Strategy and Finance Minister Kang Man-soo said in an interview with The Korea Times that the Asian financial and economic integration can be achieved after financial market cooperation in the region is expanded and developed in stages, adding Korea has and will lead regional financial cooperation by fostering the Chiang Mai Initiative (CMI) and other international agreements.
``There are difficulties in establishing a single financial market in Asia in the near future because of the differences in the financial development of Asian nations. But they have been making efforts to promote financial cooperation such as CMI multilateralization and the Asian Bond Market Initiative (ABMI),'' Kang said.
He said the ASEAN+3 Finance Ministers' Meeting held in Madrid in May, in particular, produced an agreement to establish $80 billion CMI fund, as well as a new roadmap for ABMI, adding the Asian financial cooperation is regaining momentum.
As for the Asian financial market integration, there have been a range of discussions among Korea, Japan, China and ASEAN members to establish a single financial market but the process has been lackluster, largely because of differing opinions over how to do it.
There are a plenty of lessons to learn from Europe's experience in establishing a single market for Asian economies and the issue has been discussed during the finance ministers' meeting here.
``EU was able to establish a single financial market on the basis of continuous efforts to understand each other. When mutual understanding and trust are enhanced through the strengthened cooperative channel of the ASEAN+3 Finance Ministers' Meeting, we will be able to make mutual efforts toward shared goals. It is also important to recognize it can only be achieved in gradual steps,'' the minister said.
As a host of the 8th ASEM Finance Ministers' Meeting, Kang said it is the first top-level ASEM meeting held in Korea since the 2000 ASEM summit.
``The meeting has brought to Korea leading figures of Europe's government and academic circles and will create momentum in furthering cooperation between Asian and European countries. Korea can also raise its profile as a nation that leads the economic integration of North East Asia as well as economic cooperation between Europe and Asia,'' he said.
Kang said the meeting will also present a good opportunity for ASEM members to exchange opinions on economic policy direction and discuss international cooperation.
``In particular, the meeting is the first top-level international economic conference of its kind to be held since the launch of the Lee Myung-bak Administration. It will serve as an occasion where the new administration's economic philosophy and policy direction can also be publicized,'' he noted.
Touching on the ongoing global financial market jitters, Kang stressed ASEM members should strengthen international cooperation and coordination to mitigate the fallout from the U.S. high-risk loan defaults and get the global market back on track.
Kang said the Korean government will emphasize two points regarding recent global economic instabilities at the ASEM Finance Ministers Meeting. First, there is a need for burden sharing among nations against global economic slowdown.
``Major economies should actively address economic risks via the overall spectrum of fiscal, monetary and financial policies to take on their share of the burden. Also, as confirmed on April 12 by the International Monetary and Financial Committee (IMFC), the fiscal policy is an effective policy measures to counter the economic slowdown,'' Kang said, backing the government's recent attempt to draw up a supplementary budget to boost the economy.
The government has tried to secure and spend up to 4.9 trillion won out of last year's surplus of 15.6 trillion won to stimulate domestic demand.
He then said increasing transparency of financial products and improvements in the financial market is needed. ``The subprime crisis was not caused by securitization itself but by the lack of the understanding of securitization, the underestimation of its risks and the lack of appropriate regulations. The rush to regulate should be avoided,'' he said.
Concerning rising oil and other raw material prices, Kang said it is necessary to take a more structural approach in balancing supply and demand to deal with soaring crude prices, adding importers should enhance energy efficiency and become less dependent on oil.
``Also, oil importing countries and the Organization of Petroleum Exporting Countries (OPEC) should develop more constructive methods to maintain stable oil prices through closer dialogue. Oil-exporting countries need to stimulate infrastructure investment to increase oil production,'' Kang said.
He said countries should pay close attention to speculative funds, which may have been involved in the recent oil price rise, stressing international collaboration is essential to effectively control rapidly increasing cross-border capital transactions.
Against the criticism that Korea is not giving enough to underdeveloped countries in official development assistance (ODA), Kang said the nation is gradually increasing ODA to play its part in fighting poverty even though the nation has a relatively short history of providing aid.
``Korea provided $670 million provided in aid in 2007, up 50 percent from the previous year. Considering our short history of providing aid, this is not a small amount and when aid to North Korea is included, our ODA would jump 100 percent. We will continue to increase ODA in the range permitted by our budget to actively contribute to the international society's fight to end poverty,'' he said.
In particular, the country will make a differentiated contribution in fighting poverty in the world by sharing our development experience with developing nations.
``Since 2004, the government has shared our successful economic development experience and know-how with the governments of developing nations. We will continue to expand these efforts. Going one step further, Korea will cultivate its economic development experience into worldwide cultural heritage,'' Kang said.
As for infrastructure financing and micro financing for the poor, one of the meeting's official agenda items, Kang said Korea will propose the ``Jeju Initiative'' to foster partnerships between public and private sectors.
``The objective is to increase knowledge sharing through public-private partnerships and other various channels, including capacity building programs and technical assistance. Still, some developing countries remain reluctant to adopting and implementing the partnership, but through this initiative, a cooperative channel will be established within ASEM to provide support to developing nations,'' he said.
Touching on the climate change and market-oriented approaches, the Korean government is taking on various methods to reduce greenhouse gas emissions utilizing market mechanisms even though it has no obligation to reduce greenhouse gas emissions according to the Kyoto Protocol, Kang said.
``To reduce greenhouse gases, we will put a range of policy measures in place to increase environment-friendly cars using clean energy such as hybrid energy, fuel cells and natural gas as well as to expand the supply of new renewable energies,'' the minister stressed.
leehs@koreatimes.co.kr
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김정은 軍에 선물도 父 답습…쌍안경·소총
