 Yoon Jeung-hyun |
Views differ broadly on Strategy and Finance Minister Yoon Jeung-hyun, the host of the ongoing G20 meeting of finance ministers and central bankers in Gyeongju.
On one hand, he is seen as an astute regulator of conflicting interests especially over the so-called currency war without being swept up by big powers from the United States, China and Europe.
On the other, he is criticized for being incapable of showing inspiring leadership, only trying to prevent it from going full-fledged. The obvious risk is that his faultiness will flare up during the G20 Seoul Summit. Yoon may say that his clout as Korea’s finance minister falls short of forcing the warring parties to shake hands and make up.
Still, the question is whether or not he limits himself to the self-defeating narrow definition of his role. Simply put, isn’t it impossible for him to reach out further and play a bigger role of honest broker?
Obviously, no breakthrough in the Gyeongju meeting will lead to a blowup at the Seoul leaders meeting three weeks later. Any premonition of a failure will not just chill the Lee Myung-bak government, which has great hope for the successful summit to showcase Korea’s advancement to the ranks of developed countries, but cast the relevance of G20 into question.
In a recent written interview with The Korea Times, Yoon, regarded as one of the most skillful Korean bureaucrats, showed his intention to try and sidestep the currency issue once again. By doing so, can he disarm what is widely seen as a ticking time bomb or merely delay an explosion?
“As the host nation, we have tried to produce an agreement on the exchange rate issue from a global perspective, rather than discussing a specific nation’s exchange rate,” Yoon said. “The confrontation among the nations has become severe with the exchange rate issue receiving highlight as a global issue. At the finance ministers’ meeting in Gyeongju, I, as the host, will put focus on the policy coordination over a whole range of economic policies, including the exchange rate issue.”
The United States has been accusing emerging nations of large dollar reserves, especially China, for causing “global imbalance” by maintaining the value of their currencies low. Some American politicians and academics have asked their government to “fight fire with fire” — increasing the supply of dollars into the market in order to devalue its currency.
As the two countries showed no willingness to step back on the currency issue, news reports have been coming out that they may hit a sort of “big deal” over the currency and other issues, such as the reform of the IMF.
Another possibility of a breakthrough was raised by the Seoul Economic Daily, a sister paper of The Korea Times, on Thursday. The paper quoted unnamed Korean officials in the government that the G20 countries are considering diverting the currency issue into global trade balance.
The so-called “4 percent” rule is that the G20 nations will be urged to keep their current account surplus, or deficit, within 4 percent of their gross domestic product. According to the alleged proposal, China (5.96 percent surplus in 2009) and Korea (5.13 percent surplus) have to cut their surpluses from trade. The easiest way to do so is to appreciate currency. The finance ministry made a press release on Thursday to disapprove the report.
In the e-mail interview, Yoon hoped that the G20 will be able to reach an agreement in Seoul, where the national leaders will meet on Nov. 11 and 12, because of “peer pressure.”
“The G20 is different from multilateral consultations, since it gives each of its members ownership over the discussion process,” Yoon said. “Because of the constructive peer pressure, it is impossible for the discussion to shift toward a certain party. The peer pressure will be amplified when the leaders by themselves engage in the final decision-making stage.”
He also asked for active participation from fellow finance ministers for the G20 to settle down as a permanent fixture.
“If we want to make the G20 a forum for global economic growth and development, we need cooperation from every country in the group. Therefore, I sincerely ask for support from my fellow ministers,” he said.
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