Korea Should Become Free Economic Zone
By Lee Hyo-sik
Korea Times Correspondent
Istanbul, Turkey ― The nation's top economic policymaker said Tuesday that Korea should transform itself into a free economic zone (FEZ) as soon as possible to survive uphill competition with China and Japan on the global market.
Strategy and Finance Minister Yoon Jeung-hyun also called on the International Monetary Fund (IMF) to increase the nation's voting rights within the organization in accordance with the size of its economy, which has expanded at an explosive pace over the years.
``We are being sandwiched between China and Japan. The world's second-largest economy is saying that it sells the best quality products. The world's fastest-growing economy is making the sales pitch that its products are sold at the lowest prices. But we should tell consumers across the globe that Korea is selling high-quality goods at low prices. To emerge as a winner from the fierce competition with its two neighboring countries, we should transform the entire nation into a free economic zone,'' Yoon said, who is in Istanbul to attend the 2009 IMF/World Bank Annual Meetings.
The government has designated six areas across the country as FEZs in a bid to attract more investments from outside the country through the provision of tax breaks and other incentives, creating a better business environment for foreign investors and companies.
The minister then said all Koreans should work together for the goal. He also urged North Korea to open its door to the South and become a responsible member of the international community.
Yoon said the IMF had decided to reallocate at least 5 percent of its quota, adding that China and other emerging economies wanted to take away at least 7 percent from advanced economies and reallocate it among themselves. ``But many European members opposed the realignment of the IMF quota. But one way or the other, the minimum of 5 percent will be realigned to underrepresented countries based on the economic weight of member countries,'' Yoon said.
In a keynote speech addressed to 186 members of the IMF and World Bank, Tuesday,, he also urged the Washington-based organization to reform itself to more effectively respond to fundamental changes in the international financial system. ``With the global crisis resulting in significant changes to the world economic order, the IMF and the World Bank need to improve credibility and legitimacy through reforms.''
To overcome the current economic slump and achieve sustainable and balanced growth, the minister told meeting participants that a global safety net for developing economies, including currency swap arrangements and regional financial cooperation, should continue to be pursued.
``Along with these efforts, the world needs to engage in active promotion of green growth to secure a new economic growth engine. Under a national vision of ``Low-Carbon and Green Growth,'' Korea plans to invest around 2 percent of its gross national product in the green growth sector annually. We will also increase support for countries by participating in the World Bank's Scaling up Renewable Energy Program (SREP) and making other efforts to enhance international cooperation for green growth,'' he said.
Yoon also said exit strategies need to be prepared but that they should be implemented when recovery becomes fully secured, adding the strategies should be developed in a coordinated manner based on internationally agreed principles. `` To this end, I call on the IMF to promptly establish the criteria for exit strategies and come up with specific solutions to provide even-handed, candid and independent surveillance on member countries.''
The minister then pledged to increase support to low-income nations, welcoming the IMF's recent decision to strengthen aid to low-income countries and significantly increase the size of loans provided to them.