G-20 Seoul Summit to Address Financial Reform, Imbalance
By Na Jeong-ju
Korea Times Correspondent
ZURICH ― President Lee Myung-bak said Thursday the Group of 20 countries will focus on accelerating reform of the International Monetary Fund (IMF) and the World Bank, and addressing the needs of poor and developing nations to build up their economies at the Seoul summit in November.
"Ahead of the Seoul meeting, we will devote our energies toward reaching agreement on a stronger and more effective early warning and surveillance mechanism at the international level," Lee said in his special address at the World Economic Forum in the Swiss ski resort of Davos.
President Lee is among more than 30 heads of state participating in the five-day Davos forum, which opened Wednesday.
In order for the IMF and other financial institutions to fulfill their goals, it is important that they command broad support, he said.
Lee said such support can only be gained through the accountability and legitimacy that comes to an institution with a governance structure that is truly representative of its members.
He also stressed the need for the G-20 to fulfill its responsibility of steering economic growth in less-developed countries.
"At the November Seoul Summit, we will place development issues firmly on the agenda, and work toward finding accord," Lee said.
He said he believes Korea is well-placed to share its experiences and expertise with emerging and developing countries on strategies for development and on policies for successful recovery from financial crises.
"In order to achieve balanced and sustainable growth, the G-20 countries should make efforts to close the development gap between advanced and developing countries. Such a task should be regarded as being an integral part of the mission of the forum," the CEO-turned-President said.
The forum drew some 2,500 people from all around the world, including CEOs of financial firms, economists and senior policymakers.
One of the hotly debated issues here is U.S. President Barack Obama's proposal to limit the size of banks.
Obama presented measures last week to prohibit deposit-taking banks from owning or investing in hedge funds or private equity funds.
While some banking executives fear that such rules would hamper earnings and liquidity in the market, supporters say the plan would reduce the risk of governments having to step in again to bail out banks that were "too big to fail."
Lee backed Obama's proposal.
"Concerning financial regulation, important issues include finding ways to counter the pro-cyclical nature of the financial system, as well as the problem of institutions that are too-big-to-fail," Lee said in the address.
"We need to follow through on the progress achieved to date as well as find solutions for unresolved issues."
Lee also hoped the Seoul summit will provide an opportunity to promote free trade.
"Past G-20 summits have played a pivotal role in resisting protectionist pressures, and we need to reaffirm the importance of continuing our stance against protectionism," he said.
In particular, he emphasized that concluding the Doha Development Agenda before the end of the year should be given the highest priority.
Lee will return home Saturday after a weeklong trip that also took him to India.