Korea ready to bridge gaps among G20 nations

Sakong Il, chairman of the Presidential Committee for the G20 Summit, points to Korea on a world map fixed in his office in Seoul.

Upon arriving at the office of Sakong Il in Samcheong-dong near Cheong Wa Dae for an interview, it didn’t take long to realize that the G20 Seoul Summit is just around the corner. His reception room was full of government officials and related guests lining up to see the chairman of the Presidential Committee for the G20 Summit. Everyone there looked tense as if the international gathering was just one week away.

Before the interview began, his spokesperson asked us to keep the interview quick, claiming his tight schedule. But Sakong gave lengthy responses to every issue, mindless of his next appointment. The following is the complete transcript of the interview. ― ED.

By Kim Jae-kyoung, Lee Tae-hoon

Q: Tell us about the progress in preparation for the forthcoming G20 Summit and challenges it faces.

The Presidential Committee for the G20 Summit has been working closely with relevant government ministries, as well as private institutions and experts at home and abroad to develop the agenda for the G20 Seoul Summit and make Seoul a successful host of the event.

The Committee has also formed a close network with major international organizations, such as the IMF, World Bank, OECD and WTO.

Over the next 100 days, it will carry out the tall task of helping Korea take the initiative and exercise its leadership in bridging differences among G20 members over major agenda that has been shelved to the Seoul Summit from the previous Toronto Summit.

Q: Korea is also preparing for the G20 Business Summit, which will bring together chairmen and CEOs around the world to Seoul. What is the purpose of hosting the event and what can the country gain from it?

Some 100 leading business figures around the world will be invited to attend the G20 Business Summit, which will also be held in Seoul just one day prior to the G20 Summit.

They will exchange views on what the private sector can contribute to bolstering global economic recovery, and achieving sustainable and balanced economic growth after the global financial crisis.

Governments and state-bodies, such as central banks, have thus far taken the lead in economic recovery, but the participation of the business community and their initiative will be vital in ensuring a more sustainable economic recovery and future growth.

Unfortunately, there hasn’t been much room for the private sector to have a say in the G20 Summit.

That’s why, as the chair of the G20 Summit, Korea is organizing the Business Summit with the aim of laying the foundation for such a gathering of world business leaders to be recognized as an important part of the Summit.

Many CEOs and heads of top global companies have already expressed their strong interest and willingness to participate in the Business Summit.

Q. What are the main issues to be discussed at the G20 Seoul Summit? And on what backdrop the “global financial safety nets” and “development issues” that Korea had proposed were adopted as agenda items?

Korea has been pushing “global financial safety nets” and “development issues” to be included in the top priority of the agenda for the Seoul Summit, providing that the country has a lot to offer to emerging and developing countries based on its memories and experience in achieving successful economic development and overcoming a financial crisis.

As for development issues, one of the most urgent tasks has been the creation of an effective program that can substantially benefit the economy of low income countries.

G20 leaders agreed to establish a working group tasked with development issues in line with the G20 Summit’s objective of enhancing international cooperation to generate strong, sustainable and balanced growth, upon Korea’s proposal in the Toronto Summit.

Working-level officials have been holding talks to explore measures that can promote economic growth in the less developed countries and facilitate the formulation of multi-year action plans that will be reported to the G20 leaders at the Seoul Summit for their consideration and endorsement.

There has also been a growing call for bolstering global financial safety nets, following the Asia Financial Crisis in the late 1990s, the ongoing global financial crisis and Southern Europe's fiscal crisis.

As a result, the leaders of the G20 acknowledged in the previous summit a need for international efforts to deal with capital flow volatility, financial fragility, and prevent crisis contagion.

Q: How the world economic order will be shaped under the G20 umbrella in the post global financial crisis era?

It is needless to say that a more concrete and tangible outcome should be achieved at the G20 Seoul Summit as the leaders of the G20 nations agreed to come up with major reform measures by then, including the establishment of the G20 framework, adjustment in the quota of the IMF, and improving global financial safety nets.

Once the agreements of the past four G20 meetings are faithfully executed and a tangible outcome is produced on issues concerning emerging and developing countries that Korea has proposed, the G20 Summit will be able to further cement its position as a premier forum for international economic cooperation.

Q. What is your outlook for the global economy?

The possibility of a double dip recession cannot be ruled out in some southern European countries which are presently undergoing a fiscal crisis.

Nevertheless, I believe it is less likely that the world economy will suffer a double dip.

The G20 leaders reached a consensus on the need to gradually improving fiscal soundness to prevent the world economy from being trapped in a double dip as they extensively discussed the matter during the last Toronto Summit.

It will be foremost important for the countries undergoing a fiscal crisis to come up with a long-term plan to overcome their predicament, which will help the world economy to regain trust in the market in the future.

The G20 Summit will also need to play a pivotal role in assessing and monitoring the implementation of their plans through a peer review or mutual assessment process, as a means of securing a more practical and satisfactory outcome.

Q: What is your outlook for the Korea economy?

Recently, international organizations, such as the IMF and OECD, have raised the growth forecast for Korea on the assumption that its economy will considerably rebound in the latter half of the year.

They forecast such a rosy outlook for Korea because domestic sales will likely increase thanks to a rise in its exports, better corporate earnings and a positive picture of the country’s employment market in the second half.

Q. Korea’s image significantly improved with the help of the hosting of major sports events, such as the 1988 Olympic Games and 2002 World Cup. Do you expect the hosting of the G20 Summit will have a similar effect?

I believe the hosting of the upcoming G20 Summit will be a great opportunity for the country to boost its international reputation and strengthen its “national brand.”

The hosting of the G20 Summit will help the country take a great leap forward in improving its status in the international diplomatic circle.

As the chair of the premier forum for international economic cooperation, Korea will be able to make itself known all over the world for taking a leading role in reshaping the world economic order along with other G20 nations, which have played an exemplary role in the international community.

Certainly, attention will be drawn to Korea in November, when the leaders of the G20 nations and numerous big-name figures arrive for the Summit.

I’m also optimistic that the successful hosting of the event will provide fresh momentum for upgrading the undervalued image of Korea and its products, naturally resulting in an enormous economic benefit.

Given that Korea is forecast to export $440 billion worth of goods abroad this year, if the country can reduce 1 percent of “Korea Discount,” which still runs deep among many of its export items, it can lead to an economic benefit of $4.4 billion.

Similarly, 10 percent of reduction in such a discount effect is equivalent to producing $44 billion worth of added value.

Q: Could you comment on some criticism that Korea may have overstepped its role in preparing the G-20 Summit?

Those critical of Korea’s active involvement in setting up the Summit agenda overlook the fact that the chair of the country has a much greater responsibility than just providing a venue or reading a pre-arranged statement.

The primary role of the chair nation is gathering views and hearing opinions of not only from the G20 member nations, but also 172 non-G20 U.N. members, in order to come up with a solution for sustainable and balanced growth for the world economy.

In other words, Korea has been actively fulfilling its duties, rather than trying to steal the limelight.

Q: Lastly, what is your secret of having such great connections with many business leaders abroad?

Maintaining a network with leading figures of the world can be painstaking and requires a great deal of time and effort.

You need to constantly study to update yourself and be knowledgeable of what their interests are in order to have a stimulating conversation and exchange insightful views.

A mutual trust should be built first before seeking friendship, though this is one of the necessary preconditions, not the sufficient one.

It is important to note that you must relentlessly apply yourself in order to be able to engage in conversation with them on a wide range of topics.

Who is Sakong Il?
Sakong Il chairs the Presidential Committee for the G20 Summit which consists of concerned cabinet members and senior presidential staff, among others.

In the past he served in the Office of the President as special economic adviser to the President from March 2008 to April 2009.

He also chaired the Presidential Council on National Competitiveness from March 2008 to January 2009.

The council is considered to be the flagship of the Lee Myung-bak government.

Sakong previously served in as finance minister (1987-88), senior secretary to the President for Economic Affairs (1983-87), senior counselor to the Minister of Economic Planning Board (1982) and senior economist of the Council on Economic and Scientific Affairs for the President (1979-80).

As the founder, chairman and CEO of the Institute for Global Economics (IGE), a private nonprofit research institute based in Seoul, from 1993 to early 2008, he has been instrumental in leading and being an influential figure.

He graduated from Seoul National University in 1964 and received his MBA in 1966 and Ph.D. in 1969 from the University of California at Los Angeles.