ABCDE Confab Discusses Global Economy

Hosted by MOSF and World Bank and attended by some 300 economic experts and academics

The Annual Bank Conference on Development Economics sponsored jointly by the World Bank and the Ministry of Strategy and Finance completed its three-day session on June 24 at the Shilla Hotel in downtown Seoul. This year was the 20th annual global conference designed to discuss the economic development in third world countries and cooperation worldwide by global economic leaders and world-renowned economists.
This year's gathering had a main theme of “Lessons from East Asia and the Global Financial Crisis,” and was kicked off with an opening ceremony on June 22. Minister Yoon Jeung-hyun of the Ministry of Strategy and Finance delivered the opening speech before some 400 participants including World Bank officials led by Senior Vice President and Chief Economist Justin Lin; Dr. Sakong Il, chair of the G-20 Korea Coordinating Committee and concurrently Chairman of the Korea International Trade Association; Chairman Eou Yoon-dae of the National Brand Committee, Dr. Ann Kruger; and Dr. Simon Johnson, among the professors, academics, leaders in finance, business and economic research institutes.
Minister Yoon, in his speech to open the first session of the global conference, said what is needed at the moment is a rapid global policy cooperation regime to cope effectively with the economic crisis sweeping the world. Positive signs that the worst phase of the economic crisis is over have been emerging due to the G-20 Summit Agreement and other international cooperation efforts, the minister said. But uncertainty is still there and the G-20 Group should continue to play its central role to stymie the economic crisis through continued global macro-policy coordination.
Minister Yoon went on to say that a new growth engine should be secured for sustainable world economic growth and to fight global warming through a Green Growth New Deal. The minister recommended a more balanced world economy through an expansion of freer trade and investment and the pursuit of joint growth by resolving the economic problems of the absolute poorest countries. Korea is ready to play the role of a bridge between advanced and developing countries with its development experience and with its economy closely approaching the levels of advanced countries.
Minister Yoon also pledged that Korea, as the 10th largest economy in the world, would perform its role as a global economic partner befitting its economic position. He also said Korea will expand its knowledge sharing program to help the economic growth of developing countries and also increase Official Development Assistance (ODA) for its positive support in solving under-development, climate change and other joint global problems.
“As Korea is the chair country for the G-20 Summit scheduled for next year, we will try to have the meeting solidify its position as a center of international coordination,” Yoon said. Minister Yoon said the ABCDE conference would be able to search out ways to solve the economic crisis and be able to find a means for the world to sustain its economic growth.
World Bank Senior Vice President Justin Lin said the World Bank's optimistic view on Korea is based on preemptive policy responses by the government and trade with East Asia.
“Due to good fundamentals, the government's stimulus packages and the East Asian trade linkage, the Korean economic recovery will be the strongest among OECD countries,” Lin said. The bank's view on Korea has not changed its opinion much from that of March when the bank painted a 1.7 percent contraction scenario for the world economy.
Dr. Sakong Il, chair of the G-20 Summit Korea Coordinating Committee and chairman & CEO of the Korea International Trade Association (KITA), noted that it is too early for the Korean government to discuss “exit strategies” or measures to reduce liquidity pumped into the markets by the government to prevent inflationary pressure.
“The economy is showing some signs of recovery due to the government's stimulus packages, but we need to secure a sustained recovery. It's too early to discuss exit strategies,” the KITA chairman said.
Meanwhile, at the ABCDE conference, academics actively engaged in a discussion on themes such as industrial policy and development and social capital. Chang Ha-joon, an economics professor at Cambridge University, said the most urgent policy for Korea is to boost spending on research and development. “The IT innovation that started in the 1970s is losing steam and there will be a major paradigm shift in terms of technologies,” Chang said. “As Korea cannot survive on low labor costs anymore, Korea should compete with advanced technologies. But the government support for R&D is relatively small,” Chang said. nw

Minister Yoon Jeung-hyun of the Ministry of Strategy and Finance delivers an opening speech at the Annual Bank Conference on Development Economics.