ID :
30483
Sun, 11/16/2008 - 06:51
Auther :
Shortlink :
http://m.oananews.org//node/30483
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Lee warns against emergence of protectionism in trade, investment
By Hwang Doo-hyong
WASHINGTON, Nov. 15 (Yonhap) -- South Korean President Lee Myung-bak Saturday cautioned against protectionism and suggested currency swap lines between advanced and emerging economies and more funds to developing countries to help alleviate a credit crunch in the global financial markets.
In a keynote speech at the G20 economic summit here, Lee said, "What we are
concerned about is spread of protectionism due to the current difficult economic
situation."
He said any spread of protectionism will make the global economy more susceptible
to recession and harm weak emerging economies.
In this context, Lee called for global leaders to agree on a "Stand-Still"
declaration in which they would no longer create new barriers to trade and
investment.
The president also proposed concerted efforts to conclude the Doha Round
multilateral trade negotiations and economic stimulus measures with increased
spending in a counter-cyclical measure.
"South Korea has already come up with fiscal spending worth 3.7 percent of gross
domestic product and tax cuts," he said, dismissing concerns of a budget deficit.
On the reform of the International Monetary Fund, Lee backed away from his
previous stronger position, citing a lack of time needed during this first
economic summit.
"The IMF has not been seen positively by emerging and developing economies," he
said, apparently referring to the lending agency's higher interest rates, tight
budget spending and other tight regulatory measures for beneficiary countries.
South Korea received an IMF bailout package in the Asian financial crisis in the
late 1990s.
"However, it was very desirable for the IMF to make short-liquidity facility to
provide foreign currency liquidity," he said. "It is inevitable for the IMF to
increase its funding resources to distribute benefits to the countries which were
not represented at this summit."
Lee, French President Nicolas Sarkozy and several other heads of state have
called for sweeping reform of the IMF and the establishment of a new global
financial system to keep pace with recent changes in the global economy.
"The ongoing financial crisis shows the current financial system has not kept up
with changes being made in the finance industry," Lee said in a recent interview.
"Under the new financial transaction environment, it is time for us either to
greatly reform the existing regime or to make a completely new one."
Sarkozy and several other leaders also called for less dependence on the U.S.
dollar in international trade, blaming the global financial crisis on what they
called excessive reliance on the greenback.
Lee, however, told the summit forum, "I think this short session should
prioritize stabilization of the global financial market and minimizing its
adverse impact on economic fundamentals, although today's session was supposed to
deal with reform of the international financial systems to prevent recurrence of
the financial crisis."
Lee also urged the world's leading economies to establish currency swap lines to
help provide foreign currency liquidity to emerging economies.
South Korea currently has a US$30 billion currency swap arrangement with the
U.S., a currency line of $13 billion with Japan and a $4 billion currency deal
with China.
Finance ministers of South Korea, China and Japan met here Friday to agree on the
need to explore a possible increase in the size of bilateral currency swap
arrangements between their respective countries.
They also agreed that working with other ASEAN+3 members on expediting the Chiang
Mai Initiative Multilateralisation (CMIM) was a top priority.
South Korea, China and Japan have agreed with 10 members of the Association of
Southeast Asian Nations to set up an $80 billion fund to help stabilize regional
financial markets, although the three Northeast Asian economic powers have yet to
agree on how to divide the equities.
WASHINGTON, Nov. 15 (Yonhap) -- South Korean President Lee Myung-bak Saturday cautioned against protectionism and suggested currency swap lines between advanced and emerging economies and more funds to developing countries to help alleviate a credit crunch in the global financial markets.
In a keynote speech at the G20 economic summit here, Lee said, "What we are
concerned about is spread of protectionism due to the current difficult economic
situation."
He said any spread of protectionism will make the global economy more susceptible
to recession and harm weak emerging economies.
In this context, Lee called for global leaders to agree on a "Stand-Still"
declaration in which they would no longer create new barriers to trade and
investment.
The president also proposed concerted efforts to conclude the Doha Round
multilateral trade negotiations and economic stimulus measures with increased
spending in a counter-cyclical measure.
"South Korea has already come up with fiscal spending worth 3.7 percent of gross
domestic product and tax cuts," he said, dismissing concerns of a budget deficit.
On the reform of the International Monetary Fund, Lee backed away from his
previous stronger position, citing a lack of time needed during this first
economic summit.
"The IMF has not been seen positively by emerging and developing economies," he
said, apparently referring to the lending agency's higher interest rates, tight
budget spending and other tight regulatory measures for beneficiary countries.
South Korea received an IMF bailout package in the Asian financial crisis in the
late 1990s.
"However, it was very desirable for the IMF to make short-liquidity facility to
provide foreign currency liquidity," he said. "It is inevitable for the IMF to
increase its funding resources to distribute benefits to the countries which were
not represented at this summit."
Lee, French President Nicolas Sarkozy and several other heads of state have
called for sweeping reform of the IMF and the establishment of a new global
financial system to keep pace with recent changes in the global economy.
"The ongoing financial crisis shows the current financial system has not kept up
with changes being made in the finance industry," Lee said in a recent interview.
"Under the new financial transaction environment, it is time for us either to
greatly reform the existing regime or to make a completely new one."
Sarkozy and several other leaders also called for less dependence on the U.S.
dollar in international trade, blaming the global financial crisis on what they
called excessive reliance on the greenback.
Lee, however, told the summit forum, "I think this short session should
prioritize stabilization of the global financial market and minimizing its
adverse impact on economic fundamentals, although today's session was supposed to
deal with reform of the international financial systems to prevent recurrence of
the financial crisis."
Lee also urged the world's leading economies to establish currency swap lines to
help provide foreign currency liquidity to emerging economies.
South Korea currently has a US$30 billion currency swap arrangement with the
U.S., a currency line of $13 billion with Japan and a $4 billion currency deal
with China.
Finance ministers of South Korea, China and Japan met here Friday to agree on the
need to explore a possible increase in the size of bilateral currency swap
arrangements between their respective countries.
They also agreed that working with other ASEAN+3 members on expediting the Chiang
Mai Initiative Multilateralisation (CMIM) was a top priority.
South Korea, China and Japan have agreed with 10 members of the Association of
Southeast Asian Nations to set up an $80 billion fund to help stabilize regional
financial markets, although the three Northeast Asian economic powers have yet to
agree on how to divide the equities.
