[Viewpoint] Duty comes with honor as G-20 host

The government is in unusually high spirits after Seoul was named, at the latest summit in Pittsburgh, as the first Asian city to host a Group of 20 meeting. President Lee Myung-bak held a press conference and a subsequent hearing, beaming. “We are now standing in the center of the world,” he said.

Lee boasts that hosting the global forum of the world’s biggest industrial nations and emerging economies could rake in publicity worth trillions of won (billions of dollars) and economic benefits of $500 million. The event will be a kind of windfall for the country. It is expected to bolster the national brand, exhibition and tourism industries, foreign investment and exports. The president and his entourage are said to have thrown their hands in the air, cheering, on their flight home.

Congratulations are in order. As the president pointed out, until now we have been bystanders on the world stage, sitting quietly and nodding our heads in agreement. We swallowed unfair orders handed down by greater powers.

For most of our modern history, we have been a peripheral country, regarded as underdeveloped and often exploited or dominated by the core developed and industrialized nations. We can now shake off any remaining feelings of self-pity or inferiority. We have become part and even the host of the elite group setting the rules of the global economic order. We will chair discussions among leaders of the world’s most influential economies. This is something even Japan hasn’t accomplished yet. So the government has reason to raise their champagne glasses.

And yet, I am experiencing a creepy, unnerving feeling of deja vu. Around this time 13 years ago, the government was just as exuberant while announcing the country’s official entry to the Organization for Economic Cooperation and Development. The government at that time also promised that joining the OECD would hoist the country’s national brand, accelerate our ascent to the ranks of advanced countries and boost investment and exports. The country’s credibility would rise, making borrowing from abroad cheaper and easier. Newspapers overflowed with congratulatory advertisements.

The government was no less euphoric when the International Monetary Fund fully liberalized Korea’s current-account transactions in 1988, touting the event by promoting essays on the theme of “economic management in the era of current-account surplus.”

Don’t get me wrong. I’m not attempting to crash the party and splash cold water on the presidential team. I am well aware that the G-20 and the OECD are two different organizations. The OECD is a kind of club among wealthy countries to share information and deepen understanding, whereas G-20 leaders meet to shape and set the rules for the global economic system. Many opposed joining the OECD due to the high membership costs, but we have nothing to lose by hosting the G-20 summit next year.

Yet I bring up the OECD to bring the government back down to earth.

The government, especially on economic affairs, must remain calm. A self-indulgent government will put the country at risk. We learned this in 1988 and 1996. At those times, the Korean president was also preoccupied with exultation - and the results were catastrophic. A recession and a foreign exchange crisis eclipsed the hype over the IMF current account liberalization.

There is no such thing as a free lunch. Demanded of Korea will be the responsibility and duty required of one who helps set the rules. Korea, as a host country, may be asked to stand at the forefront in the campaign to repair the inequalities of global trade. We may be pressured to revise our trade policies - now oriented purely to bolster our exports and trade surplus. We must consider whether the prices are worth paying and hammer out measures to minimize our losses. We will have to expand aid to developing countries and fund efforts to fight global warming. All this requires massive amounts of taxpayer money.

Overindulgence is a hazard to any government, which is why Korea must collect its thoughts and attend to the work we must now do.

*The writer is a senior economic news reporter and an editorial writer of the JoongAng Ilbo.

by Kim Young-wook