G-20 can play a bigger role

We all hoped that this year would be better than the last, but internal and external challenges poured cold water on those expectations. Global economic conditions are worse than ever, threatening the Korean economy heavily dependent on trade. Not only developed countries but also emerging economies like China are slowing down, and a prolonged slump of the global economy casts grim prospects.

Countries around the world acknowledge the challenge, and G-20 countries are seeking ways to resolve major issues. Finance ministers and central bank governors will meet in February, and a G-20 summit meeting is scheduled in November. But not many people know that Turkey is the chair country this year, and China will chair the G-20 next year. The G-20 has played a pivotal role in resolving global economic issues since the financial crisis. The aftershock of the global financial crisis of 2008 was temporarily soothed in early 2009 thanks to the international policy cooperation initiated by G-20.

Unlike in the earlier days, the role of the G-20 has recently been reduced. But the G-20 still needs to initiate resolutions to the structural economic slump, uncertainty of the global financial market and aggravation of inequality within and among countries. What’s most needed in order to respond to the potential threat of the global economy is international policy cooperation. The G-20 is the highest-level forum for global economic cooperation with the biggest influence among international organizations. Therefore, the G-20 can play a bigger role in inducing international policy cooperation.

If the G-20 can still play a pivotal role, Korea’s participation should be more active. Korea’s voice on global issues can grow if we bring the issues for which Korea has comparative advantages as a core agenda item of the G-20 and utilize that experience as a chair country. Turkey and China, which will chair the G-20 this year and next year, are emerging economies, and it would be a great chance to strengthen Korea’s role. By making the best out of the G-20, Korea needs to create a friendly diplomatic environment and enhance the country’s international status.

by Lee Young-seob, Professor of economics at the Graduate School of International Studies at Seoul National University