Back To Top

Park calls for closer macroeconomic coordination during G20 summit

South Korean President Park Geun-hye called Thursday for closer macroeconomic coordination among the world's top economies, urging advanced countries to be more careful when changing their monetary policies.

Park made the appeal during the opening session of the summit of the Group of 20 major economies in Russia's second-largest city, saying economies around the world are interlinked so much that it is difficult for any one of them to grow alone.

"In a situation like this where global economies move in gear with each other, if the economies of emerging countries experience difficulties, then the economies of advanced countries cannot help but experience difficulties as well," Park said during the meeting.

"We have to understand that preventing a situation like this is in the interests of both emerging and advanced nations, and step up cooperation among G20 members under a sense of joint community that we are riding on the same boat," she said.

The G20 summit came as the U.S. Federal Reserve prepares to scale back its monthly bond-purchasing program, known as quantitative easing. The planned tapering-off of the stimulus measure is one of the hottest global economic issues amid concern it could destabilize emerging economies.

Park stressed that advanced countries should care about difficulties faced by emerging economies and work together to minimize them with a sense of joint community, just as emerging nations contributed to global economic growth since the 2008 world financial turmoil, officials said.

Developed economies must take into consideration the negative impacts that changes in their monetary policies would have on their emerging counterparts, Park said. She also urged emerging economies to work harder to improve their macroeconomic health, according to officials.

"Exit strategies of advanced nations can be seen as part of normalization of the world economy. Nonetheless, when advanced countries change the basis of currency policies, they should be more careful and take into consideration its effects on emerging countries," she said.

Not only emerging countries, such as Brazil, India and Turkey, but also Germany expressed support for Park's appeal, according to senior presidential economic secretary Cho Won-dong.

Other points she made during the opening session included calls for promoting freer trade and strengthening the roles of regional financing arrangements, a pool of emergency funds contributed by economies in a region for use in emergencies.

Unlike monetary and fiscal stimulus measures, trade expansion is a "win-win policy" that involves little cost, as it does not cause credit bubbles or hurt fiscal health, Park said. She also expressed active support for host Russia's call for extending the "standstill" on trade protectionism until 2016.

Almost all countries also expressed support for extending the standstill, but they differed over how long it should be extended, Cho said, adding that an agreement on the matter will be included a joint communique to be issued at the end of the summit Friday.

On Friday, the G20 summit is expected to take up issues like how to create jobs and promote trade and investment. Park plans to call for countries to make concerted efforts to help the global economy overcome uncertainties and get on the sustainable growth track, officials said.

In particular, she will also deliver a "lead speech" in which she plans to highlight the importance of resolving the problems of low growth and high unemployment. Other issues she plans to focus on include aid programs for developing economies, officials said.

The opening session was also watched closely as to whether Park will have her first encounter with Japanese Prime Minister Shinzo Abe. But the two leaders were seated away from each other and did not have any meaningful encounter, officials said.

Park has shunned a summit with Abe as relations between their nations remain frayed due to Japan's repeated claims to South Korea's easternmost islets of Dokdo. Its unrepentant attitude toward the sexual enslavement of Korean women for its troops during its 1910-45 colonial rule of the Korean Peninsula has also soured relations.

On the sidelines of the summit, Park met bilaterally with Italian Prime Minister Enrico Letta and U.N. Secretary-General Ban Ki-moon. She is also scheduled to hold one-on-one meetings with German Chancellor Angela Merkel, Kazakhstan President Nursultan Nazarbayev and Russian President Vladimir Putin.

During the summit with Letta, Park called for Italian firms to consider setting up factories in an inter-Korean industrial complex in the North's border city of Kaesong. The two leaders also agreed to work together to further enhance economic cooperation between their nations.

Russia was the first leg of Park's two-nation trip that will take her to Vietnam on Saturday. (Yonhap News)

MOST POPULAR