As global leaders convene in Pittsburgh to address the global economic crisis for the third time in less than a year, there is cause for both optimism and a heavy sense of responsibility to sustain early signs of a global recovery. Follow-up measures from Pittsburgh will fall primarily to South Korea as the responsibilities for chairing and hosting G-20 meetings during 2010 shift from London to Seoul. This development will mark a significant symbolic turning point in global governance, as South Korea will be the first non-G-8 country to hold those responsibilities since the G-20 has emerged as a venue for addressing global financial issues at the leadership level. It also places the burden of proof on South Korea to show that an expanded forum beyond the G-8 can provide effective global leadership in response to the crisis.
In London last April, South Korea championed global coordination to promote macroeconomic stimulus that will provide $5 trillion for the next two years, and promoted $1.1 trillion in pledges for expanded funding through international financial institutions (IFIs) to counteract the effects of the global financial crisis on developing countries. South Korea has also stood against protectionist tendencies, sponsoring "standstill" pledges among G-20 countries not to utilize protectionist measures in the face of the crisis, as G-20 Summit Coordinating Committee Chairman Il Sakong explained in the Center for U.S.-Korea Policy's May newsletter.
As a former CEO, South Korea's President Lee Myung-Bak is well-qualified to promote recovery measures designed to promote an early exit from the crisis. Under Lee's leadership, South Korea's own efforts to promote economic recovery have yielded early results and are strongly in line with those of the Obama administration, in no small part because Lee conceives of U.S.-ROK economic coordination as an opportunity to expand the U.S.-ROK alliance. In his September 21st speech to the Council on Foreign Relations in New York, Lee emphasized that he and President Obama have "agreed that this alliance will no longer just be about ensuring security, but much more. It will continue to carry out its purpose of securing peace, but at the same time it will be a comprehensive strategic alliance for the 21st century that encompasses economic, social, cultural, educational, scientific and technological cooperation." This suggests that Lee conceives the success of South Korea's G-20 leadership as directly tied to expanded alliance coordination with the United States, and it suggests that such coordination has a raison d'etre that extends far beyond deterring North Korea.
Another component of Lee's agenda with the United States is the pending Korea-U.S. Free Trade Agreement (KORUS FTA), which has been stalled by the need for further discussions over Congressional concerns regarding provisions of the FTA that deal with the politically sensitive auto sector. As CSIS's Stephen Schrage has argued in the Center for U.S.-Korea Policy's April newsletter, South Korea's successful stewardship of the G-20 and Congressional ratification of the KORUS FTA should go hand-in-hand, further strengthening the argument for enhanced U.S.-ROK strategic cooperation to lead on global economic issues.
South Korea's great challenge and opportunity is to show that the G-20 can maintain effectiveness even as the crisis subsides and to ensure that this is not a crisis wasted by carrying through on reforms that will prevent the recurrence of such crises. Challenges for the Pittsburgh meeting include consideration of measures to counter rising unemployment or inflation in the global economy while laying the foundations for sustainable and balanced global growth. South Korea's proposals going into the meeting include the mobilization of IFIs to produce recommendations for post-crisis global economic management, the establishment of a trust fund to expand access by developing countries to financial assistance in times of financial crisis, to kick-start the Doha round of trade negotiations, and to reaffirm "standstill" and "rollback" commitments against protectionism.
Mo Jongryn of Yonsei University's Research Institute for Globalization argues that the rise of the G-20--and South Korea's assumption of leadership in the G-20--is an opportunity for Asia to show leadership that redresses Asia's past under-representation in proportion to its economic weight in the international community. He also argues that such an opportunity may be lost unless Asians themselves show more cohesion and distinctive contributions in the face of the economic crisis. The G-20 is a venue that gives Asians a seat at the table, but such an opportunity will be wasted unless Asians deliver in providing a distinctive and effective agenda.
South Korea must infuse its G-20 chairmanship with substantive and effective leadership if the G-20 is to cement its role as the main venue for expanded economic coordination. South Korea's handling of its G-20 chairmanship is a make or break opportunity on many different levels; the pressure is on South Korea to show that it can live up to the task by catalyzing global coordination of exit strategies from the crisis and by addressing global imbalances between developing and industrialized countries. Expanded U.S.-ROK alliance coordination to address global economic issues will continue to be a cornerstone of South Korea's efforts.
This comment originally appeared as part of The Asia Foundation's weekly blog, In Asia.