2010 G-20 Seoul Summit, Republic of Korea The 2010 G-20 Seoul Summit is the fifth meeting of the G-20 Heads of Government, to discuss the global financial system and the world economy, which will take place in Seoul, South Korea during November 11–12, 2010. Republic of Korea becomes the first non-G8 nation to host a G20 Leaders Summit. The theme of the summit will be “G-20’s Role in the Post-Crisis World.” What is the G-20? The Group of Twenty (G-20) Finance Ministers and Central Bank Governors was established in 1999 to bring together the world’s main industrialized and developing economies for discussion of key issues regarding the global economy. The inaugural meeting of the G-20 took place in Berlin in December 1999, hosted by the German and Canadian finance ministers. The heads of state of the G-20 have held summits since 2008. The G-20 is a top forum for international economic development that promotes open and constructive discussion on key issues related to global economic stability. By contributing to the strengthening of the international financial system and providing opportunities for dialogue on national policies, international cooperation and international financial institutions, the G-20 helps support growth and development across the globe. The European Union, which is represented by the current holder of the EU’s rotating presidency and the head of the European Central Bank, is the 20th member of the G-20. History: st • 1 Summit: USA (Washington, D.C.), November 2008 nd • 2 Summit: England (London), April 2009 rd • 3 Summit: USA (Pittsburgh), September 2009 th • 4 Summit: Canada (Toronto), June 2010 th • 5 Summit: Republic of Korea (Seoul), November 2010 Member Countries (20) 1. Argentina 2. Australia 3. Brazil 4. Canada 5. China 6. France 7. Germany 8. India 9. Indonesia 10. Italy G-20 Seoul Summit 2010 • Date: November 11th~12th, 2010 • Venue: Coex
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
Japan Republic of Korea Mexico Russia South Arabia Republic of South Africa Turkey United Kingdom United States of America European Union
Organizer: Presidential Committee for the G-20 Summit
Agenda 1. Ensuring Ongoing Global Economic Recovery The world economy continues to recover faster than anticipated, but significant challenges remain. The recovery is uneven and fragile and unemployment in many countries remains at unacceptable levels. Moreover, recent events highlight the importance of sustainable public finances. In June, 2010, at the Toronto Summit, the leaders of the G20 agreed on the importance of safeguarding and strengthening the recovery while laying the foundation for strong, sustainable and balanced growth, and strengthening our financial systems. They committed to working together toward those ends. 2. Framework for Strong, Sustainable and Balanced Growth At the Pittsburgh Summit, the G20 leaders launched the Framework for Strong, Sustainable, and Balanced Growth to strengthen international cooperation in the interest of future economic growth and stability. The leaders of the G20 tasked the IMF to support a mutual assessment process for the Framework, in conjunction with other relevant international organizations with expertise on development, finance, labor market, and trade. At the Toronto Summit, the leaders reviewed the results and agreed on a set of policy options which, if implemented, would bring the world economy closer to the G20â€™s shared objectives. At the Seoul Summit, the leaders will agree on a comprehensive policy action plan designed to lead the world toward strong, sustainable and balanced growth. It will include policy commitments made by each country, based on the basket of policy options agreed to at the Toronto Summit, 2010. 3. Strengthening the International Financial Regulatory System The G20 leaders have committed to strengthening the financial regulatory system both to sustain global growth and to prevent future crises. These efforts toward financial sector reform are largely geared toward restoring the industryâ€™s integrity, transparency and accountability, thereby allowing it to regain the confidence of the general public. According to the timeline created at the Pittsburgh Summit, more stringent international rules regarding bank capital and liquidity requirements will be created by the end of 2010. They will then be phased in as financial conditions improve and economic recovery is assured, with the aim of implementation by end-2012. In addition, the G20 tasked the Financial Stability Board (FSB) to develop capital and liquidity standards for systemically important financial institutions (SIFI) in order to prevent excessive risk taking. The G20 leaders also asked the FSB to suggest appropriate resolution tools to address the potential failures of SIFIs. At the Toronto Summit, the G20 Leaders (i) affirmed their intention to reach agreement on a new capital framework by the Seoul Summit and (ii) called on the FSB to consider and develop concrete policy recommendations to deal with SIFIs by the Seoul Summit. In addition, the Leaders called on the FSB, the Basel Committee on Banking Supervision (BCBS) and other relevant organizations to report on the progress made, and new reforms required, in the areas
of supervision, hedge funds, credit rating agencies and over-the-counter derivatives to the Finance Ministers and Central Bank Governors at their October, 2010 meeting. 4. Modernizing the International Financial Institutions “We called for an acceleration of the substantial work still needed for the IMF to complete the quota reform by the Seoul Summit and in parallel deliver on other governance reforms, in line with commitments made in Pittsburgh.” G20 Communique, June 26-27, 2010 For the G20, the crisis has called into question the effectiveness of existing international financial institutions. In Toronto, the G20 Leaders reaffirmed the urgency of IMF reform and called for the reform to be completed by the Seoul Summit. Those reforms entail a shift in quota share to dynamic emerging market and developing countries of at least 5% from over-represented to under-represented countries. In addition, the Leaders committed to addressing the issue of the size of any increase in quotas, size and composition of the Executive Board, ways of enhancing the Board’s effectiveness, the Fund Governor’s involvement in the strategic oversight of the IMF, staff diversity, and a merit-based selection of heads and senior leadership of all IFIs. Going forward, the IMF is expected to strengthen its ability to provide even-handed, candid and independent surveillance of the risks facing the global economy and the international financial system. Moreover, in collaboration with the FSB, it is expected to provide advance warning of macroeconomic and financial risks, and offer appropriate recommendations to head them off. Meanwhile, the World Bank has already reached agreement on shifting 3.13% of voting power to developing and transition countries, delivering on its commitment to reach the agreement by April 2010. The summit leaders are poised to tackle several mid- and long-term policy issues, including • Ensuring global economic recovery • Framework for strong, sustainable, and balanced global growth • Strengthening the international financial regulatory system • Modernizing the international financial institutions • Global financial safety nets • Development issues • Currency war Representatives met in advance of the leaders’ summit. These sherpas were tasked to draft a closing statement for the summit. The debate over currency exchange rates and imbalances was reported to have been “heated.” Main focus of G20 Seoul Summit: issues sorted by priority The situation is somewhat different in Seoul as the summit is held in the middle of the ongoing currency dispute among major economies, triggered by the recent monetary easing by the U.S. Federal Reserve. Having accused some countries of creating trade imbalances by artificially keeping the exchange rate at low level, the U.S. declared another round of quantitative easing, citing a need to boost up its sluggish economy.
The move by the U.S., which is an issuer of the current reserve currency, deteriorated the global financial and economic markets, driving other major economies to step into the exchange rate market and deepening the struggle over currency. With the outbreak of currency confrontation, South Korea evidently had to make changes to prioritizing the agenda for the Seoul Summit, placing at the top of list issues relevant to currency or trade imbalance. Accordingly, the discussion session on global economy and the Framework is expected to be heated by fierce debates among leaders, during which the currency issue is sure to be tabled. Other legacy agenda items, such as modernizing international financial institutions and strengthening regulation on financial institutions, will also be tabled and dedicated separate discussion sessions on, but as basic outlines of the issue have been already agreed during previous lower-level meetings, they will remain less critical compared to other topics, said the organizing committee. The leaders will also spend time over development and global financial safety nets system, newly presented by South Korea, adding final touches to the issues in order to include new agreements in the communiquĂŠ. The 2011 G-20 Cannes Summit will be the sixth meeting of the G-20 heads of government in discussion of financial markets and the world economy. The Mayor of Cannes confirmed a projected summit date of November 3â€“4