In December 2009, members of the Green Bicycle Volunteers perform a ceremony wishing for the success of the G‐20 Seoul Summit

Leaders of 20 of the world''s leading and emerging economies, known as the Group of 20, will descend on Seoul in November this year. The summit is expected to serve as an opportunity to evaluate the state of the global economy and the new world order. At the Davos Forum held in January, the President once again reminded world leaders of Korea''s presence on the world stage. Here, KOREA takes a look at the significance of the G‐20 Summit in Seoul, its preparation and its agenda, while trying to predict in which direction global leadership is headed.

The 40th World Economic Forum in Davos, Switzerland, was an occasion to reaffirm the shifting of global leadership of the world order from a Group of Seven to a Group of 20. the President and French President Nicolas Sarkozy agreed in their speeches that pressing global economic issues should be discussed at the G‐20 Summit.

By virtue of hosting the conference, Korea has seen its national profile and prestige rise substantially. In his address on January 27, President Lee won popular support after proposing the agenda for the November meeting. His plan includes fully implementing past G‐20 agreements: efforts to reduce gaps in international development and forming a global financial safety net; offering outreach to nonmember developing nations and holding business summits. The 21st Century Security Agenda Committee forum suggested an “Empowering G‐20,” arguing that during the G‐20 Summit in Seoul, a separate meeting of high‐ranking security officials should be staged. The committee also said the G‐20 should take the opportunity to become a forum that deals not just with economic and financial issues, but non‐traditional security issues as well.
 

SHIFTING THE CENTER OF GLOBAL GOVERNANCE

World leaders at the London Summit 2009

The global head table has expanded to 20, as the center of global governance has shifted. When the consensus was formed that the G‐7 structure would not be sufficient to overcome the global financial downturn in 2008, the G‐20 was born. And at the Pittsburgh meeting in September 2009, when Korea was selected as the next host, the G‐20 was also chosen as “the premier forum” to discuss global economic issues. The crisis made a new governance structure necessary. Amid disputes surrounding the change �� some developed nations preferred the G‐8 structure while France led efforts to form a Group of 14 �� everybody settled on the G‐20.

Thanks to the shift to a Group of 20, born of the economic crisis, Korea now stands directly in the middle of the restructuring of global governance. The G‐8 countries used to account for nearly 80 percent of global productivity, but now the figure has dropped to around 50 percent. Problems have arisen that developed nations alone can''t solve. The role of Korea as the “bridge” between the developed and the developing countries is beginning to be noticed.

At the Pittsburgh Summit, the President said, “It was agreed that unprecedented cooperation between developed nations and new powers will be most effective in resolving a wide range of problems related to the economy.” His words served as a reminder to the degree of change global governance has undergone. A successful hosting of the G‐20 Summit is expected to have virtually the same effect as cohosting the 2002 FIFA World Cup.

Considering the economic sway of the G‐20 nations, which account for 85 percent of the world''s gross domestic product, the G‐20 Summit in Seoul is slated to be the largest international conference ever staged in Korea. Whereas previous international meetings were festivities‐oriented, the G‐20 Summit this year will have concrete discussions on overcoming economic problems.

GLIMPSE INTO THE SEOUL SUMMIT

Referring to the seating plan at the dinner during the G‐20 Summit in London in April 2009, the British newspaper The Guardian said it was carefully planned diplomatic artistry. Prime Minister Gordon Brown, the host, was flanked by Indonesian President Susilo Bambang Yudhoyono and Chinese President Hu Jintao. Sitting across from Brown was Saudi Arabian King Abdullah. The overall seating plan reflected international relations and Britain''s own interests. It was an example showing the rising status of the emerging powers and also the diplomatic skills of the UK.

The G‐20 Summit in Korea will be the largest event the nation has ever held. Aside from the leaders of the G‐20 members, representatives from ASEAN and Africa, plus chiefs of the WTO, OECD and IMF, among other multinational agencies, will be in attendance, bringing the number of world leaders to about 30. More than 2,000 officials will accompany these heads of state and agencies. Counting the members of the press, attendees will number about 20,000. The G‐20 members include the G‐7 states �� the US, UK, Germany, France, Japan, Canada and Italy �� as well as Korea, Russia, China, Brazil, Australia, South Africa, Mexico, Saudi Arabia, India, Argentina, Indonesia, Turkey and the chair nation of the European Union. Up to 130 billion won (US$113 million) could be necessary to run the summit. The budget for security alone will reach about 27 billion won (US$23.4 million).

KOREA TO SERVE AS THE BRIDGE

The President, left, delivers a key speech at the World Economic Forum in Davos, Switzerland, in January 2010

The President and the Korean government will, as the chair, focus on acting as the “bridge” between the developed nations and the developing ones. As the mediator between these two forces, Korea is known to have prepared ambitious plans to lead efforts to overcome the ongoing economic crisis and to establish the new economic system afterward. In that context, the most important item on the agenda at the Seoul Summit will likely be the new world economic order that the countries should adhere to after the crisis. In addition, issues that have been previously discussed �� such as sustainable growth, reforming international agencies and strengthening the global financial market �� could be included.

However, considering the establishment of the G‐20, there will be tight competition for control between the developed and the developing nations, and even among the powerful states themselves. From the start, the G‐7 states were worried that the presence of new rising powers in the G‐20 setting would compromise their vested interests. Meanwhile, these emerging states pointed out that the G‐7 was losing its ability to lead and govern the international community, and they are demanding that the membership be expanded to reflect the increased

clout of the emerging countries.

Changes to the relationship between the US and the EU, which once had strong ties, may be another reason that the G‐20 will have struggles before reaching consensus. As European nations worked toward integration, friction occurred in some areas between the US and Europe.

Against this backdrop, the future of the G‐20 will likely see a battle for power among the United States, the EU and China, as the emerging powers call for their share of the pie. The working dynamics will likely be quite complicated.

The possible agenda for future G‐20 summits could mean even more struggles. With regards to “sustainable growth,” the US and China could be at loggerheads over reducing the US trade deficit. To improve its trade balance, the US wants a revaluation of the Chinese yuan. But China has yet to give a definitive answer. The developed and the developing countries could also wrangle over reforms at the IMF and World Bank.

Climate change is another tough issue. The 15th Conference of Parties to the UN Framework Convention on Climate Change in Copenhagen ended with a political declaration instead of an agreement. The participants also failed to reach a conclusion on their reduction targets or the sharing of financial aid. So the goal for Korea to act as a bridge at this year''s G‐20 Summit is a challenge and a good test of its mediation and coordination skills. The success of the Summit is directly tied to Korea''s standing in the international community.

“Hosting the G‐20 Summit means that Korea is now in a position to restructure the world economic system,” says Shin Je‐yoon of the Ministry of Strategy and Finance. “If Korea can successfully act as the bridge, then it will help raise our international profile.”

Yoon Deok‐ryong of the Korea Institute for International Economic Policy says, “The year 2010, with Korea as the chair, is the crucial year for the G‐20 to really become true governors ... Korea is at the forefront of the historical change.”

Lee Dae‐ki, a researcher at the Korea Institute of Finance, adds, “We need to work through differences on these sensitive matters and seek ways to implement agreements.”