Ladies and Gentlemen, Distinguished business leaders,

It is a great pleasure to see you here in Los Cabos, and to find so many familiar faces from the Seoul and Cannes B20 Summit.

As I stand here today, it is wonderful to see that the Business Summit, which was initiated in Seoul, continues to evolve as a meaningful and influential event.

I thank President Ramirez of the Mexico B20 Organizing Committee, President Worms of the International Chamber of Commerce (ICC) and the co-chairs of the taskforces for their tireless efforts in preparing for today’s event.

Distinguished business leaders,

For the past four years, the global economy has encountered a series of economic crises.

Before we could recover from the 2008 global financial crisis, we were hit by the European sovereign debt crisis.

Recently, tensions are mounting around the world, as uncertainty surrounding the eurozone escalates with the delays in Greece’s structural reform and the weakness in the Spanish banking sector.

I believe that close international cooperation within the G20 is critical to overcoming these ongoing crises.

Back in 2008, the G20 countries prevented the global economy from falling into a depression through policy coordination among nations, including the expansion of fiscal spending and a standstill on protectionism.

At the Mexico Summit, the most important question the G20 leaders must ask themselves is “How do we overcome the eurozone crisis?”

Countries within the Eurozone are proposing different solutions and outside of Europe there are differences in opinion between the advanced and developing nations.

In an era, where the world is so closely connected, no country is immune from the rising risks. For this very reason, the G20 leaders must actively engage in discussion and reach an agreement.

As for the solution to the crisis, the world is divided between growth measures vs. austerity measures. Growth and austerity do not necessarily contradict one another. Governments must balance both fiscal discipline and growth, depending on the circumstances of each country.

I believe that the countries in crisis should take the initiative and firmly pursue structural reforms to fix their own problems-even if those reforms maybe painful and politically unpopular in the short term.

During the 1997 Asian Financial Crisis, Korea also experienced massive corporate bankruptcy and unemployment. But through decisive structural reforms, we were able to rapidly regain market confidence and strengthen our economic fundamentals.

Along with such efforts, the eurozone, from a regional perspective, should more actively discuss reforming the eurozone system itself and reach a concrete conclusion at the earliest possible date.

The eyes and ears of the world are focused on the EU Summit slated to be held June 28-29.

If reforms stall, the Eurozone will remain the source of economic instability around the world.

Yesterday, the world watched the Greece election results with anticipation. I hope that the outcome of the election will be conducive to overcoming the Eurozone crisis.

The G20 will also strive to support the resolution of Europe’s crisis and accelerate global economic recovery. We will do this through adjusting the pace of fiscal consolidation by countries with fiscal space, preventing trade protectionism and strengthening global firewalls, among other measures.

Fortunately, global oil prices have stabilized; however, it is highly uncertain how long this will last.

In order to prevent high and volatile commodity prices such as oil from impairing the already staggering global economy, we will step up our efforts to balance supply and demand and prevent speculation from distorting the market.

As for Korea, we will actively engage in such policy cooperation, and spearhead efforts to create a better global economic environment in which you can confidently make investments and do business.

Distinguished business leaders,

As we pass through one crisis after another, many are concerned about the negative consequences resulting from a market economy system. At times like this, I believe it is important to move away from passively “managing” crises, and advance towards pre-emptively “preventing” them.

As you are well aware, creating jobs is critical if we wish to move beyond short-term recovery to restore confidence in the market and achieve sustainable growth.

In this respect, I fully agree with your recommendation that “growth in jobs is a critical bridge between economic expansion and poverty reduction.”

Despite this need to create jobs, unfortunately, we are seeing a decrease in the number of jobs around the world due to the ongoing economic crisis.

According to the International Labor Organization (ILO), approximately 27 million people have lost their jobs since the 2008 crisis, and currently about 200 million remain unemployed worldwide. Youths make up one-third of this group, undermining economic dynamism and incurring social unrest.

I believe that the business sector has the most important role when it comes to creating jobs.

Even with the best government policies, jobs cannot be created unless companies invest and grow.

I stressed this point in Cannes last year and would like to once again highlight the very important role of businesses and business-friendly policies of governments play in creating jobs.

As emphasized in the B20 Task Force recommendations, “Employment rests on a return to confidence on the part of businesses and investors.”

I believe that relaxing regulations will encourage businesses to invest more and create jobs, even in the midst of this global crisis.

As I mentioned last year, the Korean government established the ‘Presidential Council of National Competitiveness’. The committee members, who include CEOs of domestic and foreign companies, have been working together with the government to boldly abolish unnecessary regulations that hinder entrepreneurial activities.

For example, we’ve simplified the process for opening new businesses (from eight to two stages), shortened the approval period for industrial complexes (from two to four years to six months), and abolished the minimum capital requirement for corporations.

As a result, renowned institutions including the World Bank and Swiss International Institute for Management Development (IMD) have acknowledge that Korea’s business environment and international competitiveness have been substantially enhanced.

The Korean government will continue to place priority on improving the business and investment environment in Korea and pursuing regulatory reform.

Distinguished business leaders,

We must steadily pursue structural reforms in order to create jobs through economic growth.

Faced with the global trend of “jobless growth”, governments are struggling to ensure that growth and job creation go hand in hand.

Green industries offer a viable solution, as it creates new jobs and drives growth while protecting the environment.

Despite the global financial crisis that began in 2008, Korea has been increasing investment in green industries as new engines of growth.

As a result, Korea’s green businesses including new and renewable energy, secondary battery, green transportation and water infrastructure have created nearly 750 thousand jobs in the past three years.

Tackling the issue of youth unemployment is critical, if we want to ensure continued development in the future.

As I mentioned before, youth unemployment poses a challenge for countries around the world.

The young people are the main productive force of our society. For our societies to continue to grow and develop, we must address youth unemployment.

Despite the global economic crisis, Korea maintains one of the lowest youth unemployment rates among OECD member countries. However, there are structural factors, unique to Korea, which makes it difficult to solve youth employment.

Let me explain. In Korea, around 80% of high school graduates—one of the highest in the world—go on to receive higher education.

While there are sufficient numbers of highly-educated workers in the market, many businesses are having a hard time finding those with the vocational and technical skills they are looking for.

To address this mismatch, for the past several years, the Korean government has been concentrating on and supporting the development of high schools devoted to “specialized” vocational training and the so-called ‘Meister Schools’ that focus on producing technical experts.

These high schools have successfully attracted many talented students. The graduates from these schools are actively sought by many businesses, offering us new hope in resolving youth unemployment.

Jobs can also be created by opening the external sector via trade and foreign investment liberalization.

I believe opening doors and supporting companies to expand their markets becomes more important the deeper you are in a crisis. A free and open investment environment should be promoted for both foreign and domestic investors.

Accordingly, Korea has been expanding its scope of free trade by signing Free Trade Agreements with partners such as the European Union and the United States. Today, Korea is part of a global network of 45 countries that represent 61% of the global GDP.

The effects of FTAs have already materialized. Although the overall trade volume with Europe has declined due to the eurozone crisis, bilateral trade of tariff-cut items has substantially increased.  Mutual investment between Korean and the EU has also greatly expanded since the Korea-EU FTA went into effect.
 

Distinguished business leaders,

Today, countries around the world are concerned with ‘polarization’.

While we are seeing growth on one hand, there is also deepening disparity between the haves and have-nots on the other hand. As a result, more and more citizens are expecting the government and businesses to play a greater role in addressing the widening gap.

We must collectively address this issue, if we are to sustain the market economy, as widening income gap can lead to political and social unrest.

Korea has been relatively successful in overcoming the global economic crisis and maintaining growth since 2008. Although we have been able to greatly reduce polarization, there is still much room for improvement.

To address this challenge, the Korean government has made ‘shared growth’ a national policy and established ‘the Commission on Shared Growth for Large corporations and SMEs’. The committee is comprised of government officials and CEOs of large corporations and SMEs, works to find ways to promote fair transactions between large corporations and SMEs and achieve win-win growth through mutual cooperation.

The government is striving to realize ‘shared growth’, but more importantly, in order for ‘shared growth’ to take root as a ‘sustainable culture’ the voluntary participation of businesses is much needed.

I’m sure that the CSR activities that your companies are carrying out will greatly contribute to alleviating polarization.

In this respect, I believe the theme for this year’s B20 Summit “Social challenges and Corporate Responsibility’ is very timely and meaningful.

I sincerely applaud the various CSR initiatives your companies are undertaking to achieve mutually beneficial cooperation. .

As the corporate culture in Korea continues to evolve, many more of our companies are doing their utmost to become responsible corporate citizens. Let me share two such examples with you.

The first involves large business and commercial banks providing support for microfinance.

Korea was able to secure lending sources through the strong support of large businesses and the dormant deposits of large commercial banks. This helped launch a nationwide microcredit service (Smile Microcredit Bank) for the working class. Through this service we have been able to assist hard-working citizens to get back on their feet by providing them the opportunity to start their own businesses.

Globally recognized as an exemplary model, this service serves as a good reference for formulating policies on financial inclusion at this G20 summit.

The second involves large businesses and SMEs working closely together to spur innovation.

The assistance provided by many leading Korea businesses such as support in R&D investment and technology transfer have helped cut costs at SMEs.

This system offers SMEs incentives for innovation, and also provides large businesses with the opportunity to procure supplies at lower costs.

These examples show the synergy that can be created through ‘shared growth’ and innovation.

Distinguished business leaders,

I believe realizing this vision for ‘shared growth’ is imperative, if we are to realize sustainable and balanced global growth.

With the goal of realizing ‘growth for all’, the G20 has closely coordinated policies so that the benefits of global growth can ultimately be felt by individual countries.

Today, developing countries have become an important engine driving world economic growth. As such, I believe supporting developing countries will benefit all of us, not just a certain group of countries.

Korea has move beyond merely providing financial assistance to developing countries. We are sharing our development experiences and knowledge so that these countries can propel their own growth and contribute to the global economy.

The private sector has already made great contributions. However, I believe that we can more effectively assist developing countries if the private sector takes a greater interest in expanding the production infrastructure and fostering human resources of developing nations based on their deep understanding of the local market.

Distinguished business leaders,

I am confident that we can overcome the current global economic crisis.

How we collectively resolve the crisis, is more important than the crisis itself.

At times like these, I believe it is important for business leaders and policy-makers to engage in discussions and cooperate. As global business leaders, you will have undoubtedly experienced numerous crises throughout your careers. But each time, with bold determination and action, you came through, to build world-class global enterprises. This is why the G20 countries highly value your recommendations and input.

I would like to commend the B20, a valuable partner of the G20, for all your efforts in overcoming the global economic crisis and hope that the Business Summit will continue to grow and prosper.

I would like to once again thank all the business leaders for joining me, despite your busy schedules.

Thank you