G20 leaders adopt Seoul Consensus Saturday, 13 November 2010 02:47

Seoul: The G20 Seoul Summit ended yesterday afternoon with the announcement of the much-awaited Seoul Consensus that addressed the hotly-contested issue of currency & foreign exchange rate. Twenty leaders from the world’s richest countries, promised to adopt the Seoul Action Plan, composed of a comprehensive, cooperative and country-specific policy actions, to ensure an unwavering commitment to global economic cooperation.

As part of the Seoul Action Plan, G20 countries reinforced the result of the Finance Ministers and Central Bank Governor’s meeting last month by approving a market-determined exchange rate system and refrainingfrom competitive devaluation. The Seoul Action Plan also called for the implementation of structural reforms that boost global demand and foster job creation by reducing trade barriers and simplifying regulation.

“We agreed to work towards early conclusion of the Doha Development Round and reaffirmed our political commitment. We also decide to push ahead with negotiations keeping in mind that 2011 maybe our window of opportunity. And we reaffirmed our commitment for trade liberalization. Trade liberalization creates jobs,” South Korean President Lee Myung-Bak said during a press conference right after the Seoul Summit negotiations concluded.

The two new agendas of the summit which are the creation of a global financial safety net and the issue of development put forth by South Korea during the summit were also included in the Seoul Consensus. The G20 eased IMF lending terms and introduced a multi-country flexible credit line (FCL), which will allow the simultaneously lending to multiple countries jointly facing crisis.

“In this open, global financial system, capital moves very rapidly so even economies with strong fundamentals could be destabilized…Improvements in IMF lending facilities will alleviate the stigma effect stemming from IMF lending facilities,”Lee said.

In terms of development issues, the Seoul Consensus focused on resolving nine significant bottlenecks to growth in developing countries which are infrastructure, human resources development, trade, private investment and job creation, food security, growth with resilience, financial inclusion, mobilization of domestic resource and knowledge sharing by applying concrete measures through the Multi-Year Action Plan on Development.

South Korea has often emphasized the need to assist developing countries in a more meaningful and sustainable manner by helping develop their economies.

“G20 countries take up 85 percent of the world GDP but there are 170 countries that are not members of the G20 and most of them are developing countries so the government of the Republic of Korea has set the theme of this summit as ‘Shared Growth, Beyond Crisis’ and we have made efforts to open our ears to the developing countries,” Lee said.

Lee added that the Seoul Consensus which adopted today continues active aid to developing countries and introduces new development strategies for closing development gaps and encouraging the developing countries to secure their own growth potential and develop local capacity.

Despite its rocky start, President Lee was pleased that the G20 leaders were able to deliver on all the commitments made during the Toronto Summit. France will host the next G20 Summit in Cannes in November next year.

The peninsula