Q1: Why is President Obama going to Asia?
A1: The administration has indicated that the president intends to focus on economics during his second trip to Asia. While in Mumbai, Obama is scheduled to address the U.S.-India Business and Entrepreneurship Summit. In Indonesia, it is predicted that he will stress the Islamic country’s growing role in the international economy and in the fight against religious extremism. In Seoul, he will be joining other leaders at the G-20 Summit to discuss issues of international economic significance, such as the global financial crisis, currency revaluation, development, etc. Following the G-20 Summit, the president will fly to Japan for the 18th APEC Economic Leaders’ Meeting.
Q2: Why is it significant that Seoul is hosting the upcoming G-20 Summit?
A2: As host of the 2010 G-20 Summit, South Korea will be making history on multiple accounts. It will be the first non–G-7 member state, as well as the first “emerging” economy, to chair the summit. South Korea will also be the summit’s first non-Anglophone chair. All of these “firsts” signify an expansion of the G-20’s focus, from one resting solely on collective action during the global financial crisis to including international support for developing economies. Having transitioned in a mere 60 years from a developing country to the 15th-largest economy in the world, South Korea is the model “rags-to-riches” story for other developing nations. As a recipient-turned-donor of international development aid, South Korea’s growing strength in the global market reflects the reciprocal effects of official development assistance, and it is likely that the country will use itself as an example at the summit to emphasize the importance of global development projects.
Q3: What is on the agenda for this G-20 Summit, and how will it be different from its predecessors?
A3: The Seoul G-20 Summit has set out four agenda initiatives: to ensure the continuation of recovery from the global financial crisis; to forge an agreement on a comprehensive policy action plan to lead the global economy toward stable, balanced growth; to reform and strengthen the global financial regulatory system to maintain growth and avert future crises; and to modernize and reform international financial institutions, such as the IMF. The Seoul G-20 will go beyond its predecessors in addressing development issues and ensuring follow-through on its commitments. A working group for development policy was established at the Toronto G-20, with South Korea as one of the cochairs. Through this working group, South Korea has pledged to enact a detailed development agenda with a multiyear action plan. This plan is set to be ratified by the G-20 at the close of the Seoul Summit.
Q4: What is the major concern that Pacific Rim G-20 members (China, Indonesia, Japan, and South Korea) will voice at the Seoul Summit?
A4: The most heated summit issue to affect the region, especially China, is the forced revaluation of currency. At a recent G-20 meeting in Gyeongju, Korea, the finance ministers of participating states agreed to move toward “market determined exchange rate systems” and refrain from “competitive devaluation of currencies,” though they were unable to agree on any sort of numerical guidelines to deal with imbalances. For the time being, these actions seem to have staved off fears of a potential U.S.-China currency war. However, exactly what constitutes “market intrusive” monetary policy and consensus on a standard surplus/deficit–calculation method remain elusive as the G-20 members head to the Seoul Summit.