Deputy Prime Minister and Minister of Strategy and Finance Yoo Il-ho

Korean Deputy Prime Minister and Minister of Strategy and Finance Yoo Il-ho will lead a Korean delegation to the 49th Annual Meeting of the Board of Governors of the Asian Development Bank, to be held in Frankfurt, Germany from May 2 to 5. 

The delegates include the governor of the Bank of Korea and heads and representatives of commercial banks, including Chairman Yoon Jong-kyoo of KB Financial Group, Chairman Han Dong-woo of Shinhan Financial Group, Chairman Kim Yong-hwan of Nonghyup Financial Group, Chairman Kim Jung-tai of Hana Financial Group, President Lee Kwang-goo of Woori Bank, Chairman Lee Dong-geol of Korea Development Bank (KDB), President Kwon Seon-joo of the Industrial Bank of Korea (IBK), Chairman & President Lee Duk-hoon of the Export-Import Bank of Korea. Also participating are representatives of other financial institutions and the financial industry, including Korea Exchange (KRX) Chairman Choi Kyung-soo. Chairman Park Byung-won of the Korea Federation of Banks, Chairman Hwang Young-key of the Korea Financial Investment Association, Chairman Lee Soo-chang of the  Korea Life Insurance Association, and Chairman Kim Keun-soo of the Credit Finance Association.

Over 3,000 finance and development ministers, central bank governors, and other government officials, business leaders, investors, journalists and representatives from civil society will assembly for the 49th Annual Meeting of the Asian Development Bank’s (ADB) Board of Governors at the Messe Frankfurt in Frankfurt, Germany,

The theme of the 2016 Annual Meeting is “Cooperating for Sustainability” and the focus will be on closer Asian and European linkages to support sustainable development. The event, being held in the largest financial center in continental Europe, will also showcase Germany’s own strategy for developing sustainably.

The flagship Governors’ Seminar will examine factors causing the current global growth slowdown and the structural reforms needed to put the world back on a path toward sustained growth. A joint seminar with the International Monetary Fund will look at growing financial links between Asia and Europe, and how the current benefits can be expanded and risks mitigated.

Other panels will assess what’s needed to deliver green, livable cities for the future, the finance and technology required to build resilience to climate change, the steps needed to strengthen Asia-Europe trade and investment, and actions required to produce high quality jobs in developing Asia to support more inclusive growth.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, the ADB will mark 50 years of development in Asia in December 2016. It is owned by 67 members 48 from the region.

Deputy Prime Minister Yoo Il-ho and other participants pose together for a group photo session while attending the G20 Finance Ministers and Central Bank Governors’ Meeting in Washington D.C. on April 15. (Photos:KOSF)

Korea Proposes G20 Closely Cooperate to Deal with Reflexivity

Deputy Prime Minister Yoo attended the G20 Finance Ministers and Central Bank Governors’ Meeting in Washington D.C. on April 14 and 15, where member countries agreed on the importance of “using fiscal policies flexibly” instead of depending too much on monetary policies. They also agreed to promote growth by prioritizing “high quality investment” through growth-friendly public expenditures and tax incentives. 

The meeting participants also agreed to continue strengthening the global financial safety net by “improving the IMF’s lending toolkit” and “through more effective cooperation between the IMF and regional financing arrangements.” Regarding this year’s new agenda, structural reform, “the G20 identified and agreed to the priority areas” based on which guiding principles will be drawn up for countries to refer to.

During the meeting, Deputy Prime Minister Yoo emphasized the importance of preventing reflexivity in financial markets, which resulted in increased volatility even though economic fundamentals remained unchanged. 

The deputy prime minster pointed out that countries need to consistently implement macroeconomic policies focused on recovery while preparing for any possible negative spillovers from the unconventional monetary policies, including negative interest rates. Korea’s deputy prime minister also proposed G20 level discussion to support the development of new growth engines, with a focus on growth-friendly fiscal policies, such as tax incentives, and regulatory reform.

With regard to strengthening the global financial safety net, Deputy Prime Minister Yoo, as one of the G20 IFA working group chairs, proposed improving the IMF’s support system and expanding currency swap arrangements both bilaterally and multilaterally. Deputy Prime Minister Yoo also called for the establishment of a regular channel at the G20 level, which will be used to share experience learned through cooperation between the IMF and regional financing arrangements.

Deputy Prime Minister Yoo held talks with Jacob J. Lew, US Secretary of Treasury and Christine Largarde, IMF Managing Director on April 14 and 15, respectively.

At the talks with the U.S. Secretary of Treasury, Deputy Prime Minister Yoo explained the fact that foreign exchange rates are determined by the market in Korea, and the government’s presence in the market is limited to a sudden FX rate fluctuation through smoothing operation on both sides.

U.S. Secretary of Treasury Jacob Lew responded by saying that the U.S. is interested in the Korean government’s FX policies, and requested more openness.

At the talks with the IMF Managing Director, Deputy Prime Minister Yoo agreed to increase Korea’s contribution to the fund’s Poverty Reduction and Growth Trust (PRGT) program, while sharing the importance of the fund’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) project. Deputy Prime Minister Yoo also discussed increased opportunities for talented Koreans to work for the IMF, in line with an increase of Korea’s quota in the fund.

IMF Managing Director Largarde responded by saying that she will offer closer cooperation in regard to more work opportunities at the IMF for talented Koreans.

Korea, IDB Agree to Strengthen Joint Consultation

Korea’s Deputy Prime Minister Yoo attended the 2016 Annual Meeting of the Inter-American Development Bank (IDB) and Inter-American Investment Corporation (IIC) on April 9, where he discussed strengthening the IDB development aid and as an outgoing chair presided over the election of the next IDB/IIC Board of Governor Chair.

At the Korea-IDB bilateral meeting, Deputy Prime Minister Yoo and IDB President Luis Alberto Moreno agreed to strengthen the KSP-IDB joint consultation projects and work together to develop the ICT sector in the region.

Korea and the IDB have renewed the MOU on the KSP-IDB joint consultation projects. So far a total of 22 KSP-IDB joint projects worth $5.2 million have been implemented. 

Korea and the IDB have also supported development projects in the region by utilizing the Korea-IDB co-financing program: Brazil’s integrated control system construction and Nicaragua’s broadband construction. Korea’s Economic Cooperation Development Fund (EDCF) and the IDB have contributed $25 million, respectively, to Nicaragua’s broadband construction project.

‘Korean Economy,Rising to the Challenge’

Korean Deputy Prime Minister Yoo Il Ho held an IR session for overseas investors held in New York on April 12.

At a presentation titled “Korean Economy, Rising to the Challenge,” Deputy Prime Minister Yoo said the Korean economy will be boosted by overcoming external and internal challenging factors that Korea now faces, as the economy has improved economic fundaments by successfully overcoming a few crises it has undergone so far. 

On global economic trends, Yoo said that countries lowered their growth targets and trade volumes declined due to the delayed recovery of the global economy. Such non-conventional policies as currency devaluations of emerging economies and negative interest rate policies have fueled uncertainties, he said. 

As for the achievements of the Korean economy, Deputy Prime Minister Yoo said, despite unfavorable external conditions, the Korean economy has shown relatively better performances in such macroecnomic indexes as overall growth and its current account.

Korea has enough fiscal and current policy leverage to cope with short-term unstable factors, leading to the international community’s evaluation of Korea as “sound.” 

Deputy Prime Minister Yoo said Korea ranks highly in evaluations of Korea’s mid- and long-term growth potential. The nation ranked 1st for the third straight year in the Bloomberg Innovation Index, and ninth in the digital innovation index by the Harvard Business Review. 

In order to cope with long-term challenging factors, Yoo said Korea will continue to improve economic fundamentals and nurture future growth engines by implementing reform measures in four fields — the labor market, the public sector, education and the financial sector.