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Issue Report

Collection of full-length papers and in-depth analysis of economic and management issues.

The 3rd G20 Summit: Main Agendas and Implications

The 3rd G20 Summit: Main Agendas and Implications

KWAK Soo-Jong

Nov. 10, 2009

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Originally released on September 24, 2009

ABSTRACT

The launch of the Group of 20 summit came laden with drama. The world economy, plunging after the bankruptcy of Lehman Brothers in September 2008, began an inspiring turnaround immediately after the inaugural G20 gathering in Washington D.C. on November 15, 2008. The economic rebound came as the global economy responded gradually but positively to the outcome of the summit, which focused on how to restore market trust in the global financial system. By the time London hosted the second G20 summit in April 2009, the global financial market had righted itself somewhat and full discussions shifted toward reforming the financial market structure and recovery in the real economy.

The first and second G20 summits marked four types of actions. First, the G20 focused on addressing shortcomings in regulation and supervision, a culprit that caused the global financial crisis, and on restoring trust by strengthening market transparency and responsibility. Second, a consensus was reached about reforming international financial organizations such as the World Bank and the International Monetary Fund, which failed to preemptively foresee the global financial crisis and failed to present an appropriate solution thereafter. Third, G20 countries reached an agreement to coordinate their economic stimulus policies, which were aimed at promoting fast recovery of the real economy. Fourth, amid the continuing economic slump, ongoing talks ensued over a variety of issues, including wariness about excessive protectionism of domestic markets, the widening gap in development between industrialized countries and developing countries, and maintenance of international community support for least develop ed countries.

Discussed at the recent third G20 summit held in Pittsburgh were the aforementioned issues plus three new major issues - how to address the global imbalance and exit strategies, how to build an international cooperation system with respect to an exit strategy, and how to respond to climate changes. The issue related to the maintenance of the US dollar as the main international currency, raised by China, seems to have been discussed more in depth at the annual general meeting of the IMF and the World Bank held in Istanbul, Turkey.

Although in-depth discussions about these issues were not made at the third G20 summit, enough issues were raised to warrant attention at the upcoming fourth and fifth G20 summits. Amid expectations that the global economic crisis would enter a full recovery phase in 2010 and thereafter, a new era of cooperation and competition is coming between industrialized countries and emerging developing countries, with the global governance facing new challenges and changes in the 21st century post-industrial era.

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