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SERI hosts 2009 Korean Economic Forum

June 19, 2009

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SERI hosts 2009 Korean Economic Forum

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With the theme “The Global Financial Crisis and the Korean Economy,” Samsung Economic Research Institute successfully hosted the 2009 Korean Economic Forum on June 19 at the Shilla Hotel. This year marks the third year of this event which is held annually to promote economic awareness and create an opportunity to share views and insights as well as strengthen ties.

In cooperation with JoongAng Daily, SERI invited many distinguished guests including diplomats, CEOs of foreign companies in Korea and foreign correspondents to the forum. Ambassadors from the European Commission, Britain and Brazil, Chairman and CEO of KB Financial Group Inc. Hwang Young-Key, Managing Director of Audi Korea Trevor Hill, SC First Bank’s CFO and Head of Strategy Richard Hill and President and CEO of Chanel YH Robert Stavrides were just some of the honorable guests who attended Friday’s event. SERI also invited the Chairman of the Financial Services Commission, Chin Dong-Soo to be this year’s keynote speaker.

The forum opened with welcoming remarks from the President and CEO of SERI, Chung Ki-Young, and President and CEO of JoonAng Daily, Song Pil-Ho. They were followed by the keynote address given by the Chairman of the Financial Services Commission, Chin Dong-Soo.

The address entitled “Korea’s Financial Policy and Supervision,” focused on the financial crisis and Korea’s response as well as the short- and long-term policy objectives for the future. Mr. Chin described the present crisis as ‘the worst crisis of the century’, and went on to say that although several economic indicators have shown signs of recovery due to the quick and efficient response of the Korean government, we cannot assume that the crisis is totally over. Mr. Chin continued to give an overview of the short and mid- to long-term policy objectives and to conclude, emphasized how important the continuing development of ‘Green Finance’ and ‘Green Growth’ in the meantime was to the future of Korea’s economy.

After the address, presentations by two representatives of SERI were given discussing the effects of the financial crisis on the Korean economy and its future. Hwang In-Seong, a research fellow in the macroeconomics department, gave the first presentation which assessed the state of the Korean economy and the outlook for the future. Dr. Hwang noted that the present financial crisis has led the global economy to post negative growth for the first time since World War II. And although, with the recent rapid rise of the Korean stock market, the Korean financial market has stabilized and the chance of another global financial crisis is eminently smaller, with production continuing to decline and the state of employment worsening, there are remaining risks. Dr. Hwang continued by discussing the importance of the government’s role in facilitating the recovery and the steps that need to be taken.

Vice President at SERI, Lee Keon-Hyok, focused on policy assessments and further recommendations. Dr. Lee stated that due to the timely and aggressive measures taken during the most recent global financial crisis, the Korean government was successful in easing financial instability. He continued to explain that the key to positive GDP growth in the 1Q 2009 was government spending and emphasized that Korea was the only major economy to post positive GDP growth among the OECD countries. However, Dr. Lee went on to say that confidence in global recovery is still at a low and that we must be careful not to follow in the footsteps of the United States and Japan in making hasty judgments but rather learn from their mistakes. In reference to this, Dr. Lee cited Paul Krugman, a Nobel laureate in economics who wrote an article in a recent newspaper. Krugman described how former U.S. President Franklin D. Roosevelt pulled back on New Deal spending too quickly, which led to a second trough in a “W-shaped” economic recovery during the Great Depression. He also referred to Japan’s Prime Minister Ryotaro Hashimoto, who sent Japan back into recession in the late 1990’s after mistaking a temporary economic recovery for the real deal and raising tax levels from 3 percent to 5 percent. In conclusion Dr. Lee discussed additional recommendations including the need to maintain a stimulative policy stance until recovery solidifies as well as various other policy recommendations.

Finally the forum rounded off with a lively Q&A session where the audience had the chance to grill panelists on various matters concerning their presentations. Questions were asked by ambassadors and CEOs alike ranging from the effects of the financial crisis on Korea and Asia as a whole to forecasts on the exchange rate of the euro and the won for the near future. With such an abundance of questions from the eager participants, the session had to be cut short due to the time.

*Please find the attached materials presented during the meeting
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