(ROUNDUP) Lee widens role in fighting crisis through ASEM diplomacy

By Yoo Cheong-mo
BEIJING, Oct. 24 (Yonhap) -- South Korean President Lee Myung-bak, on a three-day
visit to China to attend the biennial summit of the Asia-Europe Meeting (ASEM),
vigorously called for concerted global efforts to combat the worst financial
crisis since the Great Depression of the 1920s through his bilateral and
multilateral summit talks with Asian and European leaders on Friday.
Lee opened the day with a group breakfast meeting with leaders of China, Japan
and 10 member states of the Association of Southeast Asian Nations (ASEAN),
seeking to orchestrate closer regional cooperation in the face of the worsening
U.S.-originated financial crisis.
The leaders of the so-called ASEAN Plus Three countries eventually came up with
an agreement to create an US$80 billion joint fund by next June and to push for
the establishment of a regional economic surveillance organization to ensure
greater financial stability in the region.
"Lee, Chinese Premier Wen Jiabao, Japanese Prime Minister Taro Aso and 10 ASEAN
leaders agreed on the need to beef up regional cooperation and policy
coordination in the face of the global financial crisis," Lee's spokesman, Lee
Dong-kwan, said in a press statement.
The spokesman also noted that the East Asian leaders agreed to actively
participate in various international efforts to stem the spread of the
U.S.-originated financial crisis.
ASEAN members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, Thailand and Vietnam.
The so-called "ASEAN Plus Three" fund, if created as planned, will replace the
current Chiang Mai Initiative, which came into being in 2000 in the wake of the
Asian financial crisis to facilitate mainly bilateral currency swaps.
The East Asian countries began discussions in 2006 on transforming the Chiang Mai
Initiative into a more powerful and multilateral reserve pooling mechanism and
reached a preliminary agreement in May this year to create a foreign exchange
reserve pool of $80 billion.
The preliminary agreement called for South Korea, Japan and China to provide 80
percent of the Asian monetary fund, or $64 billion, with ASEAN members promising
to provide the remaining $16 billion.
Spokesman Lee told reporters after the breakfast meeting that finance ministers
and central bank heads of the ASEAN Plus Three countries are planning to meet
next month to discuss specific details of the $80 billion fund scheme and other
measures to deepen regional financial cooperation.
President Lee went on to hold a series of bilateral summit talks with leaders of
Japan, Vietnam, Denmark and Poland and stressed again at the meetings that all
countries across the world should strictly abide by the principles of the free
market economy and refrain from resorting to protectionist trade policies.
Notably, Lee and Japanese Prime Minister Aso agreed to cooperate more closely to
combat the global financial crisis and accelerate the denuclearization of North
Korea during their first summit talks.
Lee and Aso also agreed to pursue a "mature partnership" between South Korea and
Japan and resume bilateral shuttle summit diplomacy, long suspended following the
outbreak of bilateral territorial and historical conflicts earlier this year.
Under the agreement to resume shuttle diplomacy, Aso agreed to visit Seoul in the
immediate future, possibly early next year.
In addition, Lee and Aso agreed to hold the first tripartite summit talks
involving China in the Japanese city of Fukuoka in the middle of December to
discuss closer policy coordination on the global financial crisis, climate change
and energy issues, according to spokesman Lee.
The first tripartite summit of South Korea, China and Japan was to take place in
September, but was put on hold due to a leadership change in Tokyo and Japan's
provocative claim to South Korean islets of Dokdo.
On Friday evening, Lee gave a keynote speech at the opening session of the ASEM
summit, calling for overhauling the roles and functions of the International
Monetary Fund (IMF) and the World Bank in order for the world to overcome the
current financial turmoil and prevent the recurrence of a similar crisis in the
future.
Lee also asserted that emerging Asian economies should be allowed to reflect
their positions in the restructuring of the international financial
organizations.
"The existing international financial system did not function properly because it
failed to keep pace with globalization, revolutions in information and
technology, as well as the rapidly changing international economic environment in
general," said Lee.
"In light of this, we hope to see discussions take place that will strengthen the
role and function of the IMF and the World Bank, whereby we will have an improved
mechanism equipped with an early warning and surveillance system, effectively
warning us of possible dangers."
The biennial ASEM summit opened in Beijing Friday, with the global financial
crisis the key focus of attention among participating leaders of 43 member
nations and heads of the European Commission and the ASEAN Secretariat.
ASEM nations account for roughly 60 percent of the world's gross domestic product.
Before concluding the speech, Lee expressed high expectations for the Group of 20
summit slated for mid-November in Washington D.C., saying that the upcoming
summit meeting is expected to generate "substantive and productive" results
through closer consultations between emerging and advanced economies.
ycm@yna.co.kr
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