OECD Sec.-Gen. Gurria: "Korea Has a Long Way To Go to Integrate Itself Into the Global Economy"
President Roh Moo-hyun (right) talks with new Secretary-General Angel Gurria of the Organization for Economic Cooperation and Development (OECD) at Cheong Wa Dae on Sept. 21, 2006. At the meeting, Pres. Roh gave high marks to the organization's contribution to the development of Korea's socioeconomic systems over the past 10 years, noting that the OECD has helped lift the standards and enhance the norms of Korean society.
"Despite its stellar economic growth in the past few decades, Korea has a long way to go to integrate itself into the global economy," said OECD Secretary- General Angel Gurria at an international conference in Seoul marking the 10th anniversary of Korea's entrance into the organization, OECD, on Sept. 22, 2006. "Although Korea has become increasingly open since the [Asian financial] crisis, some measures suggest the extent of its integration in the world economy is relatively low," said the OECD Secretary- General. He also expressed concern about what he called the somewhat xenophobic business tendencies here, saying, "There are signs that the growing foreign presence in the economy has raised concerns among the public. The amount of inward foreign direct investment in Korea is the second lowest in the OECD, at around 8% of gross domestic product." While Gurria praised the "Vision 2030 Plans," Korea's mid- and long-term plan to boost the economic growth potential and social welfare, he advised Seoul to "avoid the mistakes of some OECD countries, where public social spending and high tax burdens have created work disincentives and poverty traps." In his inaugural speech, entitled "A Vision for Korea: Laying the Foundations to Join the Most Advanced Countries in the World," Gurria said, "The OECD brings together 30 countries sharing a commitment to democratic government and the market economy. National experiences are analyzed, best practices are identified and, in some cases, international standards and rules are developed and implemented." During the conference, they decided to explore a different set of issues concerning "globalization" not only because of OECD's outstanding expertise on "globalization," but also because of the issues that simultaneously confront both the international and Korean communities. The globalization, brought on by IT technique development and knowledge expansion, technique innovation, and global economic integration issues, has created many beneficial effects, which both communities cannot repudiate like the spreading of the market economic system, and the issues pertaining to bordershifting. On the other hand, these globalization issues have been challenging because it has created many detrimental effects upon both communities like the bipolar issue, the expansion of the gap between the rich and the poor issue, the aged society issue, and the job growth issue. Korea is an example of a country that benefited from globalization. For instance, Korea now boasts a high-degree intelligence communication network, and an abundant user-population of communication machinery. As a result, Korea may legitimately be called an IT power. Gurria said that Korea should not miss its opportunity to seal a free trade agreement (FTA) with the United States. In a breakfast meeting in Seoul, he called for Korea to grab the chance to increase exports rather than have fear of signing an FTA with a large nation. At the meeting, the OECD chief also said, "There are a large number of FTAs springing up around the globe and I urge Seoul to seize the opportunity, which may only exist now. Mexico's exports have jumped fivefold since it joined the North American Free Trade Agreement (NAFTA) in 1994, especially in manufacturing, which increased 10 times." The conference was attended by more than 200 representatives from domestic and foreign political, business and academic communities. At the meeting, the participants made an evaluation of the current Korea-OECD cooperation and exchanged views on how to boost bilateral collaboration in the future.
During his official visit to Korea, Secretary-General Gurria met with Korean leaders, including President Roh Moo-hyun, to discuss ways of strengthening the relationship between South Korea and the organization. President Roh congratulated Secretary- General Gurria on his election as the head of the OECD. Roh also gave high marks to the organization's contribution to the development of Korea's socioeconomic systems over the past 10 years, noting that the OECD has helped lift the standards and enhance the norms of Korean society. He went on to say that the country would continue to closely work together with the OECD in the years to come. Gurria expressed gratitude for Korea's full support for his election to the top position in the OECD. He also said that he would make proactive efforts in seeking out various measures of collaboration in the future based on the close cooperative ties between Korea and the OECD, which have been built over the years. The OECD head made a high evaluation of Korea's economic success, which has transformed the country from a beneficiary of international aid to a provider of aid in just a generation. He also praised Korea for being one of the exemplary key member countries of the OECD. He said that cooperation with Korea over the last 10 years has been conducive to the progress of the organization. Citing the experience of Mexico, his home country, as an example, Secretary- General Gurria lauded President Roh's initiative on the Korea-U.S. free trade agreement as a very difficult yet momentous decision. He advised Pre-sident Roh to stay the course through any difficulties ahead and resolutely press on with the initiative. Buoyed by a strong export performance, Mexico's employment improved, touching off an explosive increase in jobs in the export sector. NAFTA has been instrumental in helping Mexico tap into advanced technologies and management techniques, raising the country's international credit rating and thereby attracting foreign investment. The Mexican government's reform efforts have also benefited from the implementation of the free trade agreement. In connection with the OECD program of giving assistance to developing countries, President Roh said, "The South Korean government is doing its best to play an important role in the program befitting its economic status in the global community. The government is working toward reaching a national consensus for expanding its contribution to the OECD program."
"We, the Korean government, have a high regard for the OECD as one of the most trustworthy and wisest economic policy counsels. We take the OECD recommendations seriously and integrate them into our own policies as and when appropriate," said Dr. Kwon O-kyu, South Korean Deputy Prime Minister and Minister of Finance and Economy. "How we can strengthen partnership between Korea and the OECD?" In his welcoming address on Sept. 22, 2006, at the Hotel Lotte, Kwon said, "Korea has been successfully adjusting to the new environment of the OECD. "We will actively participate and take the lead in discussing the challenges and establishing the order of the world economy. We will not stop learning from the experiences of developed countries within the OECD framework. "The world is fast becoming one community. So much so, the challenges of the Korean economy are often-times the challenges of the global economy. I do not think that expanding growth potential, raising productivity, resolving economic polarization, population ageing and low fertility are foreign concepts to other member countries," said Kwon. "There is no doubt that globalization and informatization have improved the efficiency of the world economy. At the same time, it has brought about concerns on widening disparity between individuals and between nations. New emerging markets led by BRICs are changing the horizon of the world economy. Policy interest in the quality of life such as public health and environment is also increasing, which I think is relevant and important. "Now, the new changes are calling for the OECD to do more. The Secretary- General has stressed the enhanced role of the OECD in tackling the new challenges such as public health since he took the post. It fits well with the new expectations for the OECD, in my view," said Kwon. "Clearly, the OECD enjoys many strengths. They have abundant policy experiences and knowledge of member countries, systemic and expert analytical skills, and the inter-disciplinary policy research system encompassing the entire socio-economic field. "Taking the best advantage of its many merits, the OECD should take the lead in helping the international community collectively cope with the new challenges. The OECD should step up its efforts to stay relevant with regards to global challenges. "We will certainly assume the role commensurate with our economic status in the international community. There are several concrete ways to do so that I can share with you today. One area is official development assistance (ODA). We will make efforts to raise public awareness and support of expansion of ODA. Second, we will introduce the Solidarity Contribution on Airplane Tickets and muster all we can in eradicating poverty and disease in the world," said Kwon.
This year marks the 10th Anniversary of Korea's accession to the OECD. There is a proverb in Korea which states, "Ten years is an epoch." This proverb accurately represents the state of Korea's economy since its membership to the OECD because in the last 10 years Korea's system and its conformance to transparency and international standards has dramatically developed and changed. Comparing Korea's economic index of 1996 to its index of 2005, we can discover tremendous change and advancement. For instance, Korea's GDP in 1996, which was valued at US$557 billion increased to US$788 billion by 2005 as did the GDP per capita (per 1 person), which jumped from US$13,800 to US$20,900 in terms of the purchasing power parity. During that same period, trade has almost doubled in size from US$280 billion to US$545.6 billion. Today, Korea's GDP, trade, export, import, and several other economic indicators, reached the top-10 status among international economies. Not only has Korea's growth been quantitative for the past 10 years, it has also grown qualitatively. This qualitative growth is evidenced by the maturing of Korea's economy as well as in the quality of life of all Koreans. In his opening address, Lee Kyu-hyung, acting Minister (Vice Minister) of Foreign Affairs and Trade, said, "Originally, Korea's main purpose in joining the OECD was to learn the policy of advanced countries, to implement global standards domestically, and to ask for assistance in reform. "But after joining the OECD, Korea's purpose extended to include the needs of a newly developed country such as importing various OECD guidelines related to financial and labor markets, conforming to global standards, expanding the societal safety net and level of public welfare, improving women's participation, increasing other qualitative developments. "To fulfill these expanding objectives, the Korean Government will continue to implement necessary reforms and reconstructions. In light of the first theme of today's conference, Korea's accession to the OECD and its effects, it is an appropriate time for Korea to take the next step, as it prepares for the next 10 years." Accordingly, in retrospect, in 1996 just when the Korean government took the initiative and worked hard to join the OECD, some media and civil society organizations were reluctant to extend their support. They worried, saying that it would be too premature for Korea to join the rich man's club and would cause them great losses. Against their worries, however, the OECD was a gateway for Korea to learn the experiences and knowledge of advanced countries needed for its economy through peer learning, rule-setting and discussions on global issues. Today, no one would argue that the OECD helped the Korean economy by advancing the institutions, reforming each and every sector, and thus upgrading the Korean economy. In particular, the OECD was instrumental in providing Korea with important guidelines on corporate governance and the financial supervisory system in the course of structural adjustment immediately after the financial crisis in the late 90s. The Korean government took advantage of the OECD resources in successfully overcoming the crisis through restructuring.¡Ú
