Korea and the OECD: Welcoming address

Welcoming address of Korea’s Deputy Prime Minister Okyu Kwon to a special conference in Seoul 22 September 2006, marking Korea’s 10th anniversary in the OECD.

"Honorable Mr Angel Gurría, secretary-general of the OECD, Mr Taeshin Kwon, Korea's ambassador and permanent representative to the OECD, ambassadors and representatives from diplomatic corps, Dr Kyungtae Lee, president of Korea Institute for International Economic Policy, Ladies and gentlemen:

On behalf of the Korean government and people, I would like to extend our warmest welcome to all of you here gathered to celebrate the 10th anniversary of Korea's accession to the OECD. My special appreciation goes to Mr Gurría and his team who took the trouble to travel far from the other end of the globe to attend this significant event.

I am personally delighted to be here today and see many familiar faces again.

Today's conference was organized to review 10 years of Korea in the OECD since its accession. It is also to seek a way forward to further advance the Korean economy in the years to come.

The conference is composed of three sessions, as you are well aware. Of the three, the sessions 2 and 3 on "Balancing globalisation and social cohesion" and "Globalisation and development cooperation" have particular global implications and relevance. They both are very critical issues on which OECD member countries have initiated many discussions. We should also step up cooperation to amplify the benefits of globalisation.

I sincerely hope that the OECD, representatives of the Korean government and experts from within the country and abroad will engage in productive and useful interaction on these issues.

Significance of Korea's Accession to the OECD

Ladies and gentlemen,

In retrospect, in 1996 just when the Korean government took the initiative and worked hard to join the OECD, some media and civil society organisations 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 us great losses.

Against their worries, however, the OECD was a gateway for us to learn the experiences and knowledge of advanced countries needed for the Korean economy through peer learning, rule-setting and discussions on global issues. Today, no one would argue against that the OECD made itself a landmark in the Korean economy by helping it advancing the institutions, reforming each and every sector, and thus upgrading the Korean economy.

In particular, the OECD was instrumental in providing us 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.

We in 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.

A case in point is financial liberalisation. The OECD has been advising us of institutional reform to promote financial liberalisation. As a consequence of our tireless efforts for financial and foreign exchange market liberalisation, we are expecting the reservations list of Korea under the OECD Code of Liberalisation of Capital Movements will have been substantially slimmed by the end of this year.

When the 'Financial Investment Services and Capital Market' bill, we are actively promoting, is enacted, barriers between business categories will be torn down, thus expediting the development of financial services.

Another critical area of concern to both the OECD and the Korean government has been labor laws.

Just less than two weeks ago, on September 11 to be specific, representatives of labor, management and the government came to an agreement on a package of labor reform bills on advancing the labor relations that was under discussion for the past three years.

The agreement is aimed at meeting the international standards and boosting flexibility of the labor market. Specifically, it says we are done away with compulsory arbitration. It allows the use of replacement workforce in case of strikes at essential public services. It also calls on easing the procedures for dismissal by economic reasons.

I believe that this has laid the foundation for the Korean government to implement the measures for advancing the labour relations, which was also committed at the OECD Council meeting in 2005.

The OECD/EDRC's Economic Surveys of Korea has made a list of recommendations on deregulation and institutional reform. The Korean government is moving ahead with regulatory and institutional reforms, covering the entire procedure of corporate value chain from entry to exit. In this regard, we plan to announce a package of comprehensive measures at the end of this month.

Speaking of reform and innovation, no other government than the Participatory Government has been more serious and tenacious about it. Public sector innovation has been the goal of the Participatory Government from its birth.

Along this line, we launched last year the "OECD Asian Centre for Public Governance" to spread the spirit of public sector reform to non-OECD members in Asia. The Korean government will step up such efforts to promote international exchange on government innovation between Asian countries.

Changing global economy and the role of OECD

Ladies and gentlemen,

There is no doubt that globalisation and informatisation 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. I understand that Secretary-General Angel Gurría 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.

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.

If I may touch upon the membership issue, I would think that enlargement of membership should be carefully approached and progressed, with budgetary conditions taken into account. Also, the discussion on OECD governance reform should continue in the direction to effectively reflect concerns of the less developed members and non-members.

Strengthening Partnership between Korea and OECD

Now let me turn to how we can strengthen partnership between Korea and the OECD.

In our assessment, Korea has been successfully adjusting to the new environment of the OECD. From now onwards, we will focus more on strengthening partnership with the OECD as an established member.

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 oftentimes the challenges of the global economy. I do not think that expanding growth potential, raising productivity, resolving economic polarisation, population ageing and low fertility are foreign concepts to other member countries.

Given this, we will share our experiences on these challenges with the member countries and actively seek the best possible way to collectively cope with them.

As you may know, I served as Korea's Ambassador and Representative to the OECD until recently. During my term in the OECD, I took the joy in engaging in and observing the issues of the world economy and policy experiences of the advanced countries. They have since become my priceless assets, greatly helping me in dealing with a variety of policies of the Korean economy.

I will strongly advise the working level as well as high level government officials to participate in as many OECD activities as possible. We will also upgrade our research activities to come up with more reference materials to be shared by all.

I am pleased to inform you that Korea just succeeded in securing the increased quota at the IMF just this Tuesday in Singapore. While welcoming this initiative, we are visiting our new role expected by the international community. In this light, we will certainly assume the role commensurating 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.

We initiated in 2004 a consulting project for economic growth of developing countries, as part of the vision to share our valued experiences we acquired from the course of our economic development. We will further expand this project in the future.

Concluding Remarks

Ladies and gentlemen,

During my days at the OECD, I was most impressed with its accumulated expert knowledge and vision of the meeting participants. I found the greatest value of the OECD in its ability to tackle the major challenges of the global economy through in-depth discussions.

Knowing this well, I hope and I am certain that today's conference will serve as a useful forum for sophisticated discussions on how to further strengthen partnership between the OECD and Korea.

On this note, I wish the conference all success. Thank you"

©OECD Observer, October 2006

Economic data

GDP growth: +0.6% Q1 2019 year-on-year
Consumer price inflation: 2.3% May 2019 annual
Trade: +0.4% exp, -1.2% imp, Q1 2019
Unemployment: 5.2% July 2019
Last update: 8 July 2019


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