Turning global crisis into an opportunity

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: financial market stability through the speedy implementation of the Asian Bond Market Initiatives (ABMI). On October 24, South Korean president Lee Myung-bak and Japanese prime minister Taro Aso agreed to support an initiative in which Korea, China, Japan and the Asean will create a joint fund worth $80 billion to fight against the global financial crisis. In a first-ever three-way summit with the Japanese prime minister Taro Aso and the Chinese premier Wen Jiabao in mid-December, the South Korean president Lee Myung-bak expressed resolve to collectively work to minimise the impact of the crisis in the region. In a joint statement, the three leaders said that they would push domestic demand and infrastructure projects while refraining from raising new barriers to investment or trade over the next 12 months. It is important to note that South Korea signed bilateral currency swap agreements with Japan and China of $20 billion and $27 billion respectively. South Korea has already had similar agreements with the US, worth $30 billion. South Korea, which is co-chair of the Asean+3 finance ministers meeting, wants to further improve financial cooperation with other Southeast Asian countries. The government has also been looking forward to build cooperative ties between advanced and emerging markets and plans to propose appropriate measures in the upcoming G20 Summit in April 2009.

It is obvious from the bold government initiatives of South Korea that it does not want to be a last minute ‘fire-fighter’. Rather, it wants to do everything possible to abate the crisis beforehand. The South Korean case provides a good lesson for the countries which are unable to devise comprehensive and bold policies against the crisis and rather taking piecemeal efforts to minimise the impact of the crisis.