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Supplements & Quick Reference: · Main Page · Overview · Confirmed Speakers · Available Speeches · Photos · Media Information · Sponsorships   Visit the Official Site: www.pbec2002.com Striving for Growth in a Challenging Environment PBEC 35th International General Meeting Kuala Lumpur, Malaysia May 3-7, 2002 The Honorable Hwang Doo-yun Minister for Trade Republic of Korea "Opening a New Era of Growth in the Pacific Region" May 6, 2002 Thank you, the Honorable Kosaku Inaba, the Honorable Rafidah Aziz, and distinguished guests. It is my honor and pleasure to speak to you today. The issue that I want to discuss with you today is exactly what the title of this session calls for. That is, how we can open a new era of growth in the Pacific. I will address this issue by trying to answer these three questions: First, why is this the time to envision launching a new era of growth in the Pacific region? Second, what should be our key focus and direction in doing so? And third, with this focus and direction in mind, what needs to be done specifically? I will begin with the first question: Why NOW do we need to think about launching a new period of growth in the Pacific? Well, two years ago, we entered this new millennium with varying degrees of optimism for the future. Despite economic downturns and crises in different parts of the world, we believed that the global economy had entered a new chapter of progress during the 1990s. So, we were talking about "Globalization", a "New Economy" and the "Long Boom". But, soon after we crossed the threshold into the new millennium, we saw the bubble burst in IT industries. The global economy began to slide downward. Suddenly, "business cycle" came back to the reality. And, then, 6 month ago, the September 11th terrorist attacks sent a great tremor around the world. For months that followed, we had to wrestle with uncertainty and pessimism. Fortunately, however, -- now it seems that we are turning another corner. The global economy is looking up once again. And, this change gives us room to take a deep breath and think: "Where do we stand?" "Where should we go from here?" These questions are particularly important to the people in the Pacific region. During the 1990s, many of the economies on the Asian side of the Pacific-including Korea-experienced significant challenges. That was, because we had trouble giving up the old model of development and adjusting ourselves to the new global economy. Now, after such difficulties of the last decade and the recent global slowdown, it seems to be the time, at last, for the people of the Pacific Rim to get ourselves ready to open another new era of growth and prosperity, here in this region. In fact, the timing could never be better: Korea and other crisis-stricken economies are back on their feet and back in the game -- with stronger and better shape -- all thanks to the years of reform effort filled with tears and sweat. China-a regional powerhouse, as we all know-has joined the WTO. Japan is raising our hopes with series of new programs for future reform. In the East Asia, through the new mechanism of ASEAN+3, we are stepping up the efforts to build closer ties between the ASEAN members in the south and China, Japan, and Korea in the north. And, in the Pacific Region as a whole, we are seeing active efforts to arrange bilateral free trade agreements; for instance, between Singapore and the US, between Japan and Singapore, between China and ASEAN, and between Korea and Chile. This emerging regional WEB of free trade arrangements adds a great boost to the already active region-wide endeavor to promote free trade -- an endeavor that is moving ahead robust, particularly with the APEC Shanghai Accord last year. Altogether, we see the new Pacific dynamism is gathering its momentum for a take-off. Then, how do we open a new era? Particularly, what should be our focus and direction in doing so? To answer that question, we need to first clarify in our mind what exactly it is that's transforming the global economy. Here, I can say without hesitation that the new force is ---- globalization. What is globalization? We know that it is a process in which national economies become integrated into one global economy. After the recent burst of the IT bubble and the September 11th terrorist attacks, many are questioning whether the globalization process is still moving forward. But, you and I and other people in business and trade know that it continues to drive our lives. Skeptics of globalization often invoke a century-old memory. They remind us that the first wave of globalization ended with the Great Depression and the World Wars at the beginning of the 20th century. So, they argue, the current second wave is following-or will follow-a similar cycle with the same fate. However, this is a weak argument-to say the least. Why? Two reasons: First, globalization originates from the intrinsic natural desire of individual market participants like each of us here today. It is the desire to minimize transaction costs that are incurred when products, services, and financial and human capital move across national borders. The IT bubble burst and terrorism can not alter this natural force. Second, since the first wave of globalization, the situation has changed significantly. What do I mean by that? Globalization is a market force. Market forces thrive on individual freedom. And, during the last century, we have achieved enormous progress in promoting individual freedom. As a famous observer has pointed out, the current globalization process is being driven by "democratization" on three fronts; technology, information, and finance. Beyond the traditional restrictions imposed by national borders, individuals nowadays have much better access to-and control over-these three key resources. In politics, it is extremely difficult to go from democracy back to dictatorship. In the global market too, it is unrealistic to imagine turning the current tide of democratization. So, the conclusion is clear: The trend of the current globalization will only continue on in the future. From this point, naturally comes the necessary focus in our effort to build a new era of prosperity. This focus is "empowering individuals", --- so that individuals can more actively participate in the open global market. Who represents these individuals? Of course, that's you, the distinguished guests here, the private sector representatives. Indeed, I have no doubt in my mind that the new era of growth and prosperity in the Pacific region awaits your leadership. Quite unlike in other parts of the world, the term "private sector leadership" carries special meaning and importance in the Pacific region, particularly on the Asian side. That is, because of the old tradition of government leadership - a tradition that we are trying to overcome. We have realized that in this globalizing world, roles of the government need to be minimized, so that room for private sector leadership can be maximized. In fact, THIS has been the essential idea behind all the reform, restructuring, and liberalization efforts that Korea and other East Asian economies have carried out during the past few years, particularly since the economic crises. As you know in the case of Korea, we have been working very hard to make our banks and corporations more transparent and their management more accountable in the decisions they make. Why? Because, that is how the banks and the firms can be made more independent from the government, allowing their true owners - the individual investors - to monitor and control their businesses. Liberalization serves this same purpose. Through national, regional, and global initiatives, government-controlled border measures are being removed, in order to allow freer movement of goods, services, and human and financial capital of the private sector. So, in this, there is no turning back. 'Promoting economic growth' means 'promoting the freedom and creative power of the private sector.' Government is there to support and facilitate private sector dynamism. Government only takes the back seat. And, this leads to my last point: What kinds of additional regional-level efforts do we need to further encourage private sector leadership and initiatives in the Pacific region? My answer is this. Through the venues like this PBEC, we need to create more opportunities for private sector interaction and cooperation in the Pacific Rim. Such opportunities, I believe, will help generate better understanding, new ideas and new initiatives for opening the era of private sector leadership. Let me relate this point with PBEC more specifically. Ever since its inception in 1967, PBEC has addressed important issues of concern for the businesses in the region. In fact, no other regional business organization compares with PBEC in its history and achievements. And, that is why PBEC has to continue to stand in the center of the regional efforts to generate more private sector initiatives. What is it then that PBEC should do in such a central position? I would like to raise just one suggestion here. PBEC has 6 permanent committees, most of which are engaged in future-oriented forward-looking issues. I notice here a need for PBEC's additional attention to capital-intensive conventional industries. I understand that one of the key missions of PBEC is "to provide advice and counsel to governments on emerging issues affecting the Pacific region's development." But, I wonder whether the term "emerging issues" may be understood more broadly. As much as new industries call for dialogues and cooperation in setting the direction of future development, such need may be even stronger for conventional industries, because they are more prone to face a continuous stream of issues on overcapacity, unfair competition, protectionism and others. In fact, let us look at the cases of bilateral trade conflict in the region. We know that a large number of them do indeed involve issues of capital-intensive conventional industries. And, before these issues are brought to government-to-government consultations and negotiations, we know that they can be more effectively discussed and managed through private sector cooperation - and by the businesses that are directly involved. Certainly, no one knows these issues better than the private sector, because those issues are their issues. Therefore, here, I would like to emphasize my hope that PBEC will offer more opportunities for such private sector discussion and leadership in the region. Relating to this point, there is one more thing we need to keep in mind. When the private sector is talking the lead, it is not going forward alone. In fact, the governments in the region will be firmly behind it. Let me speak for the Korean government, for example. We realize that the role of the government in the new era is to remove barriers. We are removing barriers at our national border so that international businesses can come in freely. We are also removing barriers at home so that international and domestic businesses can -- operate freely and let their creativity and initiatives flourish. We have done at lot in these efforts, particularly for the past few years. But, we acknowledge that we still need to work harder and more. In fact, when we think about it, we know these efforts will never end, as long as the global economy evolves continuously. So, we are determined to go on. In this determination, we know the Korean government is not alone. We know the absolute majority of the government in the Pacific region share the same belief. And, based on such belief, the governments in this region are working together, because we know that in this globalizing world one government can not make so much difference. And, you see the evidence of such cooperative efforts in APEC and other regional cooperation mechanisms. So, here comes my closing. Now is the time to build a new era of growth and prosperity in the Pacific region. And, It is you-the private sector leaders gathered here-who will open that new horizon. And, in doing so, you have the Korean and other Pacific region governments behind you. Now, this region needs your dedication and participation. With that, the private-sector-led dynamism will lead all of us to a new Pacific era of economic growth and prosperity. Thank you.