Hong Nam-ki Proposes Vaccine, Digital, and National Gap Reduction at G20 Finance Ministers' Meeting

"COVID-19 Widens Imbalance...Urgent Need for Inclusive Growth Strategy"
Strengthening Cooperation on Vaccine Distribution, Digital Tax Agreement, and Support Measures for Vulnerable Countries
Discussion on Support for Low-Income Countries Including New IMF Special Drawing Rights (SDR) Allocation
Urgent Liquidity Management...Coordinated Expansionary Macroeconomic Policies and Enhanced Supervision of Non-Bank Sectors

[Sejong=Asia Economy Reporter Moon Chaeseok] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, attended the 1st G20 Finance Ministers and Central Bank Governors Meeting on the 26th and emphasized, "The polarization between classes and imbalances between countries have expanded due to COVID-19, making an inclusive growth strategy to bridge these gaps urgently necessary."

According to the Ministry of Economy and Finance on the 27th, this meeting was the first Finance Ministers and Central Bank Governors Meeting hosted by Italy, the G20 chair country this year. The meeting was attended by finance ministers and central bank governors from G20 and invited countries, as well as representatives from international organizations such as the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), and the World Bank (WB).

The meeting was divided into international cooperation and finance sessions. In the international cooperation session, discussions were held on overcoming the COVID-19 crisis, responding to digital transformation, and support measures for vulnerable countries.

G20 finance ministers agreed on strengthening cooperation through macroeconomic policy coordination via the G20, addressing climate change, equitable distribution of vaccines, reaching an agreement on digital taxation by mid-year, new allocations of IMF Special Drawing Rights (SDR), and promoting the transition to a digital economy.

SDR refers to the authority granted by the IMF allowing member countries to withdraw foreign currency without collateral when their international balance of payments deteriorates.

U.S. Treasury Secretary Janet Yellen attended the G20 finance ministers meeting for the first time and stated, "Stimulus measures should not be withdrawn prematurely."

Deputy Prime Minister Hong proposed bridging gaps in vaccines, digital sectors, and between countries. Regarding vaccine disparities, he emphasized, "Korea is also reviewing ways to expand contributions to vaccine distribution in developing countries."

He introduced Korea’s Digital New Deal policies, such as expanding public Wi-Fi. He urged creditor countries to actively participate in extending the debt moratorium for low-income countries by six months from June to the end of the year. Korea is a co-chair country of the G20 International Financial Architecture Working Group.

Additionally, G20 finance ministers agreed on the need to strengthen the stability of the financial system and agreed to establish a sustainable finance study group to address climate change.

Deputy Prime Minister Hong diagnosed that abundant liquidity in the market due to active fiscal and monetary policies has recently increased volatility in financial markets.

He stated that expansive macroeconomic policies should be carefully pursued through close cooperation among G20 countries in the medium to long term. Furthermore, he emphasized the need to strengthen supervision of non-bank sectors and for the G20 to effectively operate the sustainable finance study group to lead climate change responses.