 
Thursday, January 20 Transcript of Executive Policy Breakfast Hub Korea:From the G20 Seoul Summit to the 2012 Nuclear Security Summit January 20, 2011 Speaker Dr. Colin Bradford Senior Fellow The Brookings Institution and the Centre for Global Governance Moderator Dr. Stephen Noerper Senior Vice President The Korea Society STEPHEN NOERPER:
It is fantastic to begin this new decade and our new spring programming season here at The Korea Society with Dr. Colin Bradford, a wonderful individual with great insight on the Seoul G20 Summit. It's a new decade that will see the evolution of new institutions that were founded in the “naughts”, be it the G20 or the Nuclear Security Summit. To have a true expert on international and regional governance and the art of summitry is our delight. Seoul has a unique role in hosting both events, both the G20 Summit that's just concluded, as well as the 2012 Nuclear Security Summit. This morning we will attempt to provide something of a bridge between the two. They both represent a tremendous advance for Korea's international diplomacy. We will be joined here over the course of the morning by Ambassador Kim Young-mok, one of the premier architects of Korean diplomacy resident here, and we're fortunate to have him as the new Consul General in New York City. I'd like to thank those representatives from his consulate and mission here, today, as well as so many of you who are regular visitors and friends from affiliated institutions like the National Council on American Foreign Policy, which had a wonderful Korea event last Friday. I'd like to turn now to Colin, who is senior fellow at The Brookings Institution and the Centre for Global Governance Innovation. This morning he'll address this idea of Hub Korea's recent success at the G20, as well as some of the challenges still facing institutional and global governance. He'll add some insights on Korea's global leadership role. Toward the conclusion of his remarks, I'll offer a few thoughts on the 2012 Nuclear Security Summit and where it now stands. Some of you may have heard it mentioned in the context of President Obama's and President Hu's comments at the White House. It is something very high on the administrations of a number of our governments; certainly the United States and China. It is very high in terms of Korea and U.S. priorities. Dr. Bradford is a leading figure in terms of mobilizing public opinion and policy attention on the importance of the G20. He has had a wealth of government as well as international and academic exposure. And so Colin, welcome to The Korea Society, and thank you for spending your time with us here today. COLIN BRADFORD: Thank you, Steve. Thank you very much for having me and my wife here today. The wonderful thing about giving talks is it forces you to think about stuff you're thinking about anyway, and push it a little bit further. The thing about teaching is that you sometimes think of things when you're standing in front of students that you never thought of before in your life, which is also helpful. Thank you for the opportunity to discuss these matters with you who are interested. The basic theme that I'd like to talk about today is the role of midsized powers like Korea in the world economy and in global governance. That's the theme, and it's an interesting theme to think about in relation to Korea. Let me just start by saying that I did a lot of work in the beginning of the 1980s on the East Asian Miracle stories, which in the beginning was the story of the Four Asian Tigers: Korea, Taiwan, Hong Kong and Singapore. I went to Korea in 1979 and one other time in between, and then went three times last year to help think through the G20 Summit. The theme that the Koreans were really interested in was the relationship between the effectiveness and representativeness of the G20 Summit. This translates to how one fits more people at the table without having more chairs. If it gets too big, it's not effective, and if it's not big enough, it's not representative.
One of the things I've said often in gatherings like this is that I think if each of the nineteen countries in the G20 was as responsible, proactive and serious about the G20 as Korea has been, is still and will be in the future, the G20 would work. There would be no problem. It's a real tribute, not only to Korea's economic strength and economic transformation of the last fifty years, but its governance, its leadership, its capacity to deal with complex issues and to give something to the world in terms of direction and policy.
It's really very impressive. I had a chance to work with a number of very senior Koreans and with many economists, political scientists, lawyers and private sector people in the work that I did over the last year. Korean society, as you all know better than I, is deep. It's not just broad. It's not thin. The layers of leadership in the private and public sector are deep, and that's a huge asset when you think about some of the other countries. What I thought I would try to deal with today is to quickly outline four threats that I see. I've changed the word "challenge" to "threats," to the G20. I've been working on the G20 since before it became a summit, so I'm an advocate for it. I don't see how we can deal with the challenges in this world without a mechanism like the G20; and since we have it, if it doesn't work than nothing will. It will be hard to replace if it fails, and result in a long period with no global governance at all. I am concerned that the problems facing the G20 are sufficiently serious that the threat of its survival and ability to function as a global governance and leadership mechanism, which is what it's meant to do, is at stake. I have four things to mention, and I'll go into some detail on these and then conclude with some remarks about the implications for Korea's leadership as we look ahead. The first problem is what I've come to call a divergence between the real narrative of summitry. Almost every week, officials from the nineteen major countries in the world are in continuous contact with each other on major economic issues: the senior people in the central banks of the G20 countries; the senior people in the Ministries of Finance; and then, of course, the sherpas which work on summits for the heads themselves. There are formal meetings, but there is also contact by email and by telephone every week. That's a major change in the way the world's actually working. Before, the contact was among seven or eight countries, and now it's among the twenty. The twenty are much more diverse, of course, than were the eight or the seven. In addition, these countries represent something like 77 percent of the world economy. This is quite important in terms of keeping the train on the tracks and making sure when things like Greece pop up that all of a sudden you just know that these guys are on the phone; these guys are on email; these guys are moving to position assets so that we can plug the hole in something like this as quickly as possible, and deal with any other problem that you can imagine. It's a very important part of the new system of global cooperation and global leadership. Now the summits are crucial to that because, in fact, these problems that they're dealing with are not problems that are purely economic or purely environmental or purely security issues, but they're dealing with issues that are interlaced with each other. The leaders of the involved countries are the only people who can knit together the horizontality or the connectedness of issues across ministries, across departments, across sectors and across issues. So the summits have to work in order for the rest of it to work, because the nature of their challenges in the twenty-first century are connected issues rather than specialized issues. This divergence that we saw in Seoul could also be seen in summits as countries debated what constituted a fiscal expansionary policy and in Toronto what constituted an exit strategy. In Seoul, the debates were about the currency wars, about the quantitative easing on the part of the United States, and the whole issue of rebalancing the world at the same time as you get a global growth policy in the world. Those issues all made headlines during those three summits, especially the run-up to the summits because of the fact they had to do with conflict and divergence; when the whole story of summitry is about convergence, cooperation and consensus. And so, the media has a field day over these kinds of issues that surface before and during summits, because of the fact that it's sports. It's China against the U.S. The Europeans against the Americans. The U.K. and the U.S. against Germany. Those are the three clusters of countries that came up in each of the three summits going backwards. The Financial Times’ Alan Beattie, who had come to the Seoul Symposium we had in September in Korea, declared the Seoul Summit a failure three days before it took place because of the currency wars and the quantitative easing the U.S. did. China, of course, was saying we were manipulating our currency and we've been saying they've been undervaluing theirs. I don't know what the Fed was thinking, but it was bad timing to do the quantitative easing one week before the Seoul Summit, and was the stupidest political move I can imagine. It may not actually be manipulating the currency, and it certainly wasn't intended to do so, but it could have spillover effects on the currency.
I think the divergence, then, between the real narrative of cooperation which is happening at the working level, and the political shootout that's being portrayed in the media, is a problem for political leadership in the world, because political leaders are supposed to be working together, not against each other. The second problem is the G8 itself. The fact is that the G8 continues. Those of us who were pushing for the G20 to come into being wanted the G20 to replace the G8. Leading Indian and Chinese figures suspect and worry that the very fact that the G8 is setting up the consensus view means that the G8 countries (especially the G7 countries) want to get the G20 countries to agree later. A lot of us jumped on Stephen Harper for having the G8, as you remember, in Huntsville on a Friday and then the G20 in Toronto on the following day. We thought this was terrible. Now Sarkozy, in his wisdom, has fixed that problem, but he's having the G8 in June and the G20 in November. That's fine, but, the G8 still meets first; and the G8 meets in the run-up to the G20 Summit in November. I think it would be very interesting to know what Obama thinks about this. If the G8 is as convinced as I am that Chinese and Indian leadership alone—not to mention any of the other eight emerging market economies (or nine, if you want to count Russia)—are suspicious, and the fact that, that means they're holding back and are reticent and skeptical, would be enough to persuade me, if I was a G8 leader, to drop the G8. You can communicate among each other. You don't have to have a summit, and it's politically disastrous. I think that's a threat, and that's the second issue. The third one is what I call "passive players," the five small emerging market economies that are smaller than Korea, that are in the summit but I think are free riding, basically. They're lucky to be in the summit. They're important economically, in terms of their weights, but when they get in the room, as far as one can tell who watches pretty carefully, they don't bring a lot to the table and they don't do a whole lot. Those countries are Turkey, Saudi Arabia, Indonesia, South Africa and Argentina. Let me just put a caveat. Argentina is probably the one country in the G20 Summit that in all the years of discussing this is the one that everybody points to and says, "What is Argentina in here for?" It's a very good question, and there's also a very good answer which I won't give right at the moment, because it will divert us from our theme. I will say this. Cristina Fernández has done reasonably well at bringing ideas to the table. With that exception, I would say these five countries have been passive players, and they only represent 3 percent of world GDP. So to count, they have to play, but they've got to play with others, and they've got to put their cards down with others, otherwise they don't count. If you have these five emerging market economies (essentially half the emerging market economies) at the table and the whole point of this summit grouping is to bring to the table countries other than the obvious ones, then they really have an opportunity and a responsibility to represent the rest of the world and to be proactive. Instead, they're free riding. They're just sitting there. I think that's a problem. It's a problem for Korea because Korea could lead this group. So the first problem is the conflicts and diversions between narrative and news; the second is the problem with the G8 still existing; and the third is the passive players. The fourth is the centrality of the issue of rebalancing the world economy at the same time we're trying to find a global growth policy, and that the rebalancing (that is, the working out of the imbalances between surplus countries that are running current account and capital account surpluses against those countries that are running current account and capital account deficits) is at the center of the problem. The U.S. and China, of course, are at the center of that problem, but they're not the only part of that problem. It's wrong to think that the rebalancing problem is just a problem between the U.S. and China. It involves other countries. It involves Japan and Germany as surplus countries. Saudi Arabia is a surplus country in a significant way. The oil exporting countries, in general, are surplus countries. The U.K. is a huge deficit country, as is Australia, just to name a few. There are others. There is a global rebalancing problem. That's at the center of the drama of the G20 and the last two summits in Toronto and Seoul. Because of the currency war issue that arose in Seoul, if Sarkozy cannot work out a way to credibly address this rebalancing, he's going to have a problem because the news media is going to have a field day again. The real narrative of summitry is going to get lost, and the G20 Summit is then going to have a succession of summits in which divergence is a bigger drama than convergence. That, I think, is a threatening thing. An important question (and it's not an easy question) is can the G20 deliver on rebalancing? And so, I'm just going to give you some figures that I've worked up. To start off the new year, I read Gordon Brown's book, Beyond the Crisis, which is an interesting book, and I'll tell you a little bit about it as we go along here. But let me just give you the throw weights, if I can use that term from the securities business, of the world economy today. The U.S. is 25 percent of the world economy by GDP. The European Union, taken together, is 25 percent of GDP. So Europe and the U.S. together are half the world economy. China is another 8 percent. The U.S. and China combined are 33 percent. As third of the world economy is constituted by China and the U.S. When they get into imbalances, that has a huge impact on the world. The rest of the G20 (other than the U.S., Europe and China) are about 20 percent. So, the G20, as a whole, is about 77 to 78 percent of the world economy, which is a lot. Around the table, in the G20, you've got the major powers. The rest of the world is only 23 percent. The central problem raised in Gordon Brown's book, Beyond the Crisis, focuses on how to offset what he perceives correctly to be projected slow growth in both the U.S. and Europe in the future. He's trying to figure out a "plan for global growth" (that's the phrase he uses) to offset slow growth in half the world economy. He starts out by looking at the U.S., then China, then India, the rest of Asia; and then he looks at the developing world. When he comes to his chapter on the plan for global growth, the narrative in the book starts to come apart. It doesn't hold.
Why? Because he can't find a select group of countries that's large enough to offset half the world. He's picked a problem for which the only solution is that the rest of the world, the other half of the world, has got to grow fast to offset the part that's growing slowly. And he doesn't want to come up with that solution. He wants to come up with a G20-type solution where a select group of countries can do it, and that's not enough. The U.S.-China imbalances, on the other hand, are one-third. And so if you say China is not going to move on its exchange rate; the U.S. is going to grow slowly anyway; can the rest of the world offset the U.S. and China? In other words, can incremental actions by the rest of the world offset incremental actions by the U.S. and China? That's the main problem that the G20 has set itself. That's more tractable, because one-third is less than one-half. It really does boil down to something that simple. I read Gordon Brown's book with great hope. It's a wonderful book and deserves to be read and discussed. But in a way he flounders, because he overreaches. Not all countries in Europe are going to grow slowly, for one thing. Not all countries in Europe are surplus countries or deficit countries. So it helps, if you're trying to do a global plan, to break it apart and deal with the bigger countries in Europe, rather than to treat Europe as a whole. That's my cut on that. It's just an interesting foil for the problem. I'm not going to try to offset the contraction in the U.S. and Europe, but rather talk about whether there is a coalition of countries, G20 countries or otherwise, that could, in fact, be a strategy for global growth. And so here are the way the numbers break out. The deficit advanced industrial countries, as I told you, are the U.S., the U.K., Australia and Italy. There are four nondeficit advanced industrial countries, some of which are surplus countries; some of which are running more or less balance of payments in their external accounts. These are Germany, Japan, France and Canada. Those four countries together constitute one-fifth of the world economy. Those four countries are significant.
If you combine those with the five big emerging market economies from the G20; namely Brazil, India, Mexico, Korea and Russia—I'm including Russia because it's a G8 country, although not a G7 country. There is a difference, so I'm including Russia with the midsized emerging market economies—they're 11 percent of the world. So you have 32 percent of the world economy in nine countries that are midsized countries. Germany, Japan, France and Canada in the advanced group; Brazil, India, Mexico, Korea and Russia. And interestingly, Korea gets positioned in this group not because of the GDP size alone, but because of trade. Korea's imports, as a percentage of GDP, is the highest, without doubt, of the major countries; 54 percent in 2008. So in terms of imparting impulses for growth to the rest of the world, the openness that half the economy is sucking in imports, or half the GDP is imports, is a huge factor in Korea's role in the global economy. Then you add the five small, passive players which as I told you before is only 3 percent of the world: Turkey, Saudi Arabia, Indonesia, South Africa and Argentina. You basically tell them, "Look. You're in the G20. We need a G20 strategy for global growth. We can do it with the midsize countries that we have, but we need your 3 percent. And furthermore, if you're going to be at the table, you better play because otherwise, you're taking up space where some other countries could be there." Spain is an example, which has a $1.3 trillion GDP which I think works out to about 2 or 3 percent of GDP. Spain could be given a seat which would make up for these five countries themselves. Now you've got 35 percent of the total. Now there's a group of ninety-four middle income countries, none of which are significant either by themselves or even in small groups, but together constitute 8 percent of the world economy. These are the countries that are moving faster, obviously, than the fifty or so lower income countries, which is the rest of the world; which are too small, growing too slowly and not open enough to drive anything. That was true when I was at the World Bank in the late eighties and did a study of all this; is that the lower income countries couldn't drive anything; couldn't contribute to global growth then, and the really terrible thing to realize is that twenty-five years later, they can't do it now, either. The bottom is the bottom. But there are the middle income countries. So, you could get to 40 percent of GDP with that grouping of countries: with the midsize countries plus a development strategy, by the G20, that had as its goal not only to help the middle income countries grow faster, but help them contribute to global growth, as well. What does all this mean for Korea as a leader? I think some of it is pretty obvious from the way I've told the story. I think you can analyze the story. The midsize countries actually can play a role. You don't have to depend on the giants: the U.S.; Europe taken as a whole, and China. You can actually get a global growth strategy using the nine countries that I mentioned. You can leave the middle income countries out of it and you'd still have 35 percent of GDP if you took the four advanced industrial countries, the five major but midsized (not the giant) economies; Brazil, India, Mexico, Korea and Russia; and then the five passive players. You've got 35 percent of the world economy. That's enough to swing a lot of weight, but they have to do it completely together. There's a role for Korea to play in mobilizing those countries. Sarkozy is one of the midsized European advanced countries, but he probably doesn't have the resonance in Asia that Korea does. I think the world is ready to recognize Korea as a player, if Korea can step forward and take its role. It has a formal role, now, in this next round with France, because there's this troika system of leadership where you have the team from the past G20 Summit, along with the team of the current summit, along with the team that will take over the next year that works on preparing the summit. So for now, Korea is the past, France is the present, and Mexico is 2012. Those teams are working together to shape the French summit. The troika system is not a big deal, but I think Korea, because it's a serious player, is taken seriously, does its homework and has a deep bench in this arena can bloody well muscle their way through and make the troika mean something instead of having the troika just be a formality. I think Korea should really try to make it mean something. Then there is Korea's weight, which I just told you about, which has not only to do with its GDP size, which is large enough to get it in the top dozen countries, but is amplified by this huge import to GDP ratio which really is the key. Every time you stimulate your GDP by 1 percent, it means that you're contributing 0.5 percent to global GDP growth; and this is separate from the multiplier effects because half of Korea's GDP is through imports. I think Korea could play a really significant role with who I'm calling the passive players. Mexico has been a passive player. Calderón, ever since he's been president which is during the entire history of the G20, has had these internal problems of crime, issues on the border, violence, drug trade and so on; so he hasn't really been a vocal person or an active player in the G20. It's rumored that Turkey or Russia are considering taking the leadership for the G20 in 2013. Well, if either Turkey or Russia is going to do that, a good thing to do would be to start leading sooner than just the year you're going to actually be hosting it. So, get busy. Get your teams ready. This is complicated stuff. It's not just running a show, after all. You've got to be a player and moving the substance forward for a number of years. You can't just do it when it's time to be hosting it. Brazil is going to be interesting to watch what happens in this post-Lula period. Lula liked the summits as a show, although he didn't go to one because of some political difficulties, actually. There was a storm in Brazil during the Toronto summit, so he didn't go. I've been told by my Brazilian friends that the real reason had to do with the fact that he had seen the president of Iran, and that was going to cause kerfuffle with the other leaders while he was there. But what's interesting is Lula was a big personality. The new president is less well-known. So, the question is what sort of team does she have around her? What do the Brazilian business and think tank elites think about this? Brazil should be able to play a larger role. It's a big energy player. It's a vibrant country. It plays a big leadership role in Latin America. It's always aspired to a global role. The question is, now you're in the G20. You've got a forum to do it. Play. Indonesia has been very passive, actually, but is a neighbor of Korea's. A friend of mine who works at the Korean Development Institute was in Indonesia last week with a policy dialogue. I don't know much about it, but I'm hopeful that Korea can help Indonesia come forward by helping with some of its technical work; by helping them be more prepared to play a bigger role. And then there's India. India is a complicated story. India is very skeptical about whether the G20 can contribute anything to their domestic issues. A lot of people around Singh think that the domestic issue is the whole game in India, and the playing of a big global role is far beyond their reach and their interest. They are waiting to see how it all plays out. If it doesn't work, they've lost nothing because they haven't put anything into it. If it does work, then they can just ride it. Terrific. But it's not going to work unless they play. That's my response to them. So there are a half-dozen countries I've just mentioned to you. All of them are roughly the same size and weight as Korea. There is no reason why Korea, as the most serious G20 player, cannot intellectually lead these countries. Then there is this unique situation that Korea is in, which relates to Steve's points. Korea represents both an economic power and a big security issue in the world arena right now because of North Korea. This presents Korea with an opportunity to enhance its own security interests, by bringing the security issues and the economic issues (which of course, in some ways, are intermeshed anyway) together in the G20. But you could also help solve this G8 problem, because the one thing that the G8 can say about itself, that it can't say in the economic area, is that they are going to meet and discuss security issues. It doesn't make a bit of sense to talk about security issues without China there. If the G20 begins to deal with security issues in a real way, then there's nothing left for the G8. They might as well fold the tent, which they should do for other reasons, as I said at the outset. So, Korea, I think, is well positioned. And then there's what you could construe to be a very small element, but it's not a small element. In March, the Korean government is going to launch the Center for Global Governance Studies, a think tank that is essentially a follow-on to the work that they did as leaders of the G20. This is a magnificent idea. This may sound self-serving, as I'm a member of two think tanks. One is Brookings in Washington and the other is the Centre for International Governance Innovation, CIGI, which is a major player in this field. Brookings has networked with the Institute for International Economics, with the Center for Global Development and other think tanks in Washington. We have our own international network ourselves, and then the CIGI has its network. We have, I guess, fifty people who are following the G20 issues around the world, and these are in different countries. We have networks in all of the G20 countries; some stronger than others. We organized a meeting with Gordon Brown's U.K. G20 team in February of 2009. We organized a conference in Washington with the Korean Development Institute for Sakong Il for the G20 Presidential Committee in April of last year. We organized a Seoul symposium with 600 people attending in September. We've had CIGI conferences everywhere in the world on G20 issues. The supporting message we've given to the Koreans is you need to join us in this network, and we will support your forming this center. But the network is more than just a bunch of eggheads sitting around. The thing about think tanks is they're not academic institutions. We're not talking about ideas for ideas' sake. We're talking about ideas that have traction in the policy world; whether they be governance innovation ideas, which CIGI has been dedicated to since the beginning; or whether it's international economic issues; energy issues, climate change, poverty, development or whatever. So this is a big opportunity and necessary for Korea if it is going to exercise leadership. Backing it up with a think tank can keep Korea in the game, both in official and unofficial think tank circles. The think tank networks matter. We've got evidence from the things that we've done that we've made a difference in the way that the G20 Summit has gone forward. We're trying to suggest that Korea generate the capacity to continue its leadership in this arena, not only in official circles, but in the think tank arena. Thank you. STEPHEN NOERPER: Thank you, Colin. [Applause] We'll get back to Q&A on your points in just a moment. I would like to acknowledge that we've been joined by His Excellency Kim Young-mok. Thank you for coming this morning. Let me move very quickly through some points on the Nuclear Security Summit as we look forward to 2012. As mentioned in the introduction, President Obama and President Hu took this issue up at their meeting in Washington, DC. It was noted in the official transcript of President Obama's comments. I would emphasize that it was noted directly after President Obama's expression of concern about the North Korean nuclear situation and his support for a Nuclear weapons-free Korean Peninsula. It's good to remember that in that context, which has both a bilateral and a multilateral aspect to it when it comes to nuclear security. It is a priority for both President Obama as well as President Lee. The 2012 Nuclear Security Summit will come at an important time, given the transition of leaderships that we will see in several major nations. Remember, it's a major year for elections. It will come at an important time given concerns over North Korea and Iran. Those concerns hopefully will be mitigated, somewhat, in the interim, but they certainly won't be solved before then.
A few words about format and function. Recall that in April, 2010, along with President Obama and the Nuclear Security Summit in Washington, D.C., forty-seven nations gathered with thirty-eight heads of state. This was the largest gathering of heads of state by a U.S. president since 1945. Three international organizations participated. In Seoul, they expect over fifty nations, so you're talking about a very large number at the table. In terms of function, there is still the basic question of “what constitutes nuclear security?” That definition is probably going to be different among many of the fifty members, but certainly there will be several major strains. And so trying to evaluate and define the state of nuclear security will be very important in the lead-up.
The focus as it stands now is on preventing the transfer of nuclear weapons to terrorists; that these weapons do not fall into terrorist hands. You may remember from the resolution that came out after the April summit supporting IAEA, as well as curbing smuggling, are priorities, and both have potential impact by way of the North Korea situation. What was left off the table in 2010 were nonproliferation, disarmament, and nuclear energy. Since there was mention of the G8 interplay in Colin's comments, I would note that we do, here, also have interplay in the G8 global partnership on WMD and also interplay by way of United Nations Security Council Resolution 1540 and the 1540 Commission. So there is some overlay to be focused on and positive reinforcements to be aspired toward. In terms of the focus on nuclear terrorism, that will continue to be the centerpiece, and there have been some calls already that the focus remain as narrow as possible. However, Korea has stated that it would like to see some discussion on the peaceful use of nuclear energy. That makes sense when you consider Korea's position. Korea has twenty operational facilities. It concluded a $20 billion deal for construction in the UAE. Korea produces in its twenty facilities with 95 percent domestic capability. My fourth point is that coming out of April, 2010 and looking toward 2012, there was and will be heavy public and private sector engagement. That will continue and probably grow in Seoul, both by way of the nuclear industry, as well as the NGO component. Fifth, since Colin mentioned sherpas, this is someplace where we have seen a shadow effect, and that the sherpa process, in terms of the support mechanisms that lead up to the summit actually are as important as the summits themselves, in terms of getting things done. And let me make a final observation. I would encourage all of you who are interested in this, and who would like to get an early read on 2012 to please pick up a study that was done by The Stanley Foundation. It's just been released. It's actually a summary of their October conference which was held in Warrenton, Virginia. They make some recommendations for the 2012 Nuclear Security Summit forum, and I'll share those with you.
Very specifically, they suggest elimination of highly enriched uranium in civil commerce; no new civil HEU activities; adherence to a set of HEU transparency guidelines; participation in the World Institute for Nuclear Security (some of you may know that's located in Austria, and it's meant to both help operationalize what gets mentioned at the summits); a commitment to no increase in separated plutonium; performance testing and the addition of safeguards to fuel cycle facilities in nuclear weapons states. The report itself is a good seven or eight-page read and it does a good job of digesting some of the points I've made; not all of them, but some. Given the HEU priorities and the revelations about the centrifuge activity in the DPRK, one can see the complications immediately. And so, I guess I would end with the same point that Colin left off with: that the economic power of Korea, as well as the big security issue there, puts it in a unique position: a position of responsibility, a position that faces challenges and an opportunity to further enhance its status regionally and globally. Let's open it up, then, to the table: questions, answers, points of discussion. Please, Dr. Kim. YUNG DUK KIM: Y.D. Kim, board member of the Korea Society. I think it is very intriguing to hear about Korea's role in the G20, particularly on the economic front and also combined with security. I think that's a fascinating idea. Regarding the security issues, I would like to know your opinion on how that interacts with the United Nations mission. COLIN BRADFORD: Well, that's a very good question and I'm not surprised that question has been asked here in New York, where the United Nations is located. We've talked a lot about that. We did a book, by the way, for the Presidential Committee on G20. Sakong Il basically asked me to organize a closed meeting in Washington. Rhee Chang-yong, the Korean sherpa was there for the whole thing in April. We teed up the issues there for this big symposium that we had at the COEX on September 28, 29 and 30. We then did a 472-page book out of the conference. The conference was a large public conference. The book is short essays. The presentations were ten minute pieces with a big effort to communicate with the public. The Washington meeting was to talk among ourselves. We've talked about this. CIGI is holding a meeting on the G8, the G20 and the U.N. in early May in Waterloo, Canada with a lot of people coming to that. It's not an easy issue. When Sakong Il asked me to organize this meeting, he asked me to do what I told you earlier, which was to think about this issue of representativeness and effectiveness which, of course, is a tradeoff. What everybody is saying is that the U.N. is supremely representative, because everybody is there; but especially in the economic area, there's always been this question among us economists—who are all in Washington and think the Fund and the Bank which are really U.N. agencies in the end—but that the U.N. is much weaker in the economic area. There is this problem of having approximately 197 members. In a way, everybody's voice is there but nobody's voice is there because there is such a cacophony of voices that it's very difficult. Yet, on the other hand, it is very difficult to exclude countries. The Security Council reform process has stalemated, which is very regrettable. I think if that could move forward, somehow, and real change take place there, I think it would help in the security area. The U.N. could be seen as more effective and actually be more effective which is the most important thing. That is a finite group of countries around the table and has this mix of big powers with other countries. I think that's the trick. Somewhere in the twenty to thirty range (and hopefully closer to twenty) is a number in which you can have a real discussion. A table this size works. A table that's twice this size doesn't work. For me, there's a very clear difference between twenty-five and twenty-six people in a classroom. It goes from being a seminar to a lecture, and lectures in this business don't work. People reading speeches to each other is a death knell for any kind of meeting. Language is also an issue. What you want is for countries to exchange views and to really engage in discussion. You want the leaders, once you get them there, to be able to deal; and to do that, you've really got to keep the number around twenty, otherwise you just can't do it. Start doing the math. If all twenty leaders speak for three minutes, there goes an hour. Especially after Copenhagen, it was easier for people to see that maybe twenty was better than 193. I refer you to the book, because there is an essay there by a Canadian colleague named Paul Heinbecker who was the Canadian Ambassador to the United Nations for many years. He was also the Canadian Ambassador to Germany. A very splendid professional diplomat; an intelligent and warm human being who cares about these issues. Ambassador Heinbecker has written a nice essay in that book about how to have some interaction between the G20. I think the model that we're working towards is to go from the G20, which is an informal, self-selected group of countries that really isn't an institution. It's a grouping, but it's a leadership grouping. There is a book coming out in the spring by the Brookings Institution titled Transition to Global Leadership. Keep an eye on the fact that what the global community needs today is leadership. It needs strategic direction. If the G20 could figure out a way to provide strategic direction that's clear, credible and does embody the mosaic of opinions around the world in the formulation of it, then the formal treaty-based institutions like the U.N., the World Bank, the IMF, the World Trade Organization, the World Health Organization, etc. could then make the actionable decisions around the issues where the G20 says, "We're going there, we're not going there." It doesn't need to say exactly what this corner of the room looks like. It just needs to say, "We going towards that corner of the room, but we're not going towards that corner." At the moment, as it pertains to climate change, we're not going anywhere. Nobody knows what the global direction for climate change is. Everybody knows it's a problem, but nobody knows what the framework is for dealing with it. The role for the G20 would be to come up with a framework and then have it go into the United Nations F.C.C.C.C. process for approval, adjustment and amendment; and then get implemented by the various international and private agencies that need to be involved in it. I think what's we're groping for is not an either/or deal, but is to distinguish between the political leadership that's required; to give confidence back to markets; to restore trust in institutions and in leaders. At the moment, the world has realized we're all in the same boat and nobody's clear if we've got a steering wheel, or we don't, and who is actually steering. The G20 can't do anything because it hasn't the mandate to do anything. It can't implement anything because it has no staff. It's not an institution. It doesn't have money. It doesn't have anything. It does have, I think, the right to say "From the point of view of 77 percent of the world's GDP and 80 percent of the world's people, we think we should go that corner of the room rather than that corner. If you don't like that particular corner and you want to try to move us to go a little bit more to the right or the left, fine, but let's, at least, head in that direction." Then the U.N. becomes a useful place to sort out how to adjust the vision that the G20 might come up with on a given issue. That's my feeling as to how it should all work. It keeps a role for all the other institutions, but at the moment, there is very poor coordination between the Bank. the Fund, the U.N and the WTO. And since all the issues are now connected, nobody has articulated how to manage the horizontality of the issues rather than the verticality. HENRY SEGGERMAN: Henry Seggerman, International Investment Advisers. Economically, taking all things into consideration, in the upcoming ten years or so, what do you think are the most promising African countries? COLIN BRADFORD: I'm not the best person to answer that for you. I've heard it said very recently by a number of people that the population and GDP projections for Africa, as you look out to 2050, are that Africa could be a growth pole for the world in the long term; and therefore we should invest now in Africa. That's plausible to me. I've seen the affirmations of this. I haven't read the studies. I'm not an expert on Africa. I've been there a few times. It's not an easy place to understand. In my view, culturally you can speak of Africa as a whole; but, in fact, it breaks down into a huge mosaic, as you probably know better than I. The one thing people have convinced me of, but I haven't been able to resolve, is the problem that sub-Saharan African countries do not feel that South Africa is a sufficient representative for Africa in the G20. It's a growth pole, for sure, and Nigeria could be growth pole in Africa. It's the largest economy with the largest population. First of all, I don't know how you engineer replacing South Africa with Nigeria at the G20, but that's not really your question. Nigeria, Ghana. Uganda, certainly, has played a role, so far. Kenya. Botswana is a small country but still growing fast. It has good governance and is an important country. It is superficial of me to suggest to you that somehow my knowledge and expertise of Africa is enough to answer your question. I do agree with the affirmation of others that it has the potential to become a global player over time and that we should pay attention to that now, for both social reasons and reasons of humanity because of the strategic importance that Africa could have down the road. QUESTIONER: I am just an ordinary member of the Society. I was intrigued by your last point about the role Korea can play as a middle-sized nation. President Lee made a bold attempt to rally Southeast Asian countries, and it failed. Could you comment on that? They didn't respond to his idea of a closer economic unit. COLIN BRADFORD: I wasn't aware of that. We've had some discussion at the G20 about regionalism and whether regionalism is helpful to the global governance or not. I don't know a lot of details about his initiative with ASEAN or with Southeast Asia. I tend to think that regional blocs can be helpful in terms of distilling up ideas that could be then funneled to the G20. Andy Cooper, who is a wonderful political scientist from CIGI in Canada, has written that you could use regional organizations like the ASEAN Plus Three, who could say that at the Cannes Summit in November, 2011, we're going to be talking about the international monetary system. Sarkozy wants to talk about whether the dollar should really remain the dominant currency. It's a nice issue for the French to raise about the U.S. It's a substantive issue. You could take an issue like that and have all the regional summits that take place deal with that issue and come up with a regional perspective on it. An alternative way to think about governance in the world is to not think regionally only. The phrase that we've come up with, with Stewart Patrick of the Council of Foreign Relations in Washington, is "shifting coalitions of consensus" within the G20. An Australian colleague of ours offered this idea a year or so ago, although some of us pushed back on it. Now that we have six Asian countries in the G20, as opposed to only one in the G8, why don't we form an Asian bloc? Frankly, I think that's a terrible idea. The potential of this diverse group in the nineteen countries of the G20 is that on an issue such as climate change, one constellation or configuration of countries might lead on it. On global poverty and development, a different constellation might lead. On financial regulatory reform and pushing for a stronger role for the FSB and the IMF, still another. That's why I think getting rid of the G8 would be a terrific idea, because what is the G8? The G8 is a transatlantic, Western, industrial, white grouping in a world that's neither entirely Western nor industrial nor white. What is it doing? Nothing. It's not a legitimate grouping, really. It's a grouping of countries that are no longer dominant where historically, they have been in the past. Why stick to that kind of a formulation? I think what makes sense is to approach global governments in a pragmatic way. Korea would align itself with some countries for some purposes, and other countries for other purposes, because the consensus forms differently on different issues. That would actually make the governance within it work, because people wouldn't be lining up by alliances or ideology or prefixed ideas; but rather moving toward practical solutions to problems. You want the person with the brightest idea. I've always said to smaller countries, whether they're at the Fund or the Bank or wherever they are: "Forget your voting share. What difference does it make? Just send somebody brilliant to the Fund or the Bank who may have a great idea." We don't having voting shares in the Bank and the Fund, but we've had influence there. So, ideas matter; and to give primacy to ideas, to knowledge, to innovations, to things that will work would make the mechanism itself work. But if you say, "Well, we have to have an Asian view on this because we really want to differentiate ourselves from the Europeans and the Americans," or, "We want to go in there with a Latin American view," or a G8 view; what is that? That gets to be a struggle for power rather than a search for solutions. There are some serious leaders in the world. A lot of the leaders that are there are serious people that are able to convey ideas. It's crucial for the future of our earth that is now threatened, itself, by so many issues (and I'm not just referring to climate change) that we come up with global solutions. It's essential, it seems to me, that this work. The way it will work is if we don't think about blocs or alliances, but we look for the best idea. Should Luxembourg or Lesotho come up with the best idea, so be it. Use it, regardless of the flag that stands behind the idea. Take the germ of an idea, play it out, and make it work. I think it's quite important that we think about a cultural change. I've argued for a long time that people working on the G20 shouldn't think of it as just larger than the G8. It's got to be different than the G8. This is one way in which I think it could be different, if countries really set out to ensure, in a certain sense, that they don't align themselves with the same countries on every issue. To do that creates rigidity. What you want is flexibility. STEPHEN NOERPER: Colin, by way of follow-up, so many of your answers here have touched on this leadership issue. With the transition of leaderships in 2012 at the national level (we would have the U.S., Korea, Russia, China, probably Japan at least once by then, and North Korea has 2012 described as a year of strength and prosperity), do you see that as an inherent challenge or are these processes set well beyond them? COLIN BRADFORD: That's a good question. I hadn't thought of that. First of all, there will be no leadership change in the United States. That's a biased and partisan remark, but it's a realpolitik remark. The way I put it to friends of mine is, "Would you rather be chairman of the Republican National Committee or the Democratic National Committee right now?" Who is your leader on the Republican side? What is your agenda? It's not clear. It's clear who the leader is on the Democratic side. It's clear what his agenda is. It's clear what his accomplishments are. In the end, the American people are going to have to decide who they want. I think all the people saying that Obama is going to be a one-term president are smoking something, frankly. That's not a purely partisan remark. It's based on somebody who follows governance. I'd be worried if I was a Republican. I don't see how you get there from here. That's a gratuitous remark, and I apologize to those of you for whom that may be offensive. It's based on some real reflection and I think it's probably going to play out. I think considered thought has to be brought to bear about the G20 not letting these things get away with just being photo ops and one-day events (and I've been talking to the press about this) but to keep invisible the stream through time of G20 activities that are going on every week; and to realize why that's important and what's actually going on in those channels. Then also, be very thoughtful about the summits. Realize that if you develop a culture of the sort we were just having a conversation here about; a culture of how the leaders interact and what G20 political leadership as a collective leadership (I don't like the term collective, but you understand what I mean); then when some players drop out and other players come in, they join a culture that is working in a certain way and is based on certain practices, ideas, openness and discussional modalities. They can join, rather than have to find their feet in a fluid pool and it's not clear what the game is. To be honest with you, I was quite disappointed. The original idea was that I would go to the G20 Summit. It turned out I didn't have a lot to do there. I said, "I may not come, but I would like to come if you'll let me get close enough to see and listen to what's happening. I pledge to you I'm not interested in using it for other than writing you a report that suggests how you might make it better." I don't know whether Sarkozy is the best guy to do that, but we're already talking to the Mexicans. I think at some point, you've got to let some analytical people in or near the room, listen to the audio, and say, "Look. Here's what I see going on, and here's how it could be different." To not just let spontaneous combustion happen, but start to think about if this has a serious purpose of global leadership, and if so, how to cultivate that; so that when new people come into it, they're coming into something that has been formed by their predecessors, which happens in all institutions, and has created certain values and certain ways of interacting. Not that they'd be rigid. Quite the contrary. At least they'd exist. At the moment, it's a freefall, and that's problem. STEPHEN NOERPER: Please help me in thanking Colin Bradford. We also are grateful to His Excellency Kim Young-mok for his continued support of The Korea Society and are delighted you could join us this morning. We hope to welcome you all back on February 3 for a discussion of North Korean leadership transition and the Chinese Communist Party connection to that. On February 16, we will have a luncheon to address the final push for the Korea-U.S. Trade Agreement and benefits to the financial sector. Please join us at www.koreasociety.org. STEPHEN NOERPER: In closing and at your suggestion, Ambassador Kim, it would be wonderful to hear your thoughts on the meeting yesterday of Presidents Obama and Hu. KIM YOUNG MOK: Thank you. I said I would discuss a little bit about the meeting between Obama and Hu Jintao. These were apparently issues very important to the U.S., China and the world economy. They were talking about a broad framework and cooperative relations between the two. Somebody referred to it as "new giant to shift of powers" or "giants" or G2; the biggest economy in the world and then one of the fastest growing and second largest economies in the world. These were important issues. Secondly, they dealt with the Korean Peninsula issue. It is a very important part of the political security agenda. There was a lot of discussion about the Korean Peninsula, almost equal to their general principles on the cooperation and coordination. The third issue was whether China Renminbi will appreciate, how long that would take, or whether a Renminbi would not appreciate. This would be a real economic problem or make economic policy between the U.S. and China difficult. I think when the U.S. asked China to appreciate the Renminbi, the Chinese countered to the U.S. that you have a huge deficit and you have huge debt. The U.S. doesn’t save and spends too much; more than you produce. And when Obama asked Hu Jintao to address the question of imbalance of trade between the two countries, Chinese Minister of Commerce, Chen Deming said that this is not caused by the currency rate. This has been basically caused by the shifting global production structure. Chen added that the Chinese are importing components from South Korea and Japan to assemble and ship products to the United States. He said that this is not really the Chinese that are exporting. This is really South Korea and Japan. I think this summit in Korea is very important for many reasons. We are dealing with the Korean Peninsula situation, which is very close to both the U.S. and China. We are talking about whether and how we approach North Korea. We can go for dialogue with the North on the [?? 01:16:13] or we must do something that North Korea will react with a more genuine intention and more seriousness. This is one test. Secondly, as the U.S. media reported, China's most important trade partners are the U.S., Japan and South Korea. And then, for South Korea, Japan and Indonesia, most Asian countries and even for Australia; the largest trading partner is not the U.S. It's China. So the trading relationship between the U.S. and China is a very important issue to Korea, Japan and Taiwan. As you said before, the U.S. accounts for about 25 percent of world production; and China, Japan, South Korea, Taiwan; those four countries account for the same 25 percent of world GDP. So these two countries are equal to the whole European nations, the EU, as you said. So the relationship between the U.S. and China is a vital issue, also to Korea. I'm saying this half-jokingly and half-seriously. You didn't really come up with this issue of a location. It was never a problem. Because why Korea is more important than any other G20 member is not only because President Lee Myung-Bak and Korean officials are very bright in bringing other nations and then highlighting key issues, and succeeded in coordinating the final [political ?? 01:18:09] presence. But also I think Korea's location is very unique. Korea is in between China and Japan, and as Hu Jintao and Obama declared yesterday, China is welcoming U.S. as an Asia-positive nation. So Korea is surrounded by world powers and struggling with the worst Communist country like North Korea, and then sitting with the really important countries like China and Japan. So Korea's role does not end as just a middle economic power, but is a central location. There is a spirit of survival, struggling with big countries and struggling with the worst behaved countries in the world. I think that is another unique character of South Korea. I wish to stop here by reminding you that China-U.S. relations is a very important key, also, to Korea's interest. Thank you.
STEPHEN NOERPER: Thank you all again for a lovely morning. We really appreciate your kind attention and support. We'll see you back here at The Korea Society. [Applause] Executive Policy Breakfast with Dr. Colin Bradford Senior Fellow, The Brookings Institution and the Centre for Global Governance Innovation ABOUT THE PROGRAM Seoul successfully staged the G20 world leaders summit, an event not without challenges, and faces the question of “now what?” Dr. Colin Bradford explores Korea’s successes but also the challenges faced and remaining by way of institutional and global governance. He will talk about the next steps in the G20 process, as Korea extends the effort forward to France and Mexico and as Korea seeks to cast a lasting imprint by way of enhanced economic security for the region and world. He will also explore the significance of the economic summit for Korea’s regional and global standing. The Korea Society’s senior vice president, Dr. Stephen Noerper, will facilitate the discussion and offer political and security-related observations. The discussion will explore the foundation laid for the 2012 Nuclear Security Summit, a priority for the Obama and Lee Administrations and one that has taken on new importance in light of heightened tensions on the Korean Peninsula. ABOUT THE SPEAKER |
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Thursday, January 20 Executive Policy Breakfast with Dr. Colin Bradford Senior Fellow, The Brookings Institution and the Centre for Global Governance Innovation ABOUT THE PROGRAM Seoul successfully staged the G20 world leaders summit, an event not without challenges, and faces the question of “now what?” Dr. Colin Bradford explores Korea’s successes but also the challenges faced and remaining by way of institutional and global governance. He will talk about the next steps in the G20 process, as Korea extends the effort forward to France and Mexico and as Korea seeks to cast a lasting imprint by way of enhanced economic security for the region and world. He will also explore the significance of the economic summit for Korea’s regional and global standing. The Korea Society’s senior vice president, Dr. Stephen Noerper, will facilitate the discussion and offer political and security-related observations. The discussion will explore the foundation laid for the 2012 Nuclear Security Summit, a priority for the Obama and Lee Administrations and one that has taken on new importance in light of heightened tensions on the Korean Peninsula. ABOUT THE SPEAKER |
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