Vice finance ministers effectively kicked off the Group of 20 (G-20) nations summit by holding a series of talks Monday to finalize key agendas to be agreed upon at the upcoming global economic leaders' meeting here in Seoul.
The closed-door vice finance ministers' meetings aim to fine-tune such outstanding issues as foreign exchange policies, current account imbalances and the establishment of a global financial safety net that is to be included in the "Seoul Declaration" to be announced at the end of the two-day summit on Friday.
The local summit preparation committee and finance ministry said the vice ministerial talks that will run through late Thursday are expected to deliberate on an initial draft that was sent to all member countries over the weekend.
The draft is based on the communique released at the G-20 finance ministers' meeting held on Oct. 22-23 in Gyeongju.
"As chair of this year's summit meeting, South Korea sent the draft for the Seoul Declaration so each country can coordinate their views and provide feedback," said a government official, who declined to be identified.
He said vice ministers will report on the progress of the talks to leaders and finance ministers of the G-20 countries who are expected to iron out any outstanding issues before the summit officially begins on Thursday.
"It may be hard to make headway on setting a numerical limit on the size of a current account surplus or deficit that can hurt sustainable growth, but there is a broad understanding that changes are needed to prevent conditions from deteriorating any further," the insider said.
Without going into details, he said he expects a general guideline on current account imbalances may be reached in Seoul.
Besides the currency and current account issues, vice ministers are expected to agree on a "standstill" arrangement on trade protectionist measures and work out details for the "Seoul Action Plan" that is designed to seek a framework for strong, sustainable and balanced growth by getting countries to follow set monetary and trade policies that do not hurt other nations.
On the Korea Initiative that calls for the setting up of a global financial safety net, officials are to touch on the use of the International Monetary Fund's (IMF) precautionary credit line that can help ease emergency liquidity problems of fundamentally sound countries and greater use of flexible credit line systems.
The G-20 summit can also help plot a course for various regional safety net arrangements around the world.
In addition, the vice ministers are expected to endorse the multi-year action plan that will commit G-20 countries to meet the United Nations Millennium Development Goals by 2015, and outline agreements to reallocate IMF quotas from advanced countries to underrepresented countries.
At the Gyeongju meeting, ministers agreed to transfer 6 percent shares from advanced European economies to emerging economies, such as China and South Korea, while over the weekend, the IMF's executive board confirmed such measures.
Under the changes, South Korea's quota will rise to 1.8 percent from 1.41 percent at present, with stakes for China's jumping from 4 percent to 6.39 per cent, the third biggest after the United States and Japan. Seoul's stake will be the 16th biggest among 187 member states, up two notches from its previous position of 18th.
Local organizers, meanwhile, said tighter regulatory oversight on financial regulations as agreed upon in the so-called Basel III requirement outlining tightened capital flow and liquidity rules, and better oversight over significantly important financial institutions (SIFI) will be worked out.
Collapses of SIFIs can have severe consequences for the global economy, with many countries concurring on the need for more control over such institutions following the debacle of U.S. firm Lehman Brothers in late 2008.