April 30, 2024

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Finance Minister Choi Sang-mok preparing to board a plane at Incheon International Airport in Incheon, west of Seoul, Tuesday to take part in annual meetings of the International Monetary Fund and the World Bank in Washington this week. (Yonhap)

Finance leaders from South Korea, the United States and Japan were set to hold their first-ever trilateral meeting in Washington on Wednesday, to step up economic cooperation amid heightened geopolitical risks in the Middle East.

Finance Minister Choi Sang-mok departed for the US on Tuesday to attend the three-way meeting, as well as a meeting of Group of 20 finance ministers and central bank presidents as part of the annual Spring Meetings between the International Monetary Fund and the World Bank, scheduled to take place between Wednesday and Friday.

According to the Ministry of Economy and Finance on Tuesday, Choi is to meet with US Treasury Secretary Janet Yellen, and Japanese Finance Minister Shunichi Suzuki to “strengthen economic and financial cooperation to stabilize global economic order.”

The US Department of Treasury said the gathering would focus on “sanctions on Russia and Iran to secure supply chains and build climate and financial resilience in the Pacific Islands.”

Amid the growing tensions in the Middle East due to Iran's retaliatory attacks on Israel, eyes are on whether the financial chiefs of the three countries will jointly respond to the geopolitical crisis and economic security threats.

The Middle East conflict fueled further concern over the tumbling Asian stock market and their weakened currencies against the US dollar after the US Federal Reserve showed signs that it would continue holding interest rates steady for longer than expected.

Top finance policymakers from Korea and the US held meetings in 2016 and 2022, and meetings between the finance ministers of Korea and Japan resumed last year after a seven-year hiatus, as the strained relations between the two countries eased. The Wednesday meeting is the first trilateral gathering between the three countries' finance chiefs.

The meeting is a follow-up event to a trilateral summit between South Korean President Yoon Suk Yeol, US President Joe Biden and Japanese Prime Minister Fumio Kishida, which took place last year at Camp David on Aug. 18.

At the summit, the three leaders agreed to strengthen cooperation in areas such as promoting regional security, strengthening deterrence, coordinating development and humanitarian aid, and responding to North Korea's illegal cyber activities.

During the ministerial roundtable discussion on support for Ukraine, Choi plans to present follow-up measures in line with the commitments made by President Yoon last September to provide $2.3 billion in aid for the war-torn country to help it restore peace and rebuild following its war with Russia.

In the first session of the G20 Finance Ministers' Meeting, the Korean minister plans to propose the need to strengthen cooperation with various entities, including the private sector, to achieve carbon neutrality and fair transition goals which seek to ensure that the substantial benefits of a green economy transition are widely shared, while also supporting those who stand to lose out economically.

On the second day of the G20 Finance Ministers' Meeting, the Korean government plans to present measures to improve the international financial system for sustainable growth, including reform of the multilateral development bank in response to the new international financial environment.

On Friday, Choi will take part in the joint World Bank-IMF Development Committee meeting to discuss progress on the World Bank Evolution Roadmap put forward during the same event held in Marrakech, Morocco, last October. The roadmap detailed ways to strengthen the bank’s operational and financial model, enhancing its country-driven model, including an agreement on eight global challenges and the $50 billion of additional lending capacity over the next ten years.

Choi plans to meet with Ukrainian Finance Minister Serhiy Mykhailovych Marchenko to sign a framework agreement for the Korea-Ukraine Economic Development Co-operation Fund to lay the legal groundwork for supporting Ukraine's mid-to-long-term aid package.

Choi will hold a meeting with Roberto Sifon Arevalo, global head of sovereign analytics and research at S&P Global Ratings, to brief Arevalo on Korea's economic situation and policy direction this year. He will reveal plans for continuing efforts to maintain the solid external credibility of the Korean economy.

By Park Han-na (hnpark@heraldcorp.com)
The Korea Herald