First Vice Minister Kim Beomseok attended the First 2025 Group of Twenty (G20) Finance Ministers and Central Bank Governors Meeting, held in Cape Town, South Africa, from February 26^th (Wednesday) to 27^th (Thursday).

*       (Session 1) Global Economy                        (Session 2) International Financial Architecture            (Session 3) Infrastructure                          (Session 4) International Taxation

 (Session 5) Joint Finance and Health Task Force           (Session 6) Financial Sector Issues          (Session 7) Sustainable Finance

In Session 1, which covered key risk factors in the global economy and responses, VM Kim expressed his support for discussing the three agenda items^* proposed by the chair country and emphasized the need to explore fundamental solutions to enhance the soundness and dynamism of the economy in response to structural challenges such as the rise of protectionism, climate change, and technological transitions.

▶  Enhancing global economic resilience amid risks to sustainable and inclusive economic growth.

▶ Macroeconomic policies and structural reforms for stronger economic growth in the context of risks from rising temperatures, severe weather, and climate change.

▶ Structural reforms needed to enhance the productivity growth effects of technology and AI, within the context of demographic changes and migration flows.

In particular, VM Kim noted that Korea was able to quickly regain market confidence despite the shock it experienced last December, based on principles such as improving fiscal soundness, managing risks in the real estate and financial sectors, and maintaining a market-driven economic growth model; he underlined the need for each country to work towards building reliable and sustainable fundamentals.

In addition, VM Kim stressed the importance of bold structural reforms to boost economic dynamism. He introduced Korea’s shift towards a private-sector-driven economic framework, which involves easing unnecessary regulations, expanding investments in future high-tech industries, and implementing structural reforms in four key sectors: healthcare, pension, labor, and education. He also called on the G20 members to discuss meaningful policies and best practices related to structural reforms.

In Session 2 (International Financial Architecture), he called for the attention of member countries to key issues such as the reform of Multilateral Development Banks (MDBs), addressing debt vulnerability, and ensuring financial stability, aiming to build a resilient international financial architecture.

In particular, he highlighted that, in order to resolve the debt issues of developing countries, the focus must be on addressing the root causes of vulnerability, going beyond debt restructuring and liquidity support. He called for increasing policy support and technical cooperation at the G20 level to strengthen debt management capacity and facilitate structural reforms in each country.

In Session 4 on international tax cooperation, he expressed overall support for the discussion proposed by the chair country on the implementation of the digital tax, domestic resource mobilization in developing countries, and tax inequality. 

Most of all, he underlined that amid the rapidly changing global economy driven by the spread of artificial intelligence (AI), reforming the international tax system to adapt to digitalization is essential; given the nature of international tax systems, which involve coordination among multiple countries, multilateral cooperation and consensus-building at the G20 level are crucial.

Furthermore, regarding domestic resource mobilization, he suggested that international organizations and regional tax organizations continue discussions on providing technical support tailored to the needs of developing countries. He also pointed out that the institutional improvements made in the international tax system so far must be accompanied by the implementation capacity of developing countries to be truly meaningful.

※ Instead of adopting a communiqué, this Finance Ministers Meeting issued a Chair’s Summary.

(https://g20.org/g20-media/chairs-summary-1st-finance-ministers-and-central-bank-governors-meeting-cape-town-south-africa-26-27-february-2025/)

Please refer to the attached files.