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Big Economic Effects Expected From G-20 Summit

Posted October. 31, 2010 05:13,   


The Group of 20 summit in Seoul is expected to offer South Korea a huge opportunity to enhance its national brand.

The event is expected to allow the country to promote its economic achievements among world leaders, their delegations and journalists and help the nation enhance its undervalued national competitiveness. In addition, the summit will likely produce big economic effects, helping raise exports and promote Korean businesses.

Major global media including the U.K. daily Guardian say the G-20 summit will likely have a bigger impact on South Korea`s national brand than the 1988 Seoul Summer Olympics did.

○ Generating effects

Samsung Economic Research Institute forecast that hosting the G-20 summit will give South Korea an economic effect of 21.5 trillion won (19.1 billion U.S. dollars) or more. The figure is equivalent to the export of million Hyundai Sonata mid-size sedans and that of 165 large oil tankers that cost 110 million dollars per unit.

The summit is also expected to create 112,000 jobs, equal to 40 percent of all jobs created in the country in this year`s first half. Samsung said the summit will likely raise the economic growth rate by around 2 percentage points.

The (South) Korea International Trade Association foresees far greater effects of more than 31 trillion won (27.6 billion dollars), including the creation of 166,000 jobs. A survey conducted by the association found that domestic exporters expect the event to increase overseas shipments by 22.9 billion dollars.

○ Opportunity to promote intangible assets

The G-20 summit will also provide the opportunity for South Korea to promote its intangible assets and tradition to the rest of the world.

Despite a history spanning more than 5,000 years, South Korea is known mostly to the world through its modern history, resulting in the undervaluation of traditional and natural Korean heritage. In the national competitiveness ranking by Samsung and the Presidential Council on National Branding, the country ranked 24th to 26th among 30 member countries of the Organization for Economic Cooperation and Development in historical attractiveness, natural scenery, classic literature and traditional music.

The preparatory committee for the summit is preparing a program for promoting traditional Korean culture among participants and foreign media members. The committee plans to enhance the national image by giving them opportunities to experience Korean culture and promoting traditional Korean culture through media tour programs.

Expectations are growing that a successful G-20 summit will likely reduce the “Korea discount” caused by the nation’s geopolitical factors. Due to the military threat from North Korea, South Korea is relatively undervalued in its national competitiveness and international confidence.

When leaders of major countries and businesses see with their own eyes the country’s stable political situation and economic condition as reported by global media, much of South Korea`s political and military image abroad will likely improve.

○ NE Asian hub for int`l conventions and exhibitions

Seoul says a successful hosting of large-scale global events like the G-20 summit will likely help the country become a Northeast Asian hub for international conventions and exhibitions.

The so-called MICE industry -- meetings, incentive travel, conventions and exhibitions -- increases employment and exports at the same time. Germany rakes in 25 billion euros, or 1 percent of its GDP, from the sector.

South Korea earns about 23 billion dollars annually from hosting global conventions and exhibitions. The trade association estimates that a successful G-20 summit will increase the number of international conventions and exhibitions in the country and that of foreign visitors each by 10 percent. The economic effects will equal 2.5 billion dollars in higher exports, 46 million dollars in tourism revenue, and 16,000 new jobs.

The government will also expand the domestic MICE industry by linking the Seoul COEX, Incheon’s Songdo International Business District and Gyeonggi Province’s KINTEX as the three axis of the industry.