Deputy Prime Minister and Finance Minister Hyun Oh-seok said that G20 economies should do more than simply promote strong, sustainable and balanced growth through their fiscal strategies and reforms.

In an opening speech for the G20 Seoul Conference on Wednesday, the deputy prime minister said that G20 members should push efforts to create more jobs and safety nets to cope with future financial crises.

They should also implement measures to prevent negative spillover effects from the U.S. tapering of its quantitative easing through collective action and coordinated policy, he added.

“To minimize disruption in the global financial market stemming from QE tapering, the G20 should continue to cooperate to manage the exit in an orderly manner,” Hyun said.

“We should minimize negative spillovers that the QE taper could entail in the emerging markets.”

The G20 Seoul Conference, hosted by Australia’s Department of Finance, the Korea Institute of Finance and the Korea Development Institute, kicked off Wednesday.

It has invited some 200 dignitaries including finance vice ministers, deputies, professors, researchers and analysts of the G20 to discuss global financial market systems and assess their financial policies.

Hyun also said that G20 countries should boost policy coordination to create more jobs and encourage more private investment amid high youth unemployment worldwide.

Korea, for instance, will further deregulate to boost private investment and upgrade the service sector, whose productivity is much lower than that of the manufacturing sector.

This is in line with the Korean government’s efforts to achieve an employment rate of 70 percent over the next four years, Hyun said.

He said that the G20 needed to establish a “multi-layered defense” or safety-net systems through regulatory and policy reforms against another possible crisis.

“The hyper-connectedness of the world economies requires collective action by both advanced countries and emerging countries,” Hyun said.

Meanwhile, Bank of Korea Gov. Kim Choong-soo downplayed concerns that Korea could face deflation and follow in the path of Japan, which suffered an economic slump that lasted more than a decade.

He said during an economy-related meeting that it was inappropriate to say that Korea faced a risk of deflation when the country was expected to grow around 3 percent at the end of the fourth quarter of 2013.

Korea has had low inflation at around 1 percent over the last year, well below the BOK’s target range of 2.5-3.5 percent for 2013-2015.

However, Korea’s core inflation, excluding food and energy prices, hit 1.8 percent last month, and it is expected to pass 2 percent after increased government welfare spending takes effect.

By Park Hyong-ki (hkp@heraldcorp.com)