The South Korean government is planning to set up the Korea-Asia Financial Cooperation Center in Bangkok or Jakarta next year to strengthen cooperation between public agencies and private companies in promoting financial cooperation with Southeast Asian countries.
Seo Byung-ho, a senior researcher of the Korea Institute of Finance (KIF), disclosed the plan at a joint meeting of the special committee on the New Southern Policy and the banking industry held at the Korea Federation of Banks’ head office in Myeong-dong, Seoul, on May 21.
Seo said, “Bangkok is strong in terms of access to neighboring countries. It has a good environment to cooperate with other countries in building financial infrastructure.” For Jakarta, Seo said networking with ASEAN government officials would be easy as the city is the seat of the ASEAN secretariat.
The center’s main roles will include cooperation with Southeast Asian countries in building financial infrastructure within the region, activating mutual trade and investment and addressing financial problems of Korean companies operating in the region. In particular, it will focus on strengthening partnership between domestic public organizations and private financial firms. Seo said, “It is important to secure a cooperation channel to improve the efficiency of infrastructure investment by South Korean financial companies. To this end, it is necessary to set up a control tower that can communicate with the governments and international organizations in the region.”
Although an increasing number of domestic financial companies are entering the Southeast Asian market, not many of them are organically cooperating with the public sector. This is why there is growing concern that South Korea lose to Japan the initiative in establishing financial infrastructure in the region. Seo said, “Japan sets up public infrastructure as 'Team Japan' consisting of the Ministry of Finance, public institutions and private financial institutions and make a profit from the private sector. We need to benchmark the successful case of Japan.”
South Korea also needs to prepare for the economic integration of the ASEAN region. ASEAN countries are recently accelerating the financial integration in the area by integrating ASEAN banks and introducing a single payment system. Notably, banks, which are chosen as qualified ASEAN banks, will be guaranteed to conduct the same business activities with local banks and at least two banks will receive approval until next year. Accordingly, competition among major countries, such as South Korea and Japan, is expected to be strong.