Making Korea Financial Hub and Biz Center of N.E. Asia
FOB Chmn. Park calls on next government to continue to push strategies to create jobs and expand exports
Chairman Park Byung-won of the Korea Federation of Banks.
Chairman Park Byung-won of the Korea Federation of Banks (KFB) said in his New Year’s message that the past five years have been a period of huge achievements by banks across the country with the major achievement being overcoming the financial crisis of 2008, which led to the treasury crises of each EU member country. Because of preemptive measures taken, Korea was the first member of the OECD to recover, leading to the nation’s international trade surpassing the $1 trillion level for a second year in a row last year, making it the eighth largest trading nation in the world.
Korea’s credit ratings hit the highest level in its history last year and the nation played host to various large international events since the financial crisis began, including the G-20 Summit in Seoul and the Nuclear Security Summit, as well as winning the hosting rights for the 2018 Winter Olympics in PyeongChang and being named the home country for the Global Climate Fund head office.
This year will be one of the most critical years for Korea, as the government will be turned over to the first female President-elect in the nation’s history, Park Geun-hye, who will be inaugurated on Feb. 25. She received more than 50 percent of the popular votes cast, a first in a Korean Presidential election since direct voting was restored.
The incoming government decided to make the improvements of the living standards of the general populace its first priority by restructuring the economic policies focused on the resurgence of SMEs to create jobs and spur the economy in an effort to close the wealth gap between the rich and poor.
KFB Chairman Park said, “I, personally feel that the creation of jobs should be the top priority of the new government in order to achieve its various policy targets.” Many people without jobs start their own small businesses including shops and restaurants, but end up with failure due to excess supply and severe competition and close their businesses with so much debt that it leads to household debt problems as a social issue with more people becoming house poor.
He said he has been calling for strengthening the service industry to be a growth engine as a sure way to increase jobs because the domestic economy would be revitalized.
In order to do that the financial industry should be able to earn profits to grow continuously and attract investments and create jobs, which requires understanding from society.
The financial industry so far has been looked upon as a mere support industry for the export industry centered on manufacturing. But the financial industry should have its own capacity and growth strengthened to provide support for the sustained growth of the national economy, with Korea’s GDP ranked the 15th largest in the world.
Lately, financial firms have not been able to provide adequate financial support to Korean exporters operating around the world, losing opportunities to make profits.
The financial firms should be like Hyundai Motor and Samsung Electronics °™ truly global operators in both form and substance °™ with the government understanding that they have the potential to be like those globetrotting Korean companies and providing them with the same policies that went to the manufacturing companies and for the growth of the service industry in general.
Such policies were reflected in the strategies to make Korea a financial hub of Northeast Asia since 2003, such as the Free Economic Zones that were created to attract high value-added service industries focused on financial firms, but the move has lost its steam since the financial crises.
“We ought to continue to make efforts to strengthen the competitive power of the financial industry, attract Asia head offices of global financial companies to Korea, and support the overseas advancement of Korean financial firms to make Korea not only a financial hub of Northeast Asia, but also a business center of the region. And the new government should make this the nucleus of its strategy in the days ahead,” Park said.