South Korea and the World Bank signed an MOU to cooperate in many international financial sectors and to open a World Bank office in either Seoul or Incheon next year. 

In the MOU signed by Minister Bahk Jae-wan of the Ministry of Strategy and Finance and President Jim Yong Kim of the World Bank, they also agreed to set up a Republic of Korea and the World Bank Partnership Fund in which Korea will chip in $90 million in the next three years. The signing took place at the Grand InterContinental Hotel in Seoul. The World Bank has decided to set up its office in Korea to strengthen the development of sustainable economic growth for underdeveloped countries. The Partnership Fund will be instrumental in creating development models among low-income nations and expanding it.

The World Bank Korea Office will be staffed by the International Finance Corp. (IFC) and Multinational Investment Guarantee Agency (MIGA) under the World Bank. The IFC will support investors in newly emerging market countries drawing from the Korean experience for economic development, while MIGA will promote direct investments in those countries providing political risk insurance for investors.

Korea’s “extraordinary” journey from a devastating war and cruel poverty to prosperity can provide a message to other poor countries that they can also develop and prosper, the chief of the World Bank said on Oct. 15.

The Korean-born World Bank President Jim Yong Kim was in Seoul to attend a meeting jointly held by the government on how to promote the sharing of knowledge on the economic development experience with poor countries.

“Returning to Seoul, the city where I was born, gives me the chance to reflect again on Korea’s extraordinary journey. And on what this journey means, not just for the Korean people, but for the world as a whole,” Kim told those at the gathering. 

Recalling the dismal conditions facing the Korean economy in the wake of the 1950-53 Korean War, Kim praised the country’s fast recovery. He cited, in particular, an improvement in the per capita gross domestic product (GDP), which jumped from less than $70 to more than $20,000 over the past six decades.

“And the country is a global leader in advanced technological industries. The message of the Korean experience is that even countries facing the most extreme adversity can develop and prosper,” he noted.

He said that he was also “inspired” by the part of Korea’s story that concerns its relationship with the World Bank, tasked with reducing poverty and helping developing countries. 

In 1963, Korea received its first loan from the International Development Association or IDA, the branch of the World Bank established to help poor countries, but it has since then turned itself around to become the 17th largest “donor” to the branch, Kim said.

Kim emphasized that the World Bank and the Seoul government are now expanding their partnership in many areas, citing the earlier announcement of a plan to open the bank’s office in South Korea next year.

“The office will provide a platform for our work together and give that work an increasing national, regional, and global profile,” he said.

Meanwhile, Finance Minister Bahk Jae-wan said in his speech that the government will endeavor to share its development know-how with the international community.

“The Korean government truly appreciates the World Bank’s leading efforts in knowledge sharing. We are more than eager to join the World Bank’s initiative in forming measures to help out developing countries,” he said.