[Opinion] Financial Hub

Former U.S. Federal Reserve Chairman Alan Greenspan said, “If a country wants to be a world-class financial hub, what’s urgent is not geographical position, but the systematic basis for it,” at the Asian Financial Centers Summit in Seoul yesterday. In other words, financial law should be completed not by being influenced by political compulsions, and regulations should be lifted in order to gain the trust of overseas investors.

He also talked about the importance of adequate market scale, sound investment culture, and a system aimed at nurturing professionals through a live satellite address.

A financial worker who has been to Luxemburg, a financial hub of Western Europe, said, “People can speak several languages and they are very friendly,” and added, “Foreign financial workers feel as comfortable when visiting Luxemburg as if they returned to their home,” A wide range of financial institutions from every country have flocked to there, thanks to a variety of advantages such as social and cultural backgrounds, the location surrounded by Belgium, France and Germany, a user-friendly financial system, and its knowledge-rich manpower. Luxemburg has become one of the strongest financial countries in the world and is a match for the United Kingdom.

The number of cities that are within two hours and a half by plane from Seoul and have the populations of more than one million amounts to 43.

Moreover, Korea’s economy scale ranks 11th and foreign exchange reserve takes the fourth place in the world. In this regard, Seoul seems to be well equipped with financial and geological conditions which will motivate it to be a financial hub in Northeast Asia. Under these circumstances, President Roh’s participatory government set up strategy for a financial hub in Northeast Asia as affairs of state in 2003. Since then, the government has made every effort to reform financial system by submitting the proposed capital market integration bill. However, the government has not produced anything tangible.

According to a report released by Korea Development Institute (KDI), Korea is at the bottom of the competitive terms including government regulations, relations between employers and workers, tax benefit, residence environment for foreigners and English ability. “Doing Business in 2006” released by the World Bank showed that how overseas investors do business in Korea ranks 27th. Singapore and Hong Kong, which already appeared as Asia’s hubs, take second and seventh place, respectively. Alan Greenspan encouraged us to say through a live satellite address, “If Seoul makes progress more and more, it will play a pivotal role as an International financial centre,” Only several terms for becoming a hub should come first without an absurd saying. It needs to be an actual action.

Lim Kyu-jin, Editorial Writer, mhjh22@donga.com