By Lee Hyo-sik
South Korea has grown into the world's 13th largest economy and the 11th largest trading nation over the past 60 years, rising from the ashes of the 1950-53 Korea War. But the country still has a long way to go to achieve its goal of becoming an international financial center as it has even failed to make it into the top 50 in the latest international financial hub ranking.
The Roh Moo-hyun administration championed the financial hub plan and unveiled a series of ambitious measures, including providing tax breaks over the past five years to turn the country into an international financial powerhouse.
But the Roh government apparently failed due to anti-foreign sentiment, inconsistent policies and militant labor unions.
Foreign analysts have pointed out that Korea's anti-foreign sentiment is the biggest obstacle to the hub plan, adding the country should deregulate the financial market, lower taxes, and create a more foreign-friendly residential and educational environment.
Citing its Global Financial Centers Index (GFCI), the City of London Corp. Thursday announced a list of the top 50 financial centers in the world. London topped the list, followed by New York, Hong Kong and Singapore.
The index is based on a number of existing rankings in combination with a regular survey of 1,200 senior industry figures.
Among Asian cities, Tokyo came in ninth, followed by Dubai at 24th. Even Shanghai and Beijing put their names on the list, ranking 31st and 46th, respectively.
Foreign analysts here said it is no surprise that Korea is lagging far behind its Asian rivals in the race to become a regional financial hub.
``Seoul did not make it to the list because it is not an international financial center. I do not think Korea wants to be one,'' said Michael Breen, president of Insight Communications Consultants in Seoul.
He said what it means to be a financial hub is different to the Korean government and people from international communities. ``Being a financial center in Seoul means a strong local financial industry, whereas to international communities, it means a regulation-free environment where all types of financial activities are allowed,'' Breen said.
He said Korea's public sentiment opposes foreign companies and investors, well illustrated by the Lone Star case, adding it is the mentality of the people who don't want Seoul to be a global financial center.
``Reforming the taxation system and building more international schools and hospitals will definitely help Korea attract more foreign investment. But above all, the government should first decide whether or not it wants to become a place like Singapore or Dubai,'' Breen suggested.
Meanwhile, Seoul Financial Forum made a number of policy suggestions to the Lee Myung-bak government early last month.
It said the new government should act in a more coordinated manner than the previous administration, adding it should set up a presidential-level program management office that will effectively coordinate all facets of the government's efforts for the financial hub plan.
It also stressed the government should implement policy changes and reforms in a coherent manner, which is the key to creating a business-friendly environment.
The forum also suggested that the government should strengthen professional capabilities of regulators, reform the tax system and administration, improve management-labor relations and ease anti-foreigner sentiment.