It is disappointing that Seoul has failed to make it onto the list of the world's top 50 financial centers despite former President Roh Moo-hyun's ambitious goal of transforming the county into a Northeast Asian financial hub. According to the Global Financial Centers Index (GFCI) released by the City of London Corp. last week, Seoul was listed 51st among 59 cities. The ranking is a setback to the South Korean capital, which held 42nd place last September.
London reaffirmed its top position although it bore the brunt of the U.S. subprime mortgage turmoil last year. New York City remained second, followed by Hong Kong and Singapore. Tokyo ranked ninth, Dubai 24th, Shanghai 31st, and Beijing 46th. The list showed that Korea is lagging far behind its Asian rivals in the race to become an international center for finance. Why has Seoul been excluded from the top 50 list?
The answer is simple: Seoul has made little progress in improving its financial competitiveness, thus making itself less attractive than other major cities. When President Roh took office in 2003 for a singe five-year term, he came up with a Northeast Asian financial hub plan for Seoul. It goes without saying that Korea cannot improve its international competitiveness without beefing up its financial industry. However, the Roh government was long on words but short on action.
In the end, Roh had to retire on Feb. 24 without achieving his lofty goal. He only came to witness Seoul's position in the global financial market slide by nine notches. The poor results are not surprising because the Roh administration has only shouted empty slogans without concrete action plans. The nation entered its second-stage financial hub plan this year after the first stage of laying the groundwork for it over the last four years.
Under the plan, South Korea aims to turn Seoul into one of Asia's three major financial centers, including Singapore and Hong Kong, by 2015. However, it is uncertain whether this will happen. President Lee Myung-bak is also taking over his predecessor's financial hub plan. Lee's policy is to foster the financial industry as the nation's new growth engine to achieve his ``747'' growth formula ― to increase the annual economic growth rate to 7 percent, raise per capita national income to $40,000 and elevate the nation into the world's seventh-largest economy.
Lee should make all-out efforts to prevent his formula from turning out to be an empty campaign promise. He must learn a lesson from Roh's failure. It is imperative for him to push for deregulation and reform in order to sharpen Seoul's financial competitiveness and render the country more attractive to foreign investors. A financial big bang looms large next year as a new law goes into effect to consolidate the capital market. It's time for the nation to take advantage of the law to help Seoul emerge as one of the world's major financial centers.