Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Will Bangkok host Korea-ASEAN financial center?
Aerial view of Bangkok financial district / gettyimagesbank
By Park Jae-hyuk
By Park Jae-hyuk
Bangkok has been mentioned as the strongest candidate site for the Korea-ASEAN Financial Cooperation Center, given that Korea Federation of Banks (KFB) Chairman Kim Tae-young has accompanied President Moon Jae-in on his visit to Thailand from Sept. 1 to 3, according to financial industry officials, Sunday.
The Presidential Committee on New Southern Policy, a special committee focusing on developing the core concepts and strategies of the New Southern Policy, has been pushing ahead with the plan to establish a financial control tower in Bangkok or Jakarta in 2020 to help Korean financial firms expand their presence in the Southeast Asian market.
The committee is supposed to decide the center's location by October after studying its prospects with think tanks such as the Korea Institute of Finance and the Korea Institute for International Economic Policy (KIEP).
According to the think tanks, Thailand has better access to other Southeast Asian nations, because it is located in the center of the Indochinese peninsula.
The country's capital is also home to the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) with which Korea can closely collaborate in building a new ecosystem in Southeast Asia.
In addition, the KFB and the Financial Supervisory Service (FSS) invited officials of the Bank of Thailand to Korea in November 2018, to hold a seminar and strengthen financial ties with the country's financial authorities.
“Thailand, the second-largest economy among ASEAN members, is one of Korea's major partners for the New Southern Policy,” KIEP researcher Lee Jae-ho said. “As the country chairs ASEAN in 2019, it is expected to play a key role during the Korea-ASEAN summit and the Korea-Mekong summit, both of which will be held in Busan in November.”
Korea's ties with Thailand in the financial sector, however, have been weaker than those with Indonesia, since a number of Korean financial firms left Thailand during the 1997 Asian Financial Crisis despite the Thai government's attempt to dissuade them.
According to the FSS, Korean financial firms had three branches in Thailand as of June 30, while they had 23 in Indonesia.
They also planned to open four additional branches in Indonesia, while having no such plans for Thailand.
Against this backdrop, some companies reportedly want the government to open the cooperation center in Jakarta.
According to industry sources, Korean financial firms do not want to build the ecosystem from scratch in Thailand.
Furthermore, Indonesia promised to keep supporting Jakarta's financial industry, regardless of its recent decision to move its capital to eastern Borneo.
“Jakarta will remain as the priority in development and will continue to be developed as a business city, financial city, trade center and service center on a regional and global scale,” Indonesian President Joko Widodo was quoted as saying by The New York Times on Aug. 26.