Bahk Eun-ji has been with The Korea Times since 2012, building a career across multiple desks. She began at the Business Desk, where she conducted in-depth interviews with key figures in Korea's corporate world. Later, she moved to the Politics & City Desk, focusing on education policy and social affairs. She later served as team leader of the digital content team, leading curation efforts on the newspaper’s homepage and reshaping print stories for social media audiences to enhance digital reach. Now back on the Politics Desk, she covers the National Assembly and the Ministry of National Defense, with a renewed focus on political developments.
'Financial competitiveness is Seoul's key growth factor'
Seoul Mayor Oh Se-hoon speaks during a discussion session with Jeffrey Jones, chairman of the American Chamber of Commerce in Korea's Board of Governors, organized by The Korea Times and the city government at City Hall, Sept. 27. Korea Times photo by Choi Won-suk
By Bahk Eun-ji
Mayor seeks cooperation with central gov't to ease regulations
By Bahk Eun-ji
One of the major goals of Seoul Mayor Oh Se-hoon is to restore the capital's urban competitiveness, and he said that this is an impossible goal without achieving financial competitiveness.
“Financial competitiveness is a basic strength of a city or country, and an important economic growth factor that induces investment,” Oh said.
“You can see it from the recent expansion of Korea's fintech companies. Using science and cutting-edge technology, they have expanded their influence into both other industries and our daily lives.”
He mentioned Singapore and Hong Kong, two cities that have higher per capita income in Asia, adding that leading global companies and capital have concentrated there, enabling the creation of high-quality jobs and increases in income levels.
Among them, Singapore in particular is a competitor and a benchmark for Seoul, Oh argued.
“London and New York are financial hubs formed by the competition in global economic hegemony, and Hong Kong was a hub strategically formed through the combination of Asia's own financial markets and China's opening,” the mayor said. “But Singapore is a hub developed independently with its own strategy. As a city-state, it made financial investment its survival strategy, establishing the Economic Development Administration (EDB) and the Government of Singapore Investment Corporation (GIC), and used regulation reforms and incentives. It offers significant insight for Seoul.”
Below is an excerpt from a discussion session on Seoul's financial competitiveness and the policy direction of the city government, between Oh and the American Chamber of Commerce in Korea's Board of Governors Chairman Jeffrey Jones, organized by The Korea Times and the Seoul Metropolitan Government on Sept. 27.
A night view of Yeouido, viewed on Dec. 4, 2018. Seoul Mayor Oh Se-hoon plans to make Yeouido into a “special zone for digital finance.” Korea Times file
Q: How do you evaluate the current level of Seoul's financial competitiveness?
A: Last year, Seoul ranked 25th among 121 cities across the world in the Global Financial Centers Index, compiled by Z/Yen Group. Its ranking has remained low over the past decade.
There are two main reasons for the decline in Seoul's financial competitiveness: One is that there is a lack of vision and strategy to lure global financial institutions to Seoul; and the other is regulation-centered government policy, which has stopped global companies from coming to Korea.
As cities around the world have been competing desperately to improve their business environment and offer incentives such as reducing corporate and income taxes, Seoul has been left behind.
To attract global financial companies, relevant infrastructure should be all together in one place, but the central government has dispersed it under the name of “balanced national development.”
Tax benefits applied to financial centers in the provinces were also not applied to Seoul because it is part of the metropolitan area. Government regulations such as the 52-hour workweek are also factors that make financial companies based abroad hesitate to enter the country.
Q: You hope to increase Seoul's financial competitiveness so that it becomes one of the world's top five. Why is it important to increase this and how would you do so?
A: The goal of increasing Seoul's financial competitiveness is about more than just a numerical ranking, as it means creating a business-friendly environment where people gather, businesses gather, money flows and technology and information propagate. This would mean reviving the economy and creating jobs, so it would have very significant ripple effects.
We plan to take advantage of Seoul's potential, given that it has one of the world's best IT infrastructures, along with talented human resources and advanced fintech, to make Yeouido a “special zone for digital finance” and Seoul an “Asian hub of digital finance.”
But few global financial institutions will be willing to move to Seoul if there are no clear incentives. So we desperately need state-level policy, along with strategic approaches and efforts from all sectors. That's why we need to establish the “Invest Seoul Center.”
Invest Seoul Center, to be set up next year, may look similar to Invest Korea, but their purposes and strategies will be totally different. Invest Korea is a body under the Korea Trade-Investment Promotion Agency and seeks to attract investment on a state-level under its purpose of balanced national development. So it is focused on investment in free economic zones in regions other than Seoul. But Invest Seoul Center will be at the city level and tailored for Seoul.
Through Invest Seoul Center, we'll find out what Seoul can do on its own, regardless of what the central government has to do, such as easing regulations. We'll study global financial institutions' needs thoroughly ― such as which companies are reviewing possible transfers to Seoul, which incentives they want and what kind of business environment they want from Seoul ― then provide them with information about Seoul, persuade them and negotiate with them.
For companies moving to Seoul through engaging with Invest Seoul Center, we will provide one-stop support, from office space to financial support for rent as well as investment consulting.
Seoul Mayor Oh Se-hoon, left, listens during a discussion session with Jeffrey Jones, chairman of the American Chamber of Commerce in Korea's Board of Governors, organized by The Korea Times and the city government at City Hall, Sept. 27. Korea Times photo by Choi Won-suk
Q: Seoul's goal of becoming a financial hub in Asia may be difficult to achieve without the cooperation of the central government. What regulations need to be dealt with in cooperation with the central government?
A: If Seoul becomes an Asian financial hub, Korea's national competitiveness will increase accordingly. To achieve this important goal, the Seoul Metropolitan Government, the central government and the business sector need to team up.
However, the central government has implemented decentralization policies for major financial institutions, in a way that makes the financial competitiveness of the country retreat.
In particular, the government has been implementing a discriminatory policy that excludes Yeouido from the country's financial centers subject to benefits such as corporate and income tax reductions, because it is in the capital.
It is an unreasonable and inefficient policy to center only on balanced domestic development, when Seoul has to compete with other cities in the world.
Seoul is also not included among the “regulation-free zones” designated by the central government, although all innovation starts from Seoul and spreads to other parts of the country. I believe that a revision of laws is needed to designate regulation-free zones in the capital area.
Q: In order for Seoul to become a truly international city, various inclusive policies are needed for the increasing number of residents of foreign nationality and the growing multicultural population here. What policies will you carry out for them?
A: Over the past 10 years, the population of Koreans has been on the decline due to low birthrates, but the number of foreign nationals living in Seoul has increased by about 130,000, reaching 460,000 this year.
More than one fifth of them have lived here for more than 10 years, and the number of multicultural families also continues to increase. So it is important to have policies based on coexistence and inclusion for foreign residents in Seoul.
Seoul already has 18 support facilities for foreign national residents and each district has one multicultural family support center. Through these facilities, we try to help solve their questions about daily difficulties in various areas, such as how to get Korean language education, about school admissions and childcare, about medical services, the tax system and driver's licenses, as well as provide labor and other legal counseling.
Next year, new support centers for multicultural families covering several districts will be established, in order to provide further customized support for them. In addition, we will help marriage immigrants settle more stably and independently by expanding employment education and job opportunities for them.
We are also actively considering setting up a tentatively named Seoul Global Foundation, which will serve as a control tower for the systematic and integrated support of foreign nationals living in Seoul.