Seoul emerging as Asia`s financial hub

Asia, a newly rising force in the world economy, is leading the global recovery from last year`s financial-market meltdown and ensuing economic recession. Korea is part of the Asian locomotive and at the center of the region`s fourth-largest economy is the city of Seoul, the national captial.

Although the crisis, which was sparked by the collapse of Lehman Brothers in September 2008, has hit hard some of the financial centers in the West, it has not harmed Seoul`s potential as an international financial center, city officials said. Rather, the crisis has offered the city an opportunity to expand further.

The officials noted that the city`s ranking in the Global Financial Centers Index went up.

Seoul, which ranked 53rd in the March installment of the index, shot to the 35th spot out of a total of 75 cities assessed in September.



"Asian centers are growing strongly but the speed and size of the surge is surprising," said a spokesperson at the City of London Corporation.

The GFCI, commissioned by the City of London Corp. and compiled by independent Z/Yen Group every six months, tracks the underlying competitiveness of financial centers around the world. It is based on surveys of finance professionals around the world and various competitiveness indicators.

Seoul`s advance comes amid signs that Korea`s global economic and financial importance is growing.

The Korean economy recorded the highest second-quarter growth rate of 2.6 percent among members of the Organization for Economic Cooperation and Development after becoming one of the few to register positive growth rate in the first quarter.

"Korea will recover fastest among the OECD countries," World Bank Senior Vice President Justin Lin said early this year.

Many experts also say Korea is leading a global economic rebound, along with China and other Asian economies, and is well positioned to play the role of a balancer between advanced and developing economies in the post-crisis world order being drawn up by the Group of 20 countries.

Korea currently sits as a member of the 2009 G20 management troika, along with the United Kingdom and Brazil, and is to chair the group in 2010. The G20 summit next year will be held here, with Seoul leading the race for the host city.

Korea`s ambition to make Seoul a representative financial hub for Asia began well before the crisis. Seoul Metropolitan Government drew up a roadmap to realize the vision in 2007, lending support to the central government`s plan to nurture the nation`s financial industry as a new engine of economic growth.

According to the 2008 World Federation of Exchanges report, Korea ranks fourth in total value of share trading, third in value of bonds listed in Asia, and first in the world in stock index option volume.

The Capital Market and Financial Investment Business Act, which came into effect in February 2009, is hoped to be a catalyst to the advancement of Korea`s financial services industry, as it allows financial institutions to offer a wider range of services and products.

Korea`s recent upgrade to the developed-market status by the FTSE, an international equity index compiler, also meant an improvement in Korea`s global status.

As part of the financial hub plan, the government designated Seoul`s Yeouido as the nation`s "international financial cluster" in January this year and has been implementing a variety of projects, including the construction of a major building complex which will house multinational financial institutions.

Home to the financial authorities, stock exchanges, a concentration of Korean and international financial institutions, and the national parliament to top it off, Yeouido is the most appropriate area in Korea for an international financial center. Furthermore, proximity to airports and a beautiful natural environment along the Han River make Yeouido all the more attractive as a business destination, officials say.

The IFC Seoul project, a unique collaboration between the Seoul Metropolitan Government and AIG Global Real Estate, is expected to be completed in phases from 2011 through 2012. The 500,000 square meter world-class mixed-use project includes three premium commercial office towers, a five-star hotel, and three-level luxury retail mall, multiple cinema complex, fine dining and significant new public outdoor space. IFC Seoul is expected to lure not only global financial companies but also legal and consulting services firms as its major tenants.

Seoul`s policy of "Culturenomics" aims to combine cultural and financial industries to sharpen the city`s competitive edge. Design is now an integral part of Seoul`s evolutionary growth, and the "Han River Renaissance Project" aims to achieve the world`s most environmentally friendly urban renovation.

(milaya@heraldm.com)







By Lee Sun-young