Time Running Out for Hub Strategy

South Korean economists and government leaders hope to make the country a regional business hub for Northeast Asia, but such a lofty goal isn't easily achieved. A group meeting to explore ways to improve the country's prospects suggested the government should try to attract multinational companies by creating a more comfortable living environment for foreign executives and their families. Some of the strategies proposed include higher quality of English language education, better natural environment, more political stability and improved communications facilities. One leading economist also stressed the importance of improving the convertibility of the Korean currency. But are these measures enough to displace Tokyo and draw businesspeople away from Hong Kong? – YaleGlobal

Time Running Out for Hub Strategy

Yoo Cheong-mo
Thursday, June 12, 2003

Korea needs to be more aggressive in its bid to make itself the Northeast Asian business hub, economists asserted yesterday, calling for drastic measures to make the life of foreign executives and their families here more comfortable.

Leading economists and professors gathered at a hub strategy forum sponsored by the Korea Chamber of Commerce and Industry stressed that the government needs to become more consistent and energetic in its business-hub policies.

Prof. Kim Mun-gyeom of Soongshil University said that most multinational-firm executives still rank living and corporate circumstances in Korea far below those of Hong Kong and Singapore, despite Seoul's strong commitment to the hub ambition.

"Taking a strategic approach to the hub drive and swiftly settling complaints from foreigners will be the key to the success of the business-hub strategy," Kim argued.

In this regard, Prof. Oh Ik-keun of Keimyung University, citing a string of research over the past 30 years, said that multinational companies have been attaching growing importance to the quality of education, the environment, political stability and communications in their selection of business locations.

"Above all, the government has to liberalize the establishment of international schools and English-language radio channels in Korea," Oh said, stressing efforts to make English more prevalent.

On financial-sector competitiveness, meanwhile, Park Hae-shik, a senior economist at the Korea Institute of Finance, said that further delays in policymaking will greatly slim chances for the nation to become a Northeast Asian financial center. He then urged steps to improve the won's convertibility and relations with overseas financial institutions and markets.

"More attention should also be paid to fostering the professionalism of financial-market manpower, strengthening the monitoring of capital-market flows and advancing the functions of watchdog agencies," he explained

Prof. Kwon Oh-kyung of Inha University said that the nation should take a more careful approach to its logistics-hub ambition, warning of weakening profitability as a result of excessive competition against rival hub cities.

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