Financial cooperation with Middle East will help Korea overcome global economic crisis

Korea considers the Middle East as an alternative finance market beyond the slow-growing Europe and the U.S.

Members of the National Assembly, Korea’s legislature, deputy director of Financial Supervisory Service and executive members of Korean leading financial institutions formed Middle East-Korea Financial Cooperation Task Force in September 2012. They are going to visit four Middle Eastern countries(UAE, Kuwait, Qatar and Saudi Arabia) from January 9 to 15 and discuss the way to strengthen Middle East-Korea financial cooperation.

The National Assembly, the Financial Services Commission, the Financial Supervisory Service and leading financial institutions proclaimed January 9 as the ‘Korean financial Day in Middle East region.’ The team holds roundtable on Korea’s financial market and investment opportunities and discusses mutual cooperation with one hundred invited local financial officials on Jan 9 at Dubai. Since 1970s, Korea has achieved cooperation with Middle East on broader economy such as construction and energy, however, the cooperation has been sluggish in financial sector. GCC(Gulf Cooperation Council) countries have risen as the Korea’s second largest trading partner after China. The bilateral trade volume in 2011 amounts to 112.8 billion dollars and it is more than that of the U.S. or Japan.

However, Middle East’s investment on Korea is inactive. The amount is 6.6 percent of the Korean stock market(24 billion dollars) and 0.3 percent of the bond market(0.27 billion dollars).

A Korean financial official said, “Investors who have the World’s largest funding capacities, including Middle Eastern countries’ sophisticated sovereign wealth funds, and who recognize Korea’s rising sovereign credit ratings during the global economic recession, invest in Korean assets, directly or indirectly, for safe long-term returns.”

During the period, Korea representatives is planning to go ahead businesses such as holding Middle East-Korea Financial Cooperation Forum and roundtable, signing an MOU on mutual cooperation, building SME(Small and Medium sized Enterprizes) Fund and new SME Industrial Complex in Abu Dhabi and setting up a high-level network for financial cooperation.

Kim Jung-Hoon, a member of the National Assembly and a leader of the representative, said that “thanks to its ample liquidity, the infrastructure construction business which is provided against post-oil age and democratization wave after the Arab Spring, Middle East region has the sustainable growth potential. It is very important and meaningful for Korea to make deep cooperative relationship with this region to diversify funding and investment portfolios.”

Kim said, “Former president Park Jung-hee used the construction boom across the Middle East region as a leverage of the industrialization of Korea. Now, the active financial cooperation with Middle East will be the important driving force for next Korean government, led by President-elect Park Geun-hye, to protect Korean economy from the global economic crisis and make further breakthrough.”