Asia Society's 14th Asian Corporate Conference



Envisioning the World's Next Great Market: Korea and the Economic Future of Northeast Asia Asia Society Dow Jones

Opening Keynote Address
Gala Opening Dinner

Goh Kun
Acting President - Prime Minister
Republic of Korea

Chairman Nicholas Platt, Distinguished Guests and Ladies and Gentlemen;

On behalf of the Korean Government, I welcome you all to Seoul. I am delighted to see this 14th Asian Corporate Conference take place here. And, my heartfelt congratulations go to all of you and to Asia Society.

For the past half century, Asia Society has continued its committed work to promote better understanding of Asia among American people. Korea deeply appreciates this important contribution of Asia Society and thanks the leadership of the organization for the great achievement.

Ladies and Gentlemen,
Northeast Asia has now emerged as the world’s economic powerhouse. This was made possible by China’s well-known dynamism, together with the proven records and potentials of Korea and Japan.

And, this 14th Asian Corporate Conference of Asia Society properly notes this new dynamics, with its theme, “Envisioning the World’s Next Great Market: Korea and the Economic Future of Northeast Asia.”

Without a doubt, Northeast Asia deserves the recognition for being one of the most dynamic regions of the world. It has a total population of more than 1.5 billion. The total amount of international trade conducted by the economies in the region amounts to 2 trillion US dollars. The region currently accounts for 20 percent of the global GDP, but forecasters say the share will exceed 30 percent in 10 to 15 years. There is no doubt that, together with Europe and North America, this region is one of the three pillars of the global economy.

And, within this important region, Korea sits at a highly strategic location that links the Eurasian continent to the greater pan-Asia Pacific and vice versa.

But, this location alone does not offer all the comforts. It is particularly so, as we recognize the fact that this region has yet to overcome the legacy of ‘zero-sum’ competition and march together into a ‘win-win’ era.

Korea recognizes this challenge, as we hold on firmly to the national vision to promote peace and prosperity for all in the region.

To realize this vision, we work on two goals. First, we are determined to work out North Korea’s nuclear situation—based on peaceful means—and maintain peace in the Korean Peninsula.

Second, we are committed to building the foundation and environment to realize a regional economic hub in Korea.

Ladies and Gentlemen,
What add to the aforementioned advantageous geographic location for Korea are our IT infrastructure, good-quality human resources and commitment to higher education.

These points of our strengths offer the bases, upon which we work on our ambition to become regional hubs for logistics, finance and R&D.

Incheon Airport and Busan and Gwang-yang Seaports offer world-class logistics infrastructure. And, we have recently introduced the world’s-fifth-ever high-speed express train called KTX. This KTX offers the starting point of the 21st century iron silk road that will continue on through the Trans-Korea Railroad—that we are working on to reconnect—and further continue on into Europe through the Trans-Siberian and the Trans-China Railroads.

For sure, physical infrastructure alone does not bring everything. We know that international businesses will have to bring their investments to Korea, if Korea really wants to become a regional economic hub. So, we are working hard for that.

We have designated Incheon, Busan and Gwang-yang as ‘Free Economic Zones’ where international investors can come in freely and conduct their businesses freely. After these recent designations, a US corporation, Gale, and a British corporation, Amec, have become the starters that join these zones and open their corporate operations.

We are also committed to improving our system of incentives offered to foreign investors. That is why we continue to revise laws and regulations designed to promote foreign investment and to offer tax and other benefits.

We are also keenly aware of the needs for further improving living environment for international business managers and other professionals. That is why we recently announced a plan to open a new foreign school in Yongsan, one of the central districts in Seoul. We are also working to come up with a 17 percent single-rate earned-income-tax system for foreign managers and employees. In addition, we are in the process of introducing cash grants to foreign high-tech investments.

Indeed, we are determined to make Korea’s business environment better than those of our competitions. We recognize that one of the important tasks in doing so is continuous deregulation drive.

Relating to this issue, we recently set up in my Office of Prime Minister. I myself have taken direct charge of this Center, in order to ensure efficacy and expediency in improving the business environment.

In pursuing our goal of building a regional financial hub here in Korea, we are working to improve our financial systems—including foreign exchange market—to meet global standards.

We are doing this, keeping in mind that we should be able to build a financial hub specializing in asset management. We know that the large sizes of foreign exchange reserve and public pension funds we have will offer favorable bases to pursue this goal.
To make this possible, we will actively invite international asset management companies and encourage domestic competition. We are also planning on establishing Korea Investment Corporation for this purpose.

On labor issues, we have no disillusion. Labor relations in Korea have been a liability for our economic growth. We saw, early last year, eruptions of numerous labor disputes, as expectation ran high for the newly inaugurated administration.

However, by the end of the year, number of illegal strikes has decreased by as much as 60 percent as compared to the previous year. We also saw a 20 percent drop in workday loss. We believe that the which was launched in May last year played a key role in making these improvements possible.

This year, management and labor leaders came up with ‘Job Creation Accord’ where the labor ledged moderation on wage increase demands and the management pledged cooperation for job stability.

The Korean government is encouraged by this Accord. And, we will continue the efforts to promote cooperation in labor relations and to improve labor laws and regulations.

Ladies and Gentlemen,
Peace on the Korean Peninsula is an absolute prerequisite for ensuring peace and prosperity in the entire Northeast Asian region.

So far, what made peace possible on the peninsula and in the region has been the Korea-US alliance. Now, this long-time friendship is entering a more matured stage.

Thanks to this firm alliance, the Korean government, together with those of neighboring powers, has been able to pursue peaceful resolution of North Korean nuclear issues. And, recently, we are making important progresses to this end.

For instance, we succeeded in creating a mechanism of working group meetings at the second round of the Six Party Talks. This is an important step towards making the discussion channels regular and more productive.

At the same time, the Korean government continues to pursue South-North bilateral economic cooperation efforts, which includes joint projects for building an industrial complex in Gae-sung and reconnecting railroads.

And, inter-Korean ministerial talks are continuing. And, a high-level military meeting has been agreed just last week. Looking at all of these developments, you can be assured that tangible and meaningful progresses are being made towards achieving permanent peace on the Korean Peninsula.

Ladies and Gentlemen,
For the past two months, Korea has gone through the first ever experience of presidential impeachment. Despite this great challenge, however, we have succeeded in ensuring great stability in the country. And, we held a National Assembly election that went down the history as the cleanest ever.

As the result, Korean people produced a stable political landscape where the party that supports the President came in as the majoirty in the legislature, which has not happened for the past 16 years. What’s more, we saw many reform-mined, young and new faces joining the legislature.

We know this progress in politics will place Korea a level higher in its long efforts to further develop democracy toward greater transparency and maturity. In addition, this result will offer additional momentum for reform, which will make Korea a more competitive economy and a better place to do international business.

In other words, the result of the recent election will strengthen and speed up what we have been working on, rather than introducing any new change of directions. It is particularly so with regard to economic policies and foreign relations.

In economic policy, we will see continuity in our main direction, with emphases on market principles and openness. In labor relations, we will continue to seek cooperation and win-win by implementing what has been already agreed. We will pursue a virtuous circle of greater economic growth leading to improved equity.

In foreign relations, we will seek to further strengthen our alliance with the US and continue on with the overall directions of flexibility and practicability that we have maintained so far.

Ladies and Gentlemen,
Korea’s volume of trade amounts to as much as 70 percent of our national GDP. This alone justifies our policy for actively promoting openness that we have pursued all along.

We recently had our first Free Trade Agreement with Chile take effect. Now, we are discussing such agreements with Japan and Singapore. We are also undertaking domestic feasibility studies for an FTA with ASEAN. Private-sector-led feasibility studies are jointly underway in Korea, China and Japan for an FTA among the three countries.

Along with these, we will continue on with our active participation in multilateral efforts for promoting global openness at the WTO Doha Development Agenda negotiations.

On the subject of regional cooperation, what we are seeking is strengthening of the networks of interdependence. We know that East Asia has lagged behind other regions in regional cooperation. For this reason, we will find greater willingness to catch up together.

And, in these regional efforts, what we are pursuing is not exclusion, but inclusion. Based on the principle of ‘open regionalism,’ we will work to steer regional cooperation towards creating greater common goods for the global community.

Distinguished Guests and Ladies and Gentlemen,

Korea hopes to become a bridge—a ‘bridge of peace and prosperity’ that leads all of us into a new century of Northeast Asia.

I hope this Corporate Conference will offer us more great ideas for what to do to become such bridge.

Now, welcoming you all once again and wishing you health and—most of all—the success of this conference, I would like to propose toast.


Thank you.