[Sponsored Report] Korean World Bank office to settle in Songdo

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[Sponsored Report] Korean World Bank office to settle in Songdo


Songdo’s G-Tower, where the World Bank Group office will open.

The World Bank Group (WBG) plans to set up offices in Korea by the end of the year, the Ministry of Strategy and Finance and the WBG recently announced. WBG President Jim Yong Kim and Finance Minister Hyun Oh-seok signed an agreement on Oct. 10 to open Korea’s main WBG office in Songdo District, Incheon Free Economic Zone, and a liaison office in Seoul.

WBG is a nonprofit international organization that provides financial and technical assistance to developing countries. It comprises five institutions: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID).

Four of these institutions, with the exception of the ICSID, will move into Songdo.

Songdo’s victory over Seoul as a location for the main institution came after fierce competition between the two cities, which began during Kim’s visit to Korea for the World Knowledge Forum last October. Song Young-gil, mayor of Incheon Metropolitan City, took the opportunity to suggest the Songdo international business district as a possible site for the main office.

Though WBG first showed a preference for the capital city, Songdo made headway due to its proximity to Incheon International Airport and rising reputation as a host to UN bodies and international organizations such as the Green Climate Fund (GCF). Songdo was eventually granted the honor after World Bank experts visited the city four times to check its environment and infrastructure.

The WBG currently has offices in more than 100 member countries, and it is globally unprecedented for a country to host its main office in a non-capital city. In China and Japan, for example, the offices of the WBG are located in Beijing and Tokyo respectively.

Korea: A role model for developing countries

This is not the first time the World Bank will open an office in Korea. In 1998, after the Asian financial crisis, IBRD set up an office to help the country manage its loans for restructuring. Offices of the Asian Development Bank (ADB), the International Monetary Fund (IMF) and the International Finance Corporation (IFC) all opened around this time. Naturally, the World Bank was perceived as symbolizing the financial crisis that hit Korea hard. The offices closed down when the crisis subsided in 2000.

This time, circumstances have changed and there are different purposes. The WBG office will serve as a center for international cooperation, to aid developing countries in the fields of economic development, ICT, infrastructure and finance, where Korea has abundant expertise and experience.

Korea is a rare case - a country that has turned into an aid giver after previously being on the receiving end of donations, with its gross national income per head taking a staggering leap from $67 in the 1950s to the current $20,000. Now the 14th largest economy, Korea is a proud donor at the IDA of the WBG. Such a rapid pace of economic growth qualified Korea as a bridge between developed and developing countries, and an excellent role model for the latter.

“We think that Korea’s past experiences such as sustainable development, improvement of infrastructure and services for living, and dynamic transition to knowledge economy will be a motivation for other developing countries,” said Jim Yong Kim, explaining the background for opening the new office.

In a similar context, Hyun Oh-seok stressed the role of the Korean office.

“Korea acknowledges political tasks that developing countries are faced with and is ready to share its accumulated know-how with them,” he said. “The Korean office will play an extensive role for those countries.”

A bright forecast for Incheon

Housing the biggest international financial organization will create considerable benefits for the country, such as a boost in Korea’s image and a larger diplomatic clout. But positive effects are not restricted to national level - Incheon will enjoy tangible benefits as well.

Direct benefits will derive from the spending at the complex of resident employees, their families and participants at international conferences, workshops and conventions. New jobs will be created, and tourists will flow in.

Incheon will become a hot spot for international finance, with talented people in the industry flocking there.

The status of Songdo as a global administration hub will be strengthened, as the WBG office will generate synergy with the secretariat of the UN-operated Green Climate Fund, widely called the World Bank of global environmental protection.

For the first three years, the WBG will manage the accumulated funds of the GCF, which is also scheduled to move in by the end of this year. Mayor Song claimed that this would enable the two international organizations to “cooperate and share information on green financing and financing for developing countries.” He pointed to such “partnership and synergic effects with the GCF” as the key competitive factor that tipped the scales in favor of Songdo in the host city selection.

In addition to the GCF and WBG, Songdo has also succeeded in attracting the Global Green Growth Institute (GGGI), which is to open in 2014. Mayor Song said the three institutions will together build Songdo into a global financial complex and a mecca for green growth.

“I am certain that this opportunity will pave the way for Songdo to become a global financial hub,” said Song, promising to provide all administrative support to ensure the seamless operation of the World Bank Group’s Songdo office.
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