Time to step upSouth Korean companies will be invited to join numerous resource and infrastructure development projects in Asia now that Seoul has decided to become a founding member of the China-led Asia Infrastructure Investment Bank (AIIB).
Seoul chose to join the AIIB despite pressure from Washington amid concerns that Beijing is using the AIIB-financed infrastructure to gain greater leverage in Asia because of the obvious economic merits and gains the bank will provide.
But the boons will not drop into our lap just with the membership. We must draw up a detailed strategy and make preparations to use the opportunity in our favor before the AIIB is fully launched and activated.
With the new regional development bank led by China shaping up, infrastructure and pork-barrel projects in Asia will gain impetus. The competition between a new organization and the existing Asian Development Bank (ADB) led by the United States and Japan will likely accelerate construction and development projects in the region amid ample funding.
The ADB estimates that infrastructure investment capital in Asia will reach $730 billion annually until 2020. The first and biggest function of the AIIB will be to raise funds for China’s ambitious plan to create a 21st-century version of the Silk Road, a land and maritime route to connect Asia and Europe. The construction of countless roads, ports, dams, power stations and power supply systems will be necessary for countries across the continent.
The mass-scale pork-barrel projects will demand construction, engineering, steel, materials, chemicals, distribution and logistics - the areas South Korean companies already excel in.
The government should do its best to make as many opportunities as possible for Korean companies.
To have a greater say in the bank’s decision-making procedures, Seoul needs to hold a large stake in it. It must make the utmost diplomatic endeavors to ensure that Korea can have influence in the new organization and raise the country’s reputation through participation in its governance.
Additionally, Korean companies should hone their management, practices, bid capacities and engineering standards to be competitive in AIIB-funded bids.
The government and the corporate sector must join hands to make the AIIB membership a windfall for our economy. JoongAng Ilbo, March 30, Page 30