South Korea’s hosting of the annual Inter-American Development Bank meeting is expected to help the country strengthen economic ties with Latin America, the government said Sunday.
The finance ministry said, after the two-day-long board of governors meeting came to a close in the port city of Busan, that the sheer size of the event and the interest shown by participants raised expectations for more closer two-way relations and cooperation.
The board meeting and the preceding business forum that kicked off Thursday attracted some 3,000 people from Latin America with over 1,000 one-on-one talks between companies taking place.
Think tanks from the two sides inked the Busan Declaration that called for more free trade agreements to be signed between the two countries, more cooperation in clean energy and dismantling of non-tariff barriers that could further vitalize trade.
Bilateral trade reached $54.2 billion in 2014, from just $22 billion in 2005, when Seoul joined the IDB as a non-regional member, the second Asian country to do so after Japan.
Connecting Seoul’s prowess in information technology and manufacturing with Latin America’s abundant mineral and energy resources will benefit all sides, said South Korea’s finance minister Choi Kyung-hwan, who was tapped as the rotating chairman of the IDB for the next year on Saturday, in a press conference wrapping up the meeting.
He said Seoul seeks to better share its past development experiences with Latin American countries and strive for joint prosperity.
Related to all sides striving for prosperity through cooperation, the finance ministry said many individual Latin American countries and the IDB asked for greater participation of South Korean companies in regional development projects.
IDB president Luis Alberto Moreno said that while Latin America was coping with sluggish growth at present, the region possessed great growth potential and there is considerable demand for economic cooperation.
The ministry said that Seoul’s decision to provide $1.1 billion in policy financing, which includes $100 million in soft loans, can not only support Latin America’s push for growth but also facilitate a greater role in development projects in the region for South Korean companies.
Of the total, $1 billion will come from the country’s Economic Development Cooperation Fund, with $100 million to be given in the next two years to spur the region’s infrastructure development. The total to be used for infrastructure will reach $200 million with the IDB pledging to provide matching funds.
In addition to the EDCF with the IDB, Seoul reached an understanding to provide extra support funds to Bolivia and Nicaragua in talks held on the sidelines of the board meeting.
Besides enhancing two-way ties, the IDB members agreed on the forging of a cohesive “mid-term strategy” in Busan, which will help the development bank better meet its main goal of poverty reduction, social inequality and gap in productivity that has hindered regional integration.
Members then touched on measures to create a “New Corporation” that aims to merge existing private institutions under the IDB into a more centralized entity.
This move, that requires inflow of fresh capital by members, is designed to strengthen the corporation’s capabilities and improve efficiency.
South Korea’s finance minister said that while the country wants a greater stake in the New Corporation, such a move requires the approval of other IDB members.
Presently, Asia’s fourth largest economy only has a negligible 0.002 percent stake in the bank itself and because fresh injections of funds are usually based on existing share holdings, it cannot hold a sizable stake in the new entity, unless changes in capital injections are made. (Yonhap)
