By Jane Han
The upcoming summit between state leaders of South Korea and the Association of Southeast Asian Nations (ASEAN) is significant on its own, but even more so as the heads of states from regional countries will also meet with Korean business executives to discuss mutual investment opportunities.
The Korea Chamber of Commerce & Industry (KCCI), a major business lobby group organizing the so-called CEO Summit, says the two-day meeting held on the sidelines of the Korea-ASEAN Summit will provide a chance for leaders of countries and corporations to meet one on one.
"It will certainly be an unusual opportunity,'' KCCI Vice Chairman Kim Sang-yeol told reporters Wednesday, three days ahead of the two-day summit which is set to begin May 31 on the country's resort island of Jeju.
Some 700 businessmen from South Korea and ASEAN member states will discuss business exchanges and ways to eliminate or reduce regulations and barriers. Among the 10 member countries of the regional bloc, Thailand, Vietnam, Cambodia, Indonesia and Malaysia agreed to hold individual meetings with Korean businesses.
According to the KCCI, six companies including Kumho Asiana, Hana Bank and Korea Land Corporation, have already signed up for private meeting with Vietnamese Prime Minister Nguyen Tan Dung.
"Because the CEO summit is the first of its kind in Korea-ASEAN history, we're getting a lot of interest from participating companies,'' said Kim.
Under the theme "Change, Challenge and Collaboration for Asia's Prosperity,'' participants will not only talk business, but also discuss timely issues such as the global economic environment and challenges to achieve green growth.
Some of South Korea's top business figures to take part in the discussions are POSCO Chairman & CEO Chung Joon-yang; Daewoo Engineering & Construction President & CEO Seo Jong-uk; Korea National Oil Corporation Chairman Kang Young-won; and Kumho Asiana Group Chairman Park Sam-koo.
Participating business leaders from overseas include Vietnam Shipbuilding Industry Group Chairman Pham Thanh Binh, Berjaya Corporation Berhad Chairman Vincent Tan Chee Yioun from Malaysia and Indonesia Ferry Chairman Bambang Soerjanto from Indonesia.
"It is important for us to continue building relationships with ASEAN member states considering their rapidly growing importance in the regional economy,'' said the KCCI executive, adding that ASEAN is South Korea's third-largest trading partner.
According to the Korea International Trade Association, South Korea's trade with ASEAN totaled $90.2 billion in 2008 (exports $49.3, imports $40.9). The regional bloc is the country's second-largest construction market and investment destination overseas.
Building Economic Ties
South Korea's economic relationship with ASEAN hasn't always been strong, but it started to strengthen rapidly after the two established a dialogue relationship in 1989 and then held a summit annually since 1997.
After years of continued exchange, the ASEAN-Korea free trade agreement (FTA) on goods was established in August 2006, and the FTA on the service area was established in November 2007, opening up possibilities that the economic exchanges between the two sides will become more active.
As South Korea consistently pushed for more cooperation with ASEAN, the 10-member group became a legal entity in December 2008 by establishing the ASEAN Charter, which is aimed at developing the bloc of Southeast Asian countries into a structural group like the European Union.
Earlier this year, Korea successfully teamed up with ASEAN by officially kicking off the ASEAN-Korea Center, which is expected to promote trade and investment and cultural and tourism exchanges between the two sides.
"There are so many possibilities of mutual benefit between South Korea and ASEAN,'' said the vice chairman of KCCI, who stressed that regional partnership in the private sector is critical to ramping up the exchange.
Expanding capital inflows and transferring technologies are ways to prompt active cooperation, according to experts.
Early this month, Korea, China, Japan and 10 ASEAN nations agreed to establish a $120-billion Asia Joint Fund under the Chiang Mai Initiative (CMI), boosting financial cooperation in the region. The fund is a bilateral currency swap scheme created to help prevent a disaster similar to the one generated by the 1997-98 Asian financial crisis.
Korea will commit a total of $19.2 billion to the regional fund, or 16 percent, while Japan and China will each provide $38.4 billion, or 32 percent _ the remaining $24 billion will be contributed by the 10 ASEAN member countries.
Since ASEAN members are South Korea's biggest energy suppliers, developing a partnership in the fields of natural resources in exchange for transferring Korea's IT technology will also be ideal, they say.
Established in 1967, ASEAN was first comprised of Indonesia, Malaysia, the Philippines, Singapore and Thailand. But starting 1984, Brunei, Vietnam, Laos, Myanmar and Cambodia joined as members, creating today's 10-member bloc.
The member states together signed the Declaration of the Association of Southeast Asian Nations, also known as the Bangkok Declaration, which states that the aim of the group is to accelerate economic growth, as well as cultural and social development in the region. It also promoted peace and stability in Southeast Asia.
The ASEAN region covers a geographical area of approximately 4.5 million square kilometers and has a population of over 570 million people.
In 2007, its total Gross Domestic Product was over $1,280 billion and its total trade exceeded $1,700 billion, according to South Korea's government data.
ASEAN now encompasses all the countries of the Southeast Asian region, with all its diverse peoples, cultures, religions, political and economic systems.