South Korea’s Ministry of Strategy and Finance and the Inter-American Development Bank kicked off the annual meetings of the Board of Governors of the IDB and the Inter-American Investment Corp. in Busan on Thursday.
Some 3,000 government officials and economists from Korea and Latin America will be gathering at the four-day forum to exchange development knowledge, and discuss ways to boost bilateral trade and technology especially through small and medium enterprises and start-ups in the two regions.
The Finance Ministry said that the 2015 IDB-IIC meeting in Busan would mark the largest event to be held in Asia, with the aim of finding solutions and developing policies to reduce social inequality, narrow the productivity gap and further integrate between Latin American and Caribbean economies.
The last annual IDB-IIC conference held in Asia was in Japan in 2005 when Korea joined the multilateral development financing group for Latin American economies. Korea began its relations with Latin America through diplomatic ties with Brazil in 1959, according to the Finance Ministry.
The Busan forum also marks the 10th anniversary of Korea’s IDB membership. Korea is the second Asian economy after Japan to join the IDB, which was established in 1959.
Under the theme of “sustainable growth, innovation and integration,” the two regions will seek business opportunities and map out a vision and an action plan through various programs for Latin American and Caribbean social and economic development.
In addition to having abundant natural resources, Central and South America offer growth potential with large portions of their populations under age 30.
The ministry noted that people under 30 make up almost half of the region’s population, which will boost productivity and growth in the near future.
The middle class accounts for 41 percent of the population, and the region’s GDP per capita, a gauge of the population’s purchasing power of goods and services, is almost double that of other emerging markets. Central and South America’s GDP per capita stood at $9,707 as of 2012.
“Central and South America has a large domestic market … with a population of around 600 million people and gross domestic product of $6 trillion,” the ministry said.
“The two sides will be able to complement each other with Korea having strength in manufacturing, and the region offers opportunities for Korea to strategically diversify its export markets.”
Bilateral trade between the two regions increased 196 percent to $54.2 billion over the past decade.
Korea’s trade with the region accounted for almost 5 percent as of last year, up from 3.8 percent in 2004.
Central American economies such as Ecuador, Guatemala and El Salvador have expressed hopes to establish free trade agreements with Asia’s fourth-largest economy. Korea has free trade pacts with Peru and Chile. An FTA with Colombia, which was signed last year, is expected to be ratified.
Besides seeking cooperation in mineral resources and infrastructure development, the annual conference will hold a sideline meeting for young entrepreneurs and innovators.
Start-up entrepreneurs from both regions will be joining the IDB-IIC conference to seek innovation in education, media, environment and health care, according to the IDB.
Korea began its efforts to join the IDB in the 1970s in a bid for its private and public enterprises to foray into Latin American markets. The IDB membership enabled Korean companies to enter the region’s energy procurement sector.
Korea is currently a member of five multilateral development financing institutions: the International Bank for Reconstruction and Development, the IDB, the Asia Development Bank, the African Development Bank and the European Bank for Reconstruction and Development.
