Opening Address by
Honorable Kun Goh
Prime Minister
Republic of Korea

at the 37th Annual Meeting of the Board of Governors

15 May 2004
Jeju, Korea

On behalf of the Korean Government and people, let me first extend my heartfelt congratulations on the opening of the 37th ADB Annual Meeting. It is indeed an honor for Korea to be hosting this year's meeting. I warmly welcome you to Korea.

We are truly privileged and excited to host the ADB Annual Meeting for the second time after 34 long years, since the first time Korea hosted an annual meeting was in 1970 in Seoul.

As you know very well, since its establishment in 1966, the Asian Development Bank has strived to reduce poverty and promote economic development in Asia and the Pacific. It has also made tremendous endeavors in the areas of human resources development and environment protection.

As a result of such efforts, the ADB has made significant contributions in lowering the proportion of the poor, who live on less than a dollar a day, from 32 percent in 1990 to 22 percent in 2000. This is truly a remarkable achievement, equivalent to saving 180 million people from extreme poverty in Asia and the Pacific for a decade.

I believe that these achievements were possible because the ADB, without fail, continues to set achievable goals, taking into account the ground realities in Asia and the Pacific, and implement policies as planned in close cooperation with the member countries in the region.

Korea has been enjoying close partnership with the ADB since it embarked on economic development in the 1960s. In addition to the US$6.3 billion financial assistance, the Bank has provided much-needed assistance and support for Korea's economic development, including expertise and experiences in the area of development.

In this regard, I would like to take this valuable opportunity to express my profound respect and appreciation to President Chino, who played a pivotal role in establishing this important organization some 40 years ago, and former Presidents as well as former and current employees of the ADB for their commitment and devotion.

I would hope that the ADB will continue to help reduce poverty and accelerate economic growth in Asia and the Pacific without being complacent with the achievements made so far.

Furthermore, the ADB should strengthen its activities to eliminate corruption and enhance transparency of economies in the region. I would believe and also request the ADB to be a focal point in our collective efforts to narrow the digital divide among the member countries.

The Korean Government has been contemplating ways to return the valued favors we received through the ADB to fellow member countries in need of assistance. In this context, we will establish "e-Asia Fund," to be used to improve the level of information in the Asia-Pacific region, aimed at supporting the ADB's commendable effort to reduce the digital divide.

Distinguished guests, ladies and gentlemen,

The ADB, through its resilient effort I have just touched upon, has contributed to regional and global peace and stability. In line with this, Korea, too, has a noble vision, that is the pursuit of peace and prosperity jointly with all of the Asia-Pacific countries.

To put this vision into reality, we have set two major goals in an effort to ensure that the Asia-Pacific region acts as a new driving force behind world peace and prosperity of the humankind.

The first goal is to build permanent peace on the Korean peninsula by resolving the North Korean nuclear issue in a peaceful manner.

The second goal is to improve Korea's economic systems and business environment so as to promote Korea as a business hub of Asia.

Let me further elaborate on the second goal I have just mentioned.

Korea is endowed with favorable geo-economic conditions, for the country can serve as a bridge between an economic block of the Eurasian continent and the economies in the Pacific Rim. Also, the country is proud of its world-class information technology (IT) infrastructure, high level of education and competent human resources.

Based on these merits, we are striving to develop Korea into a hub for logistics, financial services, business activities and R&D in Asia, connecting the Pacific and the Eurasian economies.

The Incheon International Airport, Busan Port and Gwangyang Port are equipped with excellent logistics infrastructure. In addition, Korea became the fifth country in the world to launch the operation of the high-speed train, called the Korea Train Express (KTX). This new railway transportation will mark the beginning of the 21st century iron silk road. In other words, this railway will soon be reconnected to the inter-Korean railway, and also linked to the TCR of China and the TSR of Russia. Therefore, the KTX will be one of the core infrastructures to help enhance Korea's status as a logistics hub in Asia.

Distinguished guests, ladies and gentlemen,

You may be aware you are at the first International Free City in Korea, Jeju. The city remains a symbol of the Korean government's commitment to promoting open markets and investment opportunities for foreigners.

The Korean Government is pursuing programs in earnest to attract foreign investors that will play an instrumental role in further developing Korea into a business hub.

As part of this, the cities of Incheon, Busan and Gwangyang each have been designated as a "Free Economic Zone" in which foreign investors are encouraged to freely engage in various economic activities. Gale Corp. of the U.S. and Amec of the UK have already announced decisions to invest in the airport, seaport and other logistics complexes in the Free Economic Zones.

The Korean Government is also in the process of revising the Special Tax Treatment Control Act and the Foreign Direct Investment Promotion Act, with a view to improving incentive systems for foreigners, such as tax benefits and support for business establishment in terms of usable land.

In addition, the Korean Government is working to improve the living conditions for the management and employees of foreign-invested companies. Plans to build a multilingual international school in Yongsan, Seoul, and to entrench a tax initiative to apply a flat income tax rate of 17% for foreign employees are in the pipeline. We also plan to introduce a cash grant system for high-tech foreign-invested firms.

Added to it, we have vowed to create a favorable business environment that is par excellence as compared to our competitors. To this end, we are boldly lifting and revising administrative regulations that may in any way pose as barriers in conducting business.

Recently, within the Office of the Prime Minister, the "One-Stop Business Support Center," of which I myself am the head, was established to actively push forward with measures to improve business conditions.

Korea is successfully upgrading its systems for market competition and foreign exchange to meet global standards. We are also making efforts to develop into a financial hub of Asia.

I believe that the conditions in Korea are sufficiently ripe to pursue plans to become a specialized financial hub for asset management, given the high levels of foreign exchange reserves and public pension funds of the nation.

Propelled by this advantage, we have prepared initiatives to foster local asset management firms and to attract foreign asset managers. The Korea Investment Corporation (KIC) will also be established.

Distinguished guests, ladies and gentlemen,

Now allow me to come back to the first goal I previously introduced to you.

Peace on the Korean peninsula is a must, not only for the sake of our own nation but also for world peace and prosperity of all humankind.

The Korea-U.S. alliance, which has served as the cornerstone of peace and stability on the Korean Peninsula and the greater Northeast Asia, is now entering a new phase of more matured relationship.

The Korean Government is dedicated to dialogue with North Korea for a peaceful resolution of the North Korean nuclear issue, with support from the Korea-U.S. alliance as well as neighboring countries. I am pleased to say that we have made progress in recent months towards a peaceful resolution.

With regards to procedural matters as well, the second round of six-party talks has produced successful outcomes, such as the working group, which is a step forward towards the regularization or the institutionalization of the six-party talks.

To further list the related governmental programs currently underway, I would like to cite the Gaeseong Industrial Complex and Inter-Korea Railway Project as part of the larger North-South Economic Cooperation. Dialogue between the two Koreas, such as the ministerial talks is proceeding smoothly with no hiccup, and there has been a recent bilateral agreement on holding a top military officials' meeting.

In short, the efforts to establish peace on the Korean Peninsula are witnessing remarkable progress.

Distinguished guests, ladies and gentlemen,

In spite of the unprecedented presidential impeachment vote a couple of months ago, little confusion in the government, nor economic uncertainties were experienced. Moreover, the general election held just last month, April 15, to be specific, is considered to be the cleanest and fairest ever.

The election made the ruling party become the majority party for the first time in sixteen years.

As of yesterday, upon the final verdict announced by the Constitutional Court, all power has been restored to the President. With this reinstatement, the Korean Government shall instill added momentum in the pursuit of a wide range of national initiatives to contribute to world peace and prosperity in the Asia-Pacific region.

On the economic front, we will ensure consistency and predictability in the pre-formulated economic policies based on market principles and the commitment to open markets.

In terms of labor-management relations, we will see to it that the Korean Tripartite Commission's social pact founded in the spirit of coexistence and cooperation is put to practice, and that the virtuous cycle of growth and equitable distribution persists well on into the future.

With regards to foreign policy, we will continue to embrace the pragmatic approach with emphasis on maintaining a strong alliance with the U.S.

Delegates from the ADB member countries, ladies and gentlemen,

Korea offers to be the bridge of peace and prosperity in opening the era of the Asia-Pacific in the 21st century.

I am confident that this year's annual meeting will be a valuable opportunity to solidifying cooperation among the member countries and opening up the Asia-Pacific era in the 21st century along with the ADB.

Korea will continue to make important contributions to the prosperity of the region by fully utilizing its economic status and strengths and deepening partnership with the ADB to the next level.

In conclusion, I would like to place on record my sincere appreciation to the organizers for their hard work and excellent preparation. I also hope you have a pleasant stay in Korea and a chance to appreciate the beautiful scenery of Jeju Island.

Thank you.