Korea urged to focus on ICT infra projects

South Korea’s participation in the Asian Infrastructure Investment Bank will be beneficial if the country focuses on infrastructure-building projects in information and communications technology and other key areas, experts said.

A recent report, titled “The Meaning of AIIB and Opportunity for ICT,” published by the KT Center of Business and Economic Studies, said that in order to Korea to benefit from the AIIB, it should focus on investing in ICT.

“Investing in ICT in Asia could also pave the way for Korean corporations to enter overseas markets,” Cho In-ho, a DIGIECO researcher and coauthor of the report, said.

The report added that global demand for ICT infrastructure during the current decade was estimated at $8.22 trillion.

“Because there is a huge demand for infrastructure in Asia, we have to see how much share we can take and how many derivative markets we can create from the ICT industry,” Cho said.

“With the U.S. and Japan ― both countries with strong ICT industries ― currently not part of the AIIB, it was a good chance for the IT-powered South Korea to establish a foothold in business deals first.”

More specifically, he said Korea had an advantage in broadband and LTE data, as well as having a thriving applications and mobile solution market.

With the rise of ICT in developing countries, there may be demands for other industries that improve residents’ quality of life.

“In that case, the medical businesses could become important as well as smart traffic and electronic traffic industries.”

Other industries have also been forecast to benefit from the AIIB. Ankit Panda, a foreign affairs analyst and editor at the Diplomat, said that Korean contractors in energy, transportation, construction, and related industries could stand to win valuable contracts with the backing of the AIIB, noting that shares of Korean iron and steel campanies rose after Seoul announced its participation in March.

Charles K. Armstrong, professor of Korean Studies at Columbia University, also stated that he saw the AIIB as an important regional element to the world financial system.

“There is a shortage of investment capital in Asia, and the work of the AIIB should complement ― rather than simply compete with ― the activities of the Asian Development Bank, the World Bank, and other international investing institutions,” he told The Korea Herald in an email interview.

By Sang Youn-joo (sangyj@heraldcorp.com)