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President Moon Jae-in makes the congratulatory address at the second annual conference of the Asia Infrastructure Investment Bank (AIIB)

“The reality of the Korean Peninsula is that the severed Seoul-Sinuiju Line [from South to North Korea] has yet to be reconnected,” said President Moon Jae-in while attending the second annual conference of the Asia Infrastructure Investment Bank (AIIB), which kicked off at the International Convention Center Jeju on June 16. “The new overland and maritime Silk Road will be brought to completion when North and South Korea are linked by railroad.” This suggests that Moon will push to link the inter-Korean railroad with the Asian infrastructure projects that the bank supports.

In his congratulatory address on June 16, Moon linked the Seoul-Sinuiju Line to the ancient Silk Road, which he said “connected East and West, opened markets, and led to sharing of cultures,” with the Korean Peninsula “at the far eastern terminus of the Asian continent.”

“Most of all, I hope peace on the Korean Peninsula will contribute to stability and integration in Asia,” he said.

On South Korea’s role in Asia, Moon said it would “use its past experiences to serve as a partner in the economic and social development of Asia’s developing countries.”

“I promise that South Korea will fulfill that role and responsibility as a bridge linking developing countries to advanced economies,” he said.

Analysts saw Moon’s remarks as sending a conciliatory message toward China, which has been in conflict with South Korea over the Terminal High Altitude Area Defense (THAAD) deployment issue. An international financial organization spearheaded by China, AIIB was launched in Jan. 2016 with a funding target of US$100 billion, or around 113.6 trillion won. It currently has 77 member countries. South Korea’s share is 4.06%, the fifth largest of any member. AIIB is also closely tied to the Belt and Road Project (New Silk Road) vision of Chinese President Xi Jinping. Beijing has been stressing its role as a financial base to support transportation and energy infrastructure products for the Belt and Road effort, which aims to establish a trade network including Europe and Africa.

Noting that projected infrastructure investment demand among developing Asian countries over the next 20 years is expected to reach US$1.7 trillion per year, Moon stressed that “the significance and role of AIIB are highly important as an organization established to help expand infrastructure in Asia, given the high level of infrastructure investment demand and the more difficult financial conditions in countries since the 2008 financial crisis.”

“Humankind today is faced with various challenges - political, security-related, economic, and environmental,” Moon said. “I believe that through solidarity and cooperation between Asian countries, we can overcome the various challenges we face now.”

The annual general meeting on the topic of sustainable infrastructure is the first large-scale event held in South Korea by an international institution since the new administration took office. Delivering an address as a keynote speaker that day, Deputy Prime Minister and Minister of Strategy and Finance Kim Dong-yeon said, “Increasing the foundation for inclusive growth and sustainable growth through job creation, which is the new administration’s economic policy aim, is connected with this meeting’s core theme of ‘sustainable infrastructure.’”

Kim met with Chinese Finance Minister Xiao Jie the same day and agreed to continue mutual collaboration through the AIIB framework. It was the first meeting between China and South Korea’s finance ministers since July 2016.

AIIB has been drawing attention amid the US’s recent protectionist push, including its withdrawal from the Trans-Pacific Partnership (TPP). The bank’s membership has grown from 57 countries at the beginning to 77 now, with the number expected to reach 85 by the end of the year.

AIIB president Jin Liqun drew cheers the same day when he noted that the bank’s members were “all parties to the Paris Agreement [on climate change].”

Hyundai Research Institute senior research fellow Chun Yong-chan noted that Jin had “emphasized the Paris Agreement, which the US recently bowed out of, and seemed to be hinting at a check-and-balance role toward the US.”

By Bang Jun-ho, staff reporter in Jeju, and Jung Yu-gyung, staff reporter

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