Vladimir milovidov, the chairman of Federal Financial Markets Service of Russia had visited Seoul with the president of Russia, Dmitry Medvedev to participate in G20 Summit. The president of Federal Financial Market Service of Russia had met Dong-Soo Chin, the chairman of Financial Service Commission of Korea and concluded MOU (Memorandum of Understanding) in 10th of November, 2010. Under the MOU, both authorities would collaborate for inspecting and preventing illegal financial activities in stock market through cooperation and information sharing.
Summary of the partner, Russia
Russia is one of the emerging markets, so called BRICs (Brazil, Russia, India and China). This country has been rapidly developed after collapse of Soviet Union in 1991 by introducing market oriented economy system into the country. Though Russia had hard time during economy crisis in the end of 90’ and 2008, the economy of the country has been improved dramatically based on growing export of products from agricultural and energy industry. Through growth of natural resources industries, the country is now highlighted in the world market as brightly emerging country.
Korea’s economic relationship with Russia
Economy transaction between private companies had enlarged rapidly by year (except 2009, the year after global economy crisis). Russia have become 8th large economy transaction partner of Korea in 2007 and 2008. Comparing to 2004, it is great change and progress. Mostly, transaction had been done between electronic and auto mobile products of Korea and natural resources from Russia. In other words, both countries are quite dependent on each other in economy aspect.
Table 2. Proportion of Korean exports and exports ranking to Russia
Though private economy transaction has been grown up fast, it has been known that the both don’t have strong connection in government sectors especially financial service area. As world capital market is recognized one combined market, there have been concerns about the way to keep capital transaction within the countries transparent through each authorities’ collaboration.
Details of MOU
The MOU is considered that it has made the new prospects on economy relationship between Korea and Russia. The MOU is quite meaningful since it makes fundamental factors that can lead both economy markets more transparent and sound than ever.
The MOU’s main objective is to share information on both economies, especially on the stock exchange and financial market. In other words, both authorities would exchange their knowledge and experience by sharing information. Based on the MOU, Korea and Russia would be able to prevent markets from illegal market activities such as trials to rig the market and inside trading.
Even though the MOU between Russia and Korea is not legally settled, it is significant since it has improved cooperation within government sectors in earnest unlike the past when collaboration mostly had been achieved within private sectors of the both. Furthermore, the MOU can be considered a new foothold for Korean government to broaden and widen cooperative relation with other countries particularly developing countries such as BRICs in financial area.
Kyoungmin Kim (firstname.lastname@example.org)