Under the surface in Seoul

Korea was once known as the ‘hermit kingdom’, a name stretching back centuries. Things have definitely moved on since then. Samsung, LG and Hyundai are global brands. Korean pop culture is huge across Asia (and even the world with Gangnam Style).

Many of us though continue to see Korea through the frame of the DMZ and the still live war with the Democratic People’s Republic to the North.

" Korea, in the imagination of many from the west, seems to play on people's fears rather than their hopes and aspirations."
Tareq Muhmood, CEO Korea & Managing Director Global Subsidiaries, ANZ

Before moving to Seoul six months ago, these are the sorts of shorthand views I too had, even with my business experience in the region.

Now I am here, not only am I exposed every day to the amazing technology and frenetic culture of hyper-modern Seoul, I have been surprised by the reality of Korea’s approach to immigration, the stability of the country's finances and – for the banking industry - the engagement between the regulator and the financial sector.

So here are some thoughts around three aspects of the Korea story about which I carried some trepidation.


The number of foreign residents in South Korea has tripled over the past 10 years and now accounts for 3.4 per cent of the country. It may be low now but it is expected to continue to increase.

Many of the foreigners may be of Korean origin (e.g. Chinese or US nationals) but there is also a wonderful variety of others. In my time in the city I have had the pleasure of meeting Italian University Professors, Danish entrepreneurs and an Australian trying to develop his own brewery.  

There’s no doubt some foreigners might find the cultural leap into Korea a bit daunting but underneath the surface there is clearly warmth, humour and a real desire to embrace diversity.

For those from Australia or New Zealand, for instance, Koreans have a welcome openness and indeed frankness.

Meanwhile, the small but growing population of foreigners and returning Koreans is making it easier to operate in what is still a very foreign country.

Increasingly, this means foreign companies are looking to initiate more trade and investment with South Korea and we have seen ‘InvestKorea’ becoming more active in the region.


In August, the ratings agency Standard & Poor’s upgraded South Korea to its third-highest available ranking, AA.  At a time of global uncertainty where many sovereigns face downgrades this is a significant outcome.

I know some bankers and fund managers complain about the lack of currency convertibility (the Korean Won, the KRW, cannot be traded offshore) but while I understand more open capital markets would represent the 'internationalisation' of the currency, the careful progress of policy is understandable.

As we have seen in Asia (and elsewhere) over the years, handing over control to the international currency markets is not something to be taken lightly – and Koreans have hard memories of the 1997 Asian financial crisis and their period of subjugation to the IMF.

I can understand why policy makers believe a more restricted currency makes sense.

For business, this does mean taking more care when planning for direct investment and trade with the KRW and the ability to hedge and its cost can be higher than more liquid currencies. This cost is offset with the greater sense of fiscal stability.


ANZ has been in Korea for almost 40 years, making us one of the most long standing foreign banks. As chief executive, I meet with regulators quite often.

Although the regulatory and compliance regime is more stringent than many, the openness and debate around what the 'right' thing to do is has been a breath of fresh air.

This compares with the mistrust and disengagement I have seen in many markets. Having a more open, trusting and constructive engagement can only result in better outcomes.

I know there are plenty of challenges and issues with South Korea (as there are with many countries).  

However, there are also plenty of other wonderful aspects to life here - and personally here are three which standout:

• The food, (like Mishmash- a recent new entrant to the Korea fusion scene)

• The tailoring

• The music scene (a fun group is ‘Big Bang’)

Tareq Muhmood is CEO Korea & Managing Director Global Subsidiaries, ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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