Republic of Korea formalizes incorporation to CABEI
28.12.2018 00:00 By: CABEI News Age: 206 days
CABEI and the Republic of Korea will continue working to make the region sustainable. The entry of Korea into the multilateral organization will attract and channel external resources to the region.
Seoul, South Korea, December 28, 2018.- Today, the Central American Bank for Economic Integration (CABEI) announced the formalization of the entry of the Republic of South Korea as a new non-regional member. The incorporation will be formalized through the signing of the instrument of adhesion and the shareholding agreement.
This incorporation takes place after the modifications made to the Bank's Constitutive Agreement in June 2016, which have led to the incorporation of new members with high credit ratings.
The new member's entry will allow CABEI to consolidate itself as the strategic ally of the Central American region, further strengthening its financial profile. Through this incorporation, capitalization funds will be captured in order to maintain the Bank as the main provider of financial resources to the region.
The capital increase is an indisputable signal of the support that this new member country will provide to the bank, since capital increases represent one of the most evaluated and monitored factors by financial markets and rating agencies.
With this capitalization, it will be possible to materialize new short-term improvements in the Bank's credit ratings for the benefit of its member countries, consolidating the Bank as the most important source of funds for the Central American region.
In that sense, CABEI Executive President, Dr. Dante Mossi, explained that the capital subscription request of the Republic of Korea amounts to US$450 million, which will generate an increase in the available amount of credits by US$2.25 billion; this represents an increase in CABEI's portfolio of US$7.00 billion to more than US$9.00 billion; the resources will be used to promote programs and projects in the region.
Therefore, Korea is one of the non-regional members with the largest shareholding in the institution and the second Asian country to become a CABEI member.
CABEI contributes to the financing of development priorities
Korea's incorporation into CABEI took place today at the headquarters of the Korean Ministry of Economy and Finance, where President Mossi highlighted the importance for CABEI of attracting a high credit quality member such as Korea, which has already generated a positive and immediate impact on the Bank by strengthening its institutional governance and improving the benefits of the cooperation schemes agreed upon between CABEI and Korean institutions in favor of its member countries.
President Mossi stated that, "We cordially welcome the new member and are committed to making an exemplary integration that results in a stronger development Bank, ensuring the region's sustainable growth.
Korea is one of the largest economies in Asia and the world; a leader in technology and innovation; and one of the most successful stories of global economic development. The Central American region will benefit directly from its link to CABEI.
Furthermore, President Mossi added that, "As a donor country, Korea is expected to channel technical assistance and cooperation resources to support the Bank's mission of promoting the economic integration and balanced economic and social development of the Central American region.
The Republic of Korea has been an observer member of the Central American Integration System since 2012 and maintains important commercial links with the region, which will be further enhanced through its incorporation into CABEI and through the Free Trade Agreement with Central America; the latter's negotiation process was supported by the Bank.