South Korea makes its presence felt in the Middle East

By Mona Sukkarieh. Published on March 21, 2012 in The Korea Herald.

When talking about a “going-abroad” policy, China immediately and justifiably comes to mind. From a Middle Eastern perspective however, a smaller country has been taking an increasingly confident posture and deserves being highlighted. In 2009, it took nearly everyone by surprise when a consortium of its leading companies won a 20.4 billion-dollar contract to construct four nuclear power plants in the United Arab Emirates, beating traditional nuclear energy suppliers from France and the United States. This development aggressively brought it forward but it was in fact part of a long series of multibillion-dollar projects in the Gulf and the rest of the Middle East that are giving South Korea a whole new dimension in the region.

With an income level comparable to some of the poorest countries 50 year ago, it now boasts one of the world’s leading economies. A leader in communications and IT, research & development, car industry, to name but a few, it ranked 7th for merchandise export in 2010, overtaking the United Kingdom. Last year, despite a global economic crisis, its economy grew by 6.2%.

In order to sustain such a large economy, the “Land of Miracles” as it came to be known, needs to ensure energy supplies. Being resource-poor however, South-Korea is a major importer of energy and it was only natural for it to turn to the resource-rich Middle East and to cultivate ties with the countries in the region.

Although energy imperatives were the main drive behind South Korean interest in the region, once ties were established, all sides saw additional advantage in strengthening diplomatic, economic and cultural relations. From a South Korean perspective, the Middle East not only accounts for 70% of its oil imports and 48% of its natural gas imports, it is also a vast market that has still not been sufficiently explored. As it looks to expand its diplomatic role, matching its position as the 12th largest economy in the world, it is taking new responsibilities, promoting security links and actively securing stability by deploying troops in the region. In the past 10 years, South Korea has sent peacekeeping missions to Iraq and South Lebanon, where it is still present. It has been maintaining a 350-member unit off the coasts of Somalia since 2008, tasked with anti-piracy operations. In 2011, it began a 2-year mission to train and conduct joint exercises with UAE forces. For this purpose, 130 military members were deployed in the country as part of the “Akh” unit, named after the Arabic word for “brother”. As the commander of the unit Colonel Choi Han-oh has put it, this new model of military cooperation will contribute to upgrading the national profile of the country, which incidentally, aims to achieve four billion dollars in arms exports by 2020, placing it among the top-10 arms exporters in the world. Naturally, South Korea hopes that a fraction of this amount would come from a few middle-eastern states. It is currently in discussion with Iraq to sell its advanced T50 supersonic trainer, in a sort of oil-for-aircraft deal, and with the UAE to sell unmanned aerial vehicles (UAVs), promising to transfer related technologies as well as ballistic missiles and electromagnetic pulse bombs technology.

From an Arab point of view, the emerging countries of East Asia represent a formidable market to diversify their energy export. Moreover, the multibillion-dollar energy bill that East Asia injects annually in the region is compensated by the equally costly projects it undertakes in that same region in what seems like an open-ended cycle of money transfer benefiting all sides. In addition, and compared to their western counterparts, East Asian countries as a whole and South Korea in particular seem to more easily engage in transfer of technologies, even in sensitive fields such as nuclear power technology, as the UAE and possibly Saudi Arabia are about to see, or defense industry as part of a growing military cooperation. More importantly, given the radical polarization between western-backed Gulf monarchies and Iran over the latter’s nuclear program and its growing regional ambitions, South Korea represents a less controversial option for all sides. By promoting itself as a third way despite being anchored in the western camp it succeeded in distancing itself from divisive political quarrels while benefiting from the opportunities provided by being western-oriented. Although not declared, this must certainly have played a role in granting the contract to build four nuclear power plants in the UAE to a South-Korean led consortium. A masterstroke by UAE rulers who at the same time avoided angering their powerful Persian neighbor by not granting the nuclear contract to neither the French nor the Americans, while at the same time allowing South Korea to set a foot in the Emirates and possibly increasing its energy imports from the UAE at the expense of Iranian oil and gas!

However, South Korea faces a number of challenges promoting itself to the Middle East: (1) its main asset is its competitiveness, supported by relatively good products at relatively good prices. South-Korean competitiveness would be questioned if one of those two variables deviates. Clients and consumers are not always looking for luxurious products at exorbitant prices. The nuclear deal sealed with the UAE attest to that. The French consortium led by Areva and initially considered favorite is known for its significantly safer and more secure reactors compared to the rest of advanced third-generation reactor models currently available. The Korean Electric Power Company and its partners however won the bid based on price and a solid record of prompt project completion; (2) the perceived linkage between the government and missionary activity – South Korea being the 2nd largest contributor of Christian missionaries behind the USA – has inevitably raised suspicion in a predominately religious and conservative region. Other grounds for cultural exchange must be found; (3) South Korea’s focus on Kurdistan, whether through oil deals, military and humanitarian presence or construction projects came under criticism from Baghdad which fears it might encourage separatism. A deeper understanding of the region, its peoples and dynamics will prove useful.

Despite that, South Korean exchange with Middle Eastern countries promises to grow significantly in the coming years, as is evident from the numerous projects planned in the region. South Korea’s own experience, whether in socio-economic development or in transition to democracy, makes it particularly qualified to play an important role in a region longing for both.

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