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South Korea is relevant to Gulf

N. Janardhan
Filed on November 11, 2010

When 2009 ended with a South Korean-led consortium winning a landmark $20 billion contract to build four nuclear reactors in the United Arab Emirates, it eclipsed other Western bidders. While the choice of an Asian company, especially South Korean, surprised many, Middle East watchers would vouch that it is a move that epitomises the regionís growing ties with Asia during the last decade.

Amid the din of the rise of Asian giants like China and India and how the balance of economic power has moved from West to East, South Korea’s success and relevance to the Gulf has received relatively less attention.

As Seoul hosts the G20 summit on 11-12 November, it is worth noting its economic exploits and intensifying engagement with the region. Both developments then set the stage to envision what the region can draw from the Korean experience beyond the economic realm.

For starters, the pace of South Korea’s economic recovery is unrivalled in recent history. In late 1997, Seoul approached the International Monetary Fund (IMF) for assistance to avoid an external payments crisis. Just a decade later, it was ranked 13th in the world with a GDP of $1.3 trillion in 2009. In the first half of this year, South Korea was the seventh largest exporter in the world, rising two places from 2009. The IMF has revised the country’s growth in 2010 to 6.1 per cent, which will keep it in the spotlight.

From being a manpower exporter, most of them unskilled, South Korea has transformed into a technology exporter. It is estimated that about 1.1 million Koreans worked in the Arab world between 1975 and 1985, a large chunk of them in the Gulf Cooperation Council (GCC) countries. Only a fraction of them are part of the region’s current expatriate dynamic. Instead, Korean companies are playing a dominant role in the region not just in the construction and transport sectors, but also renewable energy, oil- and gas- related industries, medium-sized businesses, healthcare and information communication technology.

As a result, South Korea’s imports from the region jumped more than 50 per cent during the first half of this year, compared to the same period in 2009. About $34 billion of this bill constituted oil and gas products to fuel its economy. With bilateral trade having peaked at about $100 billion in 2008, the GCC countries and the world’s biggest importer of liquefied natural gas are now in advanced negotiations for a free trade agreement. This bid to intensify ties augurs well for the region’s ‘new’ economic boom, which is based on economic diversification and knowledge economy.

Being such a heavyweight economy, South Korea is now expected to serve as an emerging bridge between developed and emerging countries. As the chair of G20, it is expected to reflect the concerns of the non-G20 member countries’ quest for sustainable growth. Herein lies the utility value of South Korea’s political experiences.

First, while the Sunshine Policy may not be an ideal example of rapprochement between the GCC countries and Iran, it certainly serves as a practical lesson on how not to escalate the current level of tension. Since envisioned in 1998, the Sunshine Policy encouraged greater political contact between North and South Korea, resulted in economic progress and paved the way for meetings between separated family members. Most importantly, it kept war at bay.

Many South Korean intellectuals still feel that ‘Sunshine’ is a long-term watchword. Despite the umpteen starts-stops, six-party engagement efforts and many serious crises of recent years, including the sinking of a South Korean naval ship by North Korea earlier this year, experts believe that the Policy has not ended; rather they are keen that it be viewed within a new framework. The prescription is to move from “engagement” to “embracement”. The logic behind the optimism is that while leadership is a passing phase, the nation is permanent, which is a profound message for the Gulf region.

Second, South Korea offers a lesson in how to delicately balance interests with Iran, its largest export market in the Middle East. According to a September report, Seoul targetted 126 Iranian companies and individuals for economic sanctions in spite of Teheran’s warnings that it would hurt bilateral trading ties. Under consistent pressure from Washington to join the UN sanctions, South Korea has, in fact, maneuvered to increase bilateral trade with Iran. Without curtailing oil imports from Iran, it has prohibited new investment in Iran’s petroleum and gas industries. As a result, the 2010 two-way trade bill is set to exceed the 2009 figure of $10 billion.

A recent government statement said that while Seoul expects Iran to join the international efforts for nuclear non-proliferation and implement its obligations under the UN resolutions, its Iran policy reflected its own campaign to pressure North Korea into giving up its nuclear weapons.

Third, some Western analysts have pointed that in South Korea, the Gulf also has a model for Iraq. While the phased withdrawal of the US forces in Iraq has been largely welcomed in the region, it is still unclear if Iraq is strong enough yet to insulate itself from authoritarianism, sectarianism, terrorism and secessionism – all threats that failed to subside even after the 2003 US-led invasion. In 1953, when the Korean War ended, the United States maintained a substantial military force in South Korea and has been credited in part in the transition from a weak to a strong economy and from dictatorial rule to democracy.

Nearly six decades after the war, though South Korea has a credible indigenous defence capability, about 30,000 American troops remain on the peninsula. While the presence of American troops in the region remains controversial and the debate surrounding it rages inconclusively, the South Korean case remains a reference point.

Finally, it is pertinent to point out here that while many believe that it is the China model of ‘economic before political reform’ that the GCC countries are prone to following, this rationale also resonates with the South Korean formula. It was not until 1987 that South Korea began to modernise its political system and became a democracy. In the Gulf region, unprecedented economic growth has put political reform on the backburner. Instead, moves are afoot to tap into the economic gains to tackle social deficits, especially human capital development.

It is here that South Korea’s experience of expanding an economy by successfully developing its human resources could be valuable for the region’s nascent efforts at building a knowledge-based economy, which hold the key to a stable and prosperous future.

Dr. N. Janardhan is a UAE-based political analyst on Gulf-Asia affairs





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