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LEADERS MENA Meets South Korean envoy to Saudi Arabia

LEADERS MENA Meets South Korean envoy to Saudi Arabia

The Saudi-South Korean relationship has grown exponentially in recent years.South Korea’s bilateral cooperation with Middle Eastern countries is multifaceted and it continues to be driven by energy security, economic interests, and closer cooperation in different sectors. Strong commercial ties with Middle Eastern economies, especially with Saudi Arabia, have also facilitated extending cooperation to emerging, innovation-oriented sectors—namely information and communications technology (ICT), renewable energy, healthcare, and food and water security. South Korea and Saudi Arabia have also forged closer cooperation within the framework of the Saudi Vision 2030. In an interview with Ghazanfar Ali Khan of Leaders Magazine, South Korean Ambassador Joon-Yong Park gave an overview of the growing bilateral relations. Here are the excerpts of the interview–

Question 1. How do you personally evaluate relations between the Kingdom and South Korea in different domains including political, economic, and cultural fields? 

Korea and Saudi Arabia have become strategic partners. The history of their relationship spans six decades and goes beyond that of official ties. Since the establishment of diplomatic ties in 1962, our two countries pursued fostering and developing close and mutually beneficial relationships. Korea has played a pivotal role in the infrastructure development of Saudi Arabia, while the Kingdom has ever been the primary provider of energy sources for the Korean economy.

In retrospect, during the 70s and 80s, over a hundred thousand Koreans worked on construction sites all over the Kingdom, developing a rapport between both countries, one can easily spot landmark buildings and infrastructures in major cities of the Kingdom, including – but not limited to – ministries’ buildings, airports, hospitals, universities, highways and residential areas built by Korean men et manus.

Meanwhile, Saudi Arabia has been a good friend to Korea, supporting Korea’s initiatives to promote peace and security on the Korean Peninsula. Likewise, Korea has consistently stood for the Saudi efforts to strengthen the peace regime in this region. Furthermore, Korea and Saudi Arabia have taken a common stance at the United Nations and other international organizations on various issues, such as counter-terrorism, denuclearization, development cooperation, sustainable development, etc.   

Although Covid-19 and its non-stop existence for almost 18 months hindered the in-person Saudi-Korean meetings, nevertheless before the pandemic, numerous high-level officials’ visits have been paid. This includes the visit of the then Korean Foreign Minister Kang Kyung-wha to the Kingdom in December 2019 and the visit of the Saudi Minister of Economy and Planning Mohamed Al-Towaijri to Korea in April 2019. Korea’s Trade Minister Yeo Han-koo paid an official visit to the Kingdom earlier this month (November 2021) to discuss ways to boost the bilateral trade between our two friendly countries, as well as announce the resumption of the FTA negotiations between Korea and the GCC.  

Most important was the visit of HRH Crown Prince Mohammed bin Salman to Korea in June 2019, which provided a huge momentum in elevating the Korea-Saudi bilateral relations to the next level of maturity. It marked the Kingdom’s highest-level visit in 21 years since the visit of the then-Crown Prince King Abdullah to Korea in 1998. His visit has been serving as momentum for expanding its cooperation into various new fields such as healthcare, smart infrastructure, ICT, renewable energy, defense science, and technology as well as cultural and people-to-people exchanges. 

Since two years ago, the people of both countries have witnessed more cultural exchanges including pop songs, dramas, and food of Korea. I feel amazed to see vigorous cultural exchanges in the private sector including the concert by the boy band BTS in Riyadh two years ago and the viral popularity of the Korean TV series, Squid Game this year. Celebrating the 60th Anniversary of our diplomatic ties next year, we are expecting more. 

Question 2. Please provide an overview of Korean-Saudi trade and investment relations, their volume, and their features. Please provide comments as to how they have evolved over the years, and how they have been affected during the Corona pandemic. 

Along the 59-year-old Korea-Saudi diplomatic journey, the Kingdom of Saudi Arabia has been a crucial trade partner of Korea.

Korea exported $29.4 billion to the Kingdom of Saudi Arabia in 2018 and $25.2 billion in 2019. Korea is highly dependent on oil imported from Saudi Arabia. Korea’s investment in Saudi Arabia began in 1968 and totaled US$5.261 billion as of the first quarter of 2020. Saudi investment, which has been on the rise since 2009, reached an annual high of $1.38 billion in 2015. However, it has been on a downward trend since 2016 mainly due to the low oil prices that started at the end of 2015.

The Covid-19 pandemic, definitely, negatively affected the trade between the two countries. Korea’s imports from the Kingdom dropped by 29.3% in 2020 compared to the previous year, while its export to Saudi Arabia decreased by 7.6% during the same period. As the world economy is gradually recovering from the effect of the pandemic, I believe that the trade between the two countries will grow again in the upcoming days.

Question 3. Which are the projects on which Saudi Arabia and Korea have made headway within the framework of the mandate of the Korea-Saudi Vision 2030 Committee? Please provide detailed information. 

The Kingdom plans to develop its domestic industries following its Vision 2030. As one of the major technology-based economies, Korea is welcome by Saudi Arabia as a partner sharing necessary technologies and operational know-how and training skilled workers, which are essential for the development of the Kingdom’s industry. This is done within the framework of the mandate of the Korea-Saudi Vision 2030 Committee. 

This Joint Committee is comprised of five subgroups, which are Energy and Manufacturing, Smart Infrastructure & Digitalization, Capacity Building, Healthcare & Life Sciences, and SMEs & Investment. It is actively contributing to nurturing the economic cooperation between the two countries. 

Question 4. Is there any official visit of Saudi or Korean top leaders on the cards in near future? If yes, then please give some information about the visit/visits?

Saudi Arabia is one of the major strategic partners of Korea, and thus, exchanging high-level visits is always possible. The Covid-19 pandemic, however, has hindered the scheduling exchanges of the high-level visits between our two countries. As the pandemic remains under control in both countries, I believe that it will not take a long time to resume meetings between the top leaders of our two nations, whether in Riyadh or Seoul.    

Question 5. How many South Korean companies have a direct or indirect presence in Saudi Arabia? Which are the major ones? Please provide a few names and some major projects they are handling at present?

Saudi Arabia is by far one of Korea’s largest overseas construction sites with cumulative orders of $149.3 billion in total up to the present. Korean companies won projects in the Kingdom worth $3 billion in 2019, $2.4 billion in 2020, and $2.3 billion in 2021. As the invaluable cooperation between the two countries continues, there are about 20 Korean engineering and construction companies currently present in the Kingdom. 

Major engineering and construction companies include Samsung C&T which participates in building Riyadh Metro and Tadawul Tower; Hyundai E&C which participates in Marjan Development Program Package 6 & 12 awarded by Aramco and some electric substation & transmission lines projects; Doosan Heavy Industries and Construction which participates in EPC (engineering, procurement, and Construction) for Yanbu-4 seawater reverse osmosis plant; Samsung Engineering which participates in building Hawiyah Gas Storage awarded by Aramco; and DL E&C which participates in building the third ammonia plant awarded by Maaden.

Moreover, in the field of trade and manufacturing, about 20 Korean companies are currently active including Samsung Electronics, LG Electronics, and Hyundai Motors. Among them, under the Korea-Saudi Vision 2030 partnership, Hyundai Heavy Industries (HHI), the 3rd largest shipbuilder in the world, has formed a joint venture, IMI (International Maritime Industries) in its partnership with Saudi Aramco, Bahri, and Lamprell, a UAE company, as well as SEMCO (Saudi Engine Manufacturing Company) which was formed with the shares of Saudi Aramco and Dussur. The IMI is now creating the Gulf’s biggest shipyard in Ras Al-Khair, Saudi Arabia. This shipyard, once completed, will be able to work on four offshore rigs and over 40 vessels a year, including three VLCCs (Very Large Crude Carriers). The total value of this shipyard project is $5.2 billion, in addition, Aramco and HHI will invest more than $400 million in that project. The SEMCO is building engine making factory and is expected to contribute greatly to the creation of Saudi Arabia’s shipbuilding industry supply chain. 

Question 6. The South Korean government seeks to push ahead with the establishment of a research center for nuclear energy in Saudi Arabia, according to a report from the South Korean Ministry of Science and Technology. I would like to know the status of this research center and also the status of the SMART Reactors to be built in the Kingdom. 

The cooperation in the domain of the SMART Project started in March 2015 when the Korean government signed an MoU with K.A.CARE (King Abdullah City for Atomic and Renewable Energy) to outline a joint venture to design and build two units of SMART in Saudi Arabia. The SMART (System-integrated Modular Advanced Reactor) is an integral-type small reactor, designed and developed, particularly for small or remote cities unable to be integrated into the main power grids due to their small population or remote location. It can produce 100 MW of electricity, or 90 MW of electricity and 40,000 tons of desalinated water concurrently, which is enough for 100,000 residents.

The governments of Korea and Saudi Arabia signed another MoU in September 2019 to work together to refine the reactor’s design, issue a license for usage in Saudi Arabia, and build a prototype. In addition, a separate agreement was also signed between KAERI and K.A.CARE to launch a joint nuclear energy research center. This center was established in KAERI and started operation in December 2019, with 11 Saudi engineers currently working on 6 research projects of it, along with about 10 Korean partners. 

Overall, the cooperation between Korea and Saudi Arabia in this field has lasted over several years, contributing to preparing the Saudis for building future nuclear energy capacity. I believe that Korea is an optimal partner for Saudi Arabia when it seeks to develop its nuclear energy industry whether it is the SMART or a large commercial nuclear power plant. 

Question 7. Are there some new projects currently won by the Korean companies through bidding? Please provide brief information about the projects and the companies, which have bagged the orders from the Kingdom? 

To name a few, in February 2021, Doosan Heavy Industries and Construction has been confirmed as a $712 million EPC contractor for the Yanbu-4 seawater reverse osmosis plant. This plant will have the capacity to process 450,000 cubic meters a day and is set to become operational in 2023.

Furthermore, in early October 2021, Hyundai E&C won the contract for the $167 million Madinah-Tabuk-Aqaba 500kv HVDC Transmission line package3. This is one of the electricity exchange projects as much as 3 gigawatts between Saudi Arabia and Egypt. It is expected to be completed in 2024. 

Question 8. Saudi Arabia signed a $3 billion financing deal with Korea Trade Insurance Corporation. What is the mandate of this deal and where the funds are being used? 

Back in February 2020, Korea Trade Insurance Corporation (Ksure; Korea’s official export credit agency (ECA)) reached an agreement on the financing deal with Saudi Arabia’s National Debt Management Center. This deal is in favor of Korea’s export of materials and equipment to the Kingdom. On December 22, 2020, a long-term financing agreement that amounts to $3 billion was signed, whereas Ksure will provide insurance cover for the total transaction.

This is the second in time and largest in scale ECA-backed facility that the Saudi Ministry of Finance has secured, and the financing provided through this agreement will be used for the Kingdom’s ambitious development projects in line with the Vision 2030 program. 

Question 9. There have been reports about collaboration between the Kingdom and Ssangyong Motor Company for designing and producing Saudi-made cars. What is the progress on these projects?

Under the goal of producing Saudi-made cars, Ssangyong Motor Company and SNAM (Saudi National Automobiles Manufacturing Co.) signed two Product License Agreements (PLA) in 2017 and 2019 respectively. The first PLA was signed in 2017 in Seoul to produce locally assembled products that will enter the local automobile market in 2020. To promote the auto industry, SNAM has secured a production site for cars of an area reaching about 1 million square meters and a site for primary part makers reaching another 1 million square meters in the Jubail Industrial Complex. Under this deal, the two companies will produce Ssangyong Motor’s Premium pick-up truck starting in 2020 through local assembly, and gradually increase production by 25,000 units per year. 

The second PLA was signed in 2019 in Jubail, succeeding the first agreement, through this, both sides agreed to produce specific models and sell them in the Saudi market starting in 2021. In addition, SNAM plans to establish a component cluster in the Jubail Industrial Complex in the offing to establish an efficient local assembly production system.

Unfortunately, the project made no more progress since the outbreak of the Covid-19 pandemic. In the meanwhile, Ssangyong Motor Company, one of the major automobile companies in Korea, is currently looking for a new owner due to financial difficulties.

Based on the historical cooperation between Ssangyong Motor Company and SNAM, I believe that the new owner of Ssangyong Motor Company could develop and implement their existing agreements. 

It is my understanding that Saudi has a national plan for developing the manufacturing industry including car production. Considering that Korea has developed automobiles with high quality faster than any other country in the last decades, Korea would be the ideal partner for Saudi Arabia in achieving its goal.  

Question 10. Which are the new developments on the cultural front? There was a proposal to set up a Korean language department in Saudi Arabia. Is this proposal moving ahead? If yes, then please share some information about this initiative. 

Nelson Mandela once said, “If you talk to a man in a language he understands, that goes to his head. If you talk to him in his language, that goes to his heart”. This phrase summarizes the importance of language in cultural exchanges. In this regard, I am very grateful for the Saudis’ growing interest in learning Korean. The Embassy held the ‘Korean Speech Contest’ this year virtually due to the Covid-19 situation. Each participant showed his/her passion for learning and practicing Korean. 

Reflecting the young Saudis’ keenness toward learning Korean, the Embassy is pursuing the establishment of Korean language courses in the major universities in Saudi Arabia. In Korea, 5 universities have long taught Arabic as a regular course. However, no universities in the Kingdom have a Korean language course.  

In addition, the Embassy is seeking to set up the King Sejong School in some universities in the Kingdom. This is an overseas school teaching foreigners Korean. It is named after King Sejong the Great, who invented the Korean alphabet (Hangul) 600 years ago. Whoever is interested in learning Korean will be accepted into the School. These pending issues are under discussion between the Embassy and the Saudi Ministry of Education. 

Question 11. Korea has its achievements when it comes to cinema, theatre, art, and music. Saudi Arabia is now opening its entertainment sector. Is there any existing cooperation or possibilities of cooperation in these areas between the two countries? Your comments, please.  

A recent Korean-made series “Squid Game” topped Netflix in Saudi Arabia. It indeed went viral here in Saudi Arabia and I repeatedly hear from my Saudi friends how impressive it was. As can be seen in this case, the interest in Korean cultural content such as Korean movies and pop music is increasing among the Saudi people. As the Covid-19 pandemic ends, cultural cooperation between the two countries is expected to be intensified through more exchanges of in-person cultural events. 

Question 12. What is Korea’s position on key regional issues including the conflict in Yemen, the Syrian crisis, Iranian intransigence, and ME Peace Process?

The Korean government is of the view that peace and stability in the Middle East are of great importance for the international community as a whole. As a strategic partner of Saudi Arabia, Korea acknowledges and supports all efforts made by the Kingdom to achieve and maintain peace in the Middle East. 

Question 13. Senior Saudi defense officials are currently visiting Korea. Your Vice Defense Minister Park Jaemin and Fayyadh bin Hamed Al-Ruwaili, the chief of the General Staff of Saudi Arabia’s armed forces, held a session of the two countries’ defense cooperation committee, early this week. What was the outcome of the meeting and talks?

The two sides reviewed bilateral cooperation in the field of military and defense and discussed issues of mutual interest including regional security. They highly appreciated the consistent cooperation and personal exchanges in the military domain between the two countries, including having held the defense cooperation committee during the Covid-19 pandemic, and agreed to continue to enhance the bilateral cooperation. 

The Korean side also explained the current security situation on the Korean Peninsula and requested Saudi’s support for Korea’s inter-Korean policy.

The two sides also reviewed the ongoing consultations on defense cooperation, in which the two parties agreed to actively facilitate the procedures aiming for more fruitful yields.  

Question 14. Your Foreign Minister Chung Eui-Yong and his Saudi counterpart, Faisal bin Farhan Al Saud, met on the sidelines of the UN General Assembly in New York recently. It was reported that the two ministers agreed to work on ways that would link Korea’s Green New Deal and Saudi Arabia’s Vision 2030. Please share some information in this regard. 

Korea plans to withstand and rise back from the crisis created by the Covid-19 pandemic and, at the same time, to go beyond the original pace of growth with its Green New Deal, which will promote digital innovation as well as a low-carbon and eco-friendly economy. To achieve the goals, the Korean government will invest 73.4 trillion won (USD 60.9 billion) and create 659,000 jobs by 2025. This is indeed a huge national project. I believe that Korea and Saudi Arabia can find common grounds in Korea’s Green New Deal and Saudi Vision 2030. 

Against this background, Minister Chung suggested that the two countries create a synergy effect by linking those two national megaprojects, which was welcomed by Minister Prince Faisal. He added, “the existing Korea-Saudi Vision 2030 Committee can be a forum to discuss global issues such as climate change”.  

Question 15. What are the major priorities of the Korean Embassy in Saudi Arabia under your leadership? What has been the biggest challenge?

Luckily, I will have the honor to celebrate the 60th anniversary of the diplomatic relations between the two countries. Taking this opportunity, my priority will be placed on contributing to upgrading the already extraordinary relations between Korea and Saudi Arabia into a stronger strategic partnership. To this end, I would like to emphasize the importance of people-to-people and cultural exchanges as one of the essential elements in forging a never-ending friendship between our two countries. As the Covid-19 is under better control in both Saudi Arabia and Korea, I believe that this year will be full of exciting and meaningful exchanges between the two countries’ cultural as well as economic and political. 

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