South Korea’s outlook in Central Asia

Paula Pop

The Korean presence in the Central Asian region started in the nineteenth  century when as a consequence of poor harvest and famine on the Korean peninsula, thousands of Koreans fled to work and earn a better living to Russia. Later, during the Soviet time, this minority ended up being deported by Stalin to more isolated places like Uzbekistan and Kazakhstan, so that a potential collaboration between them and the Japanese who were already occupying Manchuria, could be avoided. Nowadays there are around 500,000 ethical Koreans living in the region, the majority of them in Uzbekistan (approx. 176,900), Russia (approx. 176,411) and Kazakhstan (approx. 105,000).

Diplomatic relations between the Republic of Korea (Korea) and the newly formed states were established in 1992, when Korean cultural centers and associations were founded as well. Nevertheless, this ties have gone down dramatically after the 1997 Asian financial crisis.

The relations were further recovered and strengthened when President Roh Moo-Hyun was in power (2003-2008), period in which he organized two visits to Kazakhstan and Uzbekistan in 2004 and 2005 while launching as well a ‘Comprehensive Central Asia Initiative’. This new program has a variety of purposes such as: advancing cooperation, developing industries, businesses and diplomatic relations with the Eurasian continent, insuring energy security and sharing the Korean development experiences to enable more effective economic growth in the Central Asian states.

Moreover, since 2007, a Korea-Central Asia Cooperation Forum has been organised aiming to enhance understanding among the two regions and strengthen cooperation. This forum is considered to be the first multilateral dialogue and high level consultative mechanism between Korea and the 5 Stan-countries. Since its creation, the Forum has been a high level consultative mechanism that consolidated trust among private and public sector representatives and at diplomatic level alike.

The presidency of Lee Myung-Bak (2008-2013) developed these efforts through the ‘New Asia Initiative’(NAI) which also included a focus on Central Asia. As part of this program, the Korean president signed several agreements in 2009 with both Uzbekistan and Kazakhstan and agreed on multiple cooperative partnerships, especially in the energy field (in Uzbekistan- joint exploration oil and in Kazakhstan-joint development of the Jambil maritime oil block and power plant development), economic cooperation and trade.

Additionally, former President Park Geun-hye (2013-2017), outlined in 2013 her own plan with respect to the Central Asian relations in the so-called program ‘Eurasian Initiative’ with the motto ‘one continent, creative continent and peaceful continent’, advocating for a single and unified system of transport, energy, trade networks and cooperation in a wide spectrum of areas like science, technology, culture etc. In 2014, the president also paid a six days visit to Central Asia to promote her vision. This included that the ancient ‘Silk Road’ (ideas like to build the Silk Road Express from Busan to Europe) should be revived to connect energy supplies, transportation and electricity grids between Europe and Asia. For this plan to work,  the geographical connection through Central Asia plays a key role. Countries like Uzbekistan and Kazakhstan, with whom Korea already signed a memorandum of understanding on railroad cooperation, are seen as anchors and ‘hubs’ in the new Silk Road initiative. However, the sustainability of this initiative remains under question after its main advocate, president Park, got impeached and was followed in 2017 by Moon Jae In, who has not made yet any strategic declarations regarding South Korea’s plans for the Central Asian region.

However, in November 2017, the President of Uzbekistan, Shavkat Mirziyoyev, made a diplomatic visit to Seoul, at the invitation of President Moon, while attending the South-Korea-Uzbekistan business forum. President Mirziyoyev proposed the establishment of a Korean business centre in Uzbekistan. Nonetheless, the relations between the two nations are quite strong and since the establishment of the diplomatic relations between the two, 14 meetings have already been organised between the heads of states and in addition, Uzbekistan’s share in Central Asian trade with South Korea sums up to 50 per cent, making Uzbekistan Korea’s biggest trade partner in Central Asia. Moreover, South Korea represents one of the top five countries of imports for Uzbekistan. Thus far, there are in Uzbekistan 75 Korean companies and 460 enterprises founded with Korean capital and a total volume of investment  that exceeds  USD 7 billion.

In addition, South Korea has been involved in several projects in Uzbekistan by offering support and technological assistance to the likes of the free industrial zones Navoi and Angren and the intercontinental logistic centre at Navoi and Tashkent airports. Furthermore, in 2015 the construction of Ustyurt Gas Chemical Complex was completed, which comprises five plants of gas and oil exploitation and energy generation, being funded 50 per cent by Korean share-holding and companies. Approximately 85 per cent  of the total production is planned for exports. Uz-Kor Gas Chemical is the joint-venture company initiated by companies from both countries, missioned to develop, finance construct and exploit the natural resources in the Ustyurt region.

Further on, another joint-venture called LG CNS Uzbekistan was launched in 2015 between the LG CNS and Uzbek public owned companies, with the aim of fostering local ICT industry development and participating in government-led projects in the IT field, like creation of data-based systems, digital platform for e-government, digital tax system, smart card infrastructure for public transport and billing systems etc.

Moreover, in September 2018, the two countries are planning to launch a textile Techno Park in Tashkent, aiming to transfer Korean innovation and pursue joint research work in the field of textiles and development of alternative renewable sources. The initiative is funded by the Korean government through its resources for development cooperation (approx. USD 15 million).

Apart from this, between 2018 and 2021, companies from the two countries will collaborate in three projects aiming to modernize electrical networks and equipment in Bukhara, Samarkand and Juzzakh regions, having a total cost of USD1.84 billion.

However, from an economic perspective, Kazakhstan is considered to be the most important partner for Koreans in Central Asia, having approximately 200 Korean companies residing within its borders and having signed double as many economic agreements with South Korea than Uzbekistan did.

Since they established diplomatic relations, Kazakh President Nursultan Nazarbayev has already made five visits to South Korea and each of the previous three Korean presidents have also made state visits to Kazakhstan.

In April 2018, a Kazakh delegation met in Seoul with major representatives of Korean businesses and agreed to increase investment, mining and building projects, and boost trade turnover. At the end of 2017, it is estimated that there were around 400 joint economic projects between the two countries. In 2011 the two countries agreed to collaborate in a joint thermal power-plant project-Balkhash worth USD 9 million, the biggest mutual program until that time, with Samsung C&T and KEPCO holding jointly a 75 per cent stake in the project;  the rest of 25 per cent was held by the Kazakh Government. However, in 2016, Samsung C&T dropped the contract due to low oil prices and a delay in regulatory approvals which damaged the business rationale.

In 2011, South Korea signed an agreement for the creation of a joint-venture for supporting the realisation of second stage of constructions in the gas chemical complex in Atyrau with LG Chem as strategic partner. Another project in the oil exploitation field with Korean involvement is related to the offshore Zhambyl oil block, which was signed in 2008. Further cooperation between the two countries is intended in the field of geological exploration, health care (public private partnerships), road construction (Turkish-Korean concession) etc.

With this in mind, the relations between South Korea and Turkmenistan, Kyrgyzstan and Tajikistan remain quite marginal compared to the ones with the other two Central Asian countries.

One of the main opportunities from which South Korea is aiming to benefit in its relations with the Central Asian countries lies in its increasing need of energy and the fact that, being given the situation in the Middle East, it becomes more important for them to diversify their sources of energy. Therefore, Uzbekistan and Kazakhstan seem to be good alternatives. The Korean energy mix is highly dependent on the nuclear one, with the need of high amounts of uranium which as well. Uranium is also to be found in high abundance in Uzbekistan, with whom Korea already signed multiple pacts to secure imports of thousands of tons of it.

Moreover, the strength of such a collaboration lies mainly in its threefold perspective of diplomacy, aid and trade and the fact that their economic relationship and interests mainly compliment themselves (energy needs on one side and technology upgrading on the other) and create an essential win-win situation for both regions. Additionally, the fact that, as opposed to China US, Japan or Russia, South Korea has no particular ‘past political baggage’ of meddling in the political development of other countries, creates a very positive image of the country among the Central Asian nations. On a similar note, the fact that the country is only a middle power and thus presents not so many geopolitical or ‘neo-colonial’ ambitions and no national sovereignty threats as opposed to other nations involved in Central Asia (Russia, China), offers them an even stronger advantage and places it as a counter-balance political/economic partner to the classic powers in the region.

Especially when countries like the US are being more reluctant in making business in such unstable and uncertain environments, South Korea’s activities in the region are regarded in a very positive way, being awarded similar strategic goals, interests and alliances between countries.

Also, the threats regarding the relation between the two regions still exist, especially when there is high economic volatility in the Central Asian region, underdeveloped civil society, weak democratic institutions, and corruption that could all endanger the effectiveness of South Korea’s energy diplomacy in the region.

Other identified weaknesses could be the fact that the level of Korean investments in these countries is still much lower than the Chinese and Japanese ones which might as well affect their negotiation and influential power, especially when all three countries are equally eager in securing their own energy requirements. Further on, the geographical distance between the region, the poor physical infrastructure, as well as the though and strict border controls in Central Asia and the reluctance of relaxing the requirements are some other drawbacks of the Korean-Central Asian relations.

Further on, the fact that Seoul is determined to collaborate with regimes that are considered to be authoritarian and consequently turn a blind eye to the weak rule of law, democracy and human rights abuses happening in the region, might as well attract harsh criticism from other democratic countries toward their activities in the region.

Published by Chamber of Commerce and Industry Romania-Turkmenistan

The Chamber of Commerce and Industry Romania-Turkmenistan (CCIRom-Tkm) is a non-governmental organization of public utility, autonomous and apolitical, founded in 2009 to promote the economic cooperation between Romania, Turkmenistan and other countries in the Central Asian region.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: