Experts advise Seoul to shift from passivity and embrace bold initiatives
Korea should prioritize hydrogen and smart city initiatives to enhance its influence on NEOM, a pioneering city being built in Saudi Arabia by leading companies from around the world with the goal of maximizing efficiency and eco-friendliness for the anticipated 9 million residents, according to government officials and experts, Tuesday.
As the oil-rich kingdom seeks to transition from fossil fuels to renewable energies to address the climate crisis and align with global initiatives on carbon neutrality, Seoul should capitalize on Saudi Arabia's needs by showcasing Korea's capabilities, particularly in the world's largest city construction project, the experts said.
Ryou Kwang-ho, a senior researcher at the Korea Institute for International Economic Policy, emphasized that hydrogen is a burgeoning industry in the Middle East and said Korea should actively support its development within local contexts.
"At present, there are 112 hydrogen projects across the Middle East, with 12 focused on blue hydrogen and the remainder on green hydrogen," Ryou stated during the NEOM and Investment Opportunities in Saudi Arabia, the fourth installment of The Korea Times Global Business Club held in Seoul. "Saudi Arabia is actively pursuing this energy transition. It's part of the ongoing movement among oil-producing nations in the region to harness their oil resources for the development of new, clean energy sources."
Korea should also leverage smart city initiatives to optimize the presence of Korean firms in NEOM, according to Woo Jong-ha, director of the overseas construction support division at the Ministry of Land, Infrastructure and Transport. He highlighted the perspective of Park Sang-woo, the Korean land minister, noting that instead of solely entering into subcontracts with Saudi Arabia as previously done, Korea should focus on making direct investments for the development of NEOM and other areas within the country.
"Korea has already implemented various smart city policies, giving us an advantage when engaging in smart city projects in Saudi Arabia," Woo said. "We should further promote these policies to the kingdom and facilitate assistance in master-planning these projects."
According to the experts, another area for improvement in Korea's trade relations with Saudi Arabia is for Korean firms and the government to take bolder initiatives and engage with the country more proactively. They noted that Riyadh has demonstrated a more assertive stance in this regard, and now it's time for Korea to reciprocate with a similar approach.
"Compared to other Middle Eastern nations, where trade with Korea has predominantly occurred in specific industries like defense or nuclear energy, Saudi Arabia's trade with Korea has encompassed almost all categories," explained Kim Jong-chul, the director-general for international trade relations at the Ministry of Trade, Industry, and Energy. "Thus, there is significant potential to elevate the level of partnerships across these categories. The issue lies in the fact that Korea's business proposals to Saudi Arabia have been considerably fewer in number than vice versa. Korea should cease waiting for Riyadh to initiate contact and instead take proactive steps to establish closer ties."
The experts noted that Korea possesses notable strengths compared to other countries when it comes to trading with Saudi Arabia, particularly in construction technologies. They highlighted that this prowess has been demonstrated through the development of cutting-edge building structures by Korean companies in the kingdom.
"Not only in the planning stages but also in the implementation of construction projects, Korean firms have distinguished themselves through the use of advanced technologies," Woo said, emphasizing that this evaluation has been consistently recognized among officials in Riyadh. "Such finesse, cultivated over time through experience, can also be applied to various other industries such as electronics and mobility, fostering greater bilateral cooperation."
The experts also highlighted the various communication channels between the two countries as another strength of Korea. This transparency is evident in Korea's construction projects in Gulf Cooperation Council (GCC) countries, which accounted for 47.4 percent of all of the overseas projects in 2022, the highest figure in the past decade. Among GCC nations, Saudi Arabia was the location for the majority of these projects.
"The channels for bilateral communication have been systematically established across various Korean government ministries and bureaus, including the land ministry and the SMEs and startup ministry," Ryou explained. "Saudi Arabia's significance among Korean authorities continues to grow."
Kim highlighted another advantage for Korea, emphasizing that the two countries currently hold significant mutual interests. He noted that while his office dealt with 104 countries last year, Saudi Arabia was among the select few nations that he considered to be of utmost importance to Korea.
"An ideal diplomatic partnership for Korea follows a '3+1' formula, where one condition is subject to Korea and three conditions to the counterpart nation," Kim explained. "The three conditions include a strong willingness for industrial transition, a willingness to form an alliance with Korea, and economic prosperity. Saudi Arabia meets all of these conditions. Korea's only requirement is whether it is interested in the counterpart country. Korea has a deep interest in Saudi Arabia across various fields, from culture to entertainment and smart farming. The vibrancy between the two countries has also piqued the interest of other Middle Eastern nations such as the United Arab Emirates, Qatar, Oman, and Kuwait."
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Autor(en)/Author(s): Ko Dong-hwan
Quelle/Source: The Korea Times, 12.02.2024
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