Yoon Sang-Jick, Minister of Trade, Industry and Energy, Republic of Korea: Interview

Interview: Yoon Sang-Jick

Which sectors in the GCC present the most favourable opportunities for further expansion by South Korean companies in the coming years?

YOON SANG-JICK: The GCC member states are seeking to bolster their energy industries and revamp national infrastructure using financial strength from their hydrocarbons revenues. To do this governments are placing orders for engineering, procurement and construction (EPC) projects such as power plants, oil refineries and petrochemicals facilities.

It is here that I detect both challenges and opportunities ahead for greater collaboration with the GCC. South Korean companies – with their longstanding and innovative approach to harnessing the power of technology – can play a vital role in helping the GCC achieve these goals. Indeed, they already have a strong track record in the region and have successfully implemented large-scale projects, including major construction works in Saudi Arabia and nuclear power plants in the UAE. Looking ahead to the future, we can expect the consolidation and deepening of bilateral relations as South Korea continues to improve its technological strength to better meet the needs of EPC projects in the GCC region.

What role can GCC member states play in ensuring the energy security of South Korea?

SANG-JICK: As the world’s fifth-largest oil importer and eighth-largest oil consumer, ensuring a stable supply of energy resources is a significant priority for South Korea. As a key and valuable energy ally and partner, the GCC has contributed greatly to South Korea’s remarkable economic development and to its national energy security, accounting for about 70% of the country’s total oil imports.

At present, the UAE is the only country within the GCC where South Korean companies are participating in oil and gas projects. All of the oil produced in these is imported to South Korea. We support such mutually beneficial business partnerships, and I hope that South Korea can expand them to other GCC countries over the coming years.

Other than hydrocarbons trading, where do you see potential for further economic cooperation and between the GCC and South Korea?

SANG-JICK: Trade between South Korea and the GCC has grown handsomely, reaching $123.4bn as of the end of 2013. More specifically, South Korea exported a total of $17.7bn in goods such as automobiles, electronics and industrial equipment, while importing $105.7bn in oil, gas and related goods.

Indeed, to prepare for a new post-oil era, GCC countries are currently trying to diversify their economies away from an over-reliance on hydrocarbons. South Korea is as an ideal business and investment partner for such diversification goals, in areas including education, medical devices, national security and renewable energy, in addition to our traditional partnerships in the energy sector.

To what extent will negotiations over free trade contribute to a further strengthening of economic ties between South Korea and the GCC?

SANG-JICK: The first round of negotiations for the South Korea-GCC free trade agreement (FTA) were held in July 2008, followed by two more rounds of discussion in March and July 2009. During these negotiations, the two sides made significant progress in areas such as government procurement and economic cooperation. Unfortunately, the South Korea-GCC FTA was temporarily suspended after the GCC announced a moratorium on all such agreements in early 2010. If, however, the GCC lifts the moratorium in the future, it could open up the possibility of resuming the stalled bilateral FTA negotiations. Signing the FTA would help South Korea secure a stable supply of energy resources, as well as present new opportunities for South Korea’s construction companies to enter the GCC’s promising plant market.