Tuesday, October 15, 2019
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UAE and South Korea can do more on banking ties

The Emirates Centre for Strategic Studies and Research last week organised the 10th Korea-Middle East Cooperation Forum under the theme of ‘Meeting Global Challenges through Partnership’. Among the topics was one about how to benefit from South Korea’s outstanding development experience.

Among Middle East countries, the UAE-South Korean ties are of particular importance because of the comprehensive and multi-faceted relations that extend to trade, investments, services, telecommunications, technology and nuclear energy.

Trade between the two touched $22 billion (Dh80.8 billion) in 2012, while trade between South Korea and GCC was $112 billion, constituting 11 per cent of the Far East economy’s foreign trade.

Investment flow between the UAE and South Korea has reached $3.2 billion, while Korean companies won contracts worth $28 billion in the UAE last year, an increase of 9.4 per cent compared to 2010. Among these are contracts for projects at four nuclear plants which were won after intense competition which pitted them against international companies.

Currently, there are 300 Korean companies in the UAE, which is considered the region’s largest market for Korean exports. South Korea is ranked fourth in trade with Asian countries, after China, India and Japan. South Korea imports 20 per cent of its oil needs from the GCC. It is also the world’s second largest importer of natural gas.

In a qualitative leap, the 2010 visit to South Korea by General Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, marked a defining point in the UAE-South Korea ties.

As a result, six million barrels of Abu Dhabi’s crude oil are stored in Korea. During the same year, the UAE and South Korea formed the UAE-Korea Business Council to forge a strategic partnership between the two sides.

It is vital for the UAE to focus on how to further develop the strategic partnership, which will have a positive impact on South Korea’s relations with the GCC and by extension with the Gulf Common Market.

To do so, it would be necessary to accelerate free trade agreement (FTA) talks between the two sides under the aegis of the GCC. This will help develop trade volumes thanks to the abolition of customs barriers and increase the competitiveness of Korean and Emirati products in each other’s markets.

The UAE must also develop technical and scientific cooperation by which Korean technology can be incorporated into projects here. This can be accompanied by the setting up of joint ventures as well as through training in new technologies.

The economies of the UAE and South Korean are considered among the most dynamic, which means both have significant capabilities for cooperation in energy. There is already such an agreement between the Abu Dhabi National Oil Company (Adnoc) and the Korea National Oil Corporation (KNOC) for exploration. This is in addition to significant opportunities in some of the other sectors.

To achieve this, it is necessary to strengthen cooperation in banking and financial services, which is still modest. The UAE and South Korea can do more to open this sector.

These are some suggestions that would contribute to the development of a strategic partnership, They need to be studied first and the Emirates Centre can play a central role in helping with implementing these approaches.

— The writer is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.