President Park Geun-hye is in the middle of a tour of four Middle East nations, hoping to lay the ground for what she calls a “second Middle East boom” for the Korean economy.
Park’s nine-day visit to Kuwait, Saudi Arabia, United Arab Emirates and Qatar is timely in that it comes as Korea and the region seek a closer relationship, especially in the economy.
Bilateral ties between Korea and the Middle East used to be limited to energy and construction, as Korea depends on imports for most of its energy sources while the Middle East is a major overseas market for its builders.
For instance, Korea, the fifth-largest importer of crude oil in the world, imports 71 percent of its crude oil from the four states and receives 24 percent of its overseas plant orders from them.
Their economic ties in other sectors remain limited, as seen by the fact that investment from the Middle East stood at $220 million, 1.2 percent of the total foreign investment Korea received in 2014. Korean investment in the region amounted to $1 billion, 4 percent of its overseas investment.
But there certainly is a lot of potential for increasing bilateral cooperation beyond energy and construction. Most of all, the Arab nations’ efforts to diversify their industrial landscapes ― lowering their dependence on oil and developing new growth engines ― create opportunities for Korea.
This makes sense because Korea has a relatively high competitiveness in the sectors the Middle East states want to foster as key industries ― nuclear power generation, health care, manufacturing, food and information and telecommunications.
Health care is a good case in point. Korea has already emerged as a top medical tourism destination for affluent citizens in the Middle East. About 2,500 people from the four states Park included in her itinerary visited Korea in 2013 for health care and medical treatment. Those from the UAE topped the average amount of individual spending during their stay here ― 17.7 million won. This is far more than second-placed Kazakhstan, whose per capita spending was 4.56 million won, Indonesia with 1.93 million won and China with 1.81 million won.
Under active support from their governments, Korea’s Seoul National University signed a contract last year to operate and manage a hospital in the UAE. It marked the first time that a Korean hospital was selected to operate a major general hospital overseas.
In a similar deal, Seoul St. Mary’s Hospital formed a partnership with VPS Healthcare Group in Abu Dhabi on the establishment and operation of a health promotion center in the city.
It is encouraging that the Korean government and industry officials see similar bright prospects for cooperation in other sectors. The 116-strong business delegation accompanying Park on her current visit attests to the Korean side’s hope and resolve to upgrade and expand economic ties with the Middle East.
In the mid-1970s, the Middle East emerged as a major source of foreign currency, with many Korean construction workers sending home money they earned in faraway deserts. The hard-earned “Middle East boom” money engineered the economic development and industrialization, often called the “Miracle on the Han River.”
When President Park mentioned a “second Middle East boom,” she might have thought about the miracle on the Han River, which refers to the economic development achieved during the reign of her late father, the former president Park Chung-hee.
It is hoped that the junior Park’s trip will be successful and provide momentum to ignite a new Middle East boom, thereby helping Korea pull its economy out of its long-extended slump.
