Africa beckons the world with its huge energy resources and fast-expanding markets. But its vast potential has been a mirage for Korea, which lags behind its rivals in aid, influence and strategy.
After years of failed efforts, the nation is reviving its drive to bolster partnership with pledges of increased assistance and investment.
In the past week, Seoul hosted the leaders of Uganda and Mozambique and the top diplomat of Gabon, with energy, trade and development aid topping the agenda.
“We have been saying that we would invest more in political and economic ties with African countries but at this point Korea’s presence is close to none,” a Foreign Ministry official told The Korea Herald.
“Our diplomatic infrastructure and budget for Africa are simply insufficient. The mid- and long-term resource diplomacy has already been billed a failure. We’re actually in a seed-planting stage,” he said on condition of anonymity.
World powers are rushing to the next frontier of global growth, seeking access to its vast natural resource reserves and bigger slices in the booming markets for goods, services and infrastructure.
Last week, Japanese Prime Minister Shinzo Abe unveiled a five-year commitment of public and private assistance worth 3.2 trillion yen ($32 billion) in a meeting with some 50 African leaders. The package includes $14 billion in official development assistance and $6.5 billion in support for infrastructure improvement.
Beijing has pledged $20 billion in loans over the next two years and 600 million yuan ($98 million) in ODA over the next three years. It also paid for and built the $200 million headquarters of the African Union in Addis Ababa, Ethiopia, which opened last year.
Washington has funneled more than $100 billion in aid, with around 11,000 Americans from the state aid agency and other organizations working across the continent. U.S. President Barack Obama traveled there twice in his first year as president.
However, Korea’s presence remains meager, deterred by geographical distance, the poor business climate and political instability.
Since 2007, Seoul has given Africa about $5.9 million, less than 20 percent of its total ODA. Korea runs 22 diplomatic missions across the continent, 16 of them in sub-Saharan Africa, whereas the U.S. operates 52, China 43 and Japan 25.
Former President Lee Myung-bak’s ambitious resources diplomacy was dealt a blow last year by a graft scandal connected to a much-hyped diamond-mining project in Cameroon.
Despite its late entry and relatively small aid volume, Seoul is pinning hopes on its advanced information technology, construction know-how and, more importantly, its development experience that could help the countries fight poverty and build industries.
Korea’s renewed passion was underscored last week when President Park Geun-hye held separate summits with her counterparts Yoweri Museveni from Uganda and Armando Guebuza from Mozambique. Foreign Minister Yun Byung-se also met his Gabonese counterpart Emmanuel Issoze-Ngondet on Friday.
While pledging to boost cooperation in trade, investment, energy and infrastructure during the talks, Park was also keen to pass on the experience from the Saemaul Movement, an agricultural and rural reform initiative in the 1970s.
“I believe that Uganda will become the breadbasket of East Africa if it succeeds in achieving systematic rural development through the Saemaul Movement with its prosperous climate, rich soil and the national character of diligence,” Park told Guebuza last Tuesday.
She expressed confidence that the movement will help Mozambique and Uganda realize their national development visions, for 2025 and 2040, respectively.
The initiative launched by her father, strongman Park Chung-hee, called for diligence, self-help and cooperation among villagers. It was deemed vital in modernizing the rural economy and boosting up community income until the 1980s.
But skeptics have questioned the feasibility of the program in other countries, citing cultural differences and past failures of similar campaigns.
Park Young-ho, chief of Africa research at the state-run Korea Institute for International Economic Policy, stressed the need of tailored approaches, local residents’ participation and synergy with other development projects, which are key to its success.
“It will be desirable to start with strategic pilot projects and then spread successful cases to other places, rather than to carry out small-scale programs in numerous countries at the same time,” Park said in a research paper.
Seoul’s renewed push coincides with Africa’s ongoing transformation as one of the fastest-growing parts of the world.
Fueled by robust foreign investment and mineral exports, six African nations ― Angola, Nigeria, Ethiopia, Chad, Mozambique and Rwanda ― were among the world’s 10 fastest-expanding economies over the last decade. The World Bank forecasts more than 5 percent growth for sub-Saharan Africa in 2013-2015.
“This growth is not just due to rising commodity prices but is also driven by a more vibrant private sector supported by an improved business climate. There have also been dramatic improvements in governance and economic management,” the Washington-based Brookings Institution said in a recent report.
“As a result of these developments, Africa’s middle class is now growing rapidly, and the continent has become a major market for consumer goods. … Africa is indeed on the path to claiming the 21st century.”
The region’s enormous resources deposits have been the main driving force behind the massive influx of foreign capital. Africa accounts for about 10 percent of world crude reserves and holds major mines of diamonds, white gold, manganese, cobalt and other metals.
Korea’s presence in the continent has largely been led by private businesses, which are now diversifying their mining-focused portfolios and expanding production bases, cashing in on cheap land and labor and low tariffs.
POSCO is developing an iron ore mine in Cameroon, a copper field in the Democratic Republic of Congo and a coal reserve in Mozambique. In Zimbabwe, it agreed with local firm Anchor Holdings to launch a mining venture.
The state-run Korea Gas Corp. has a 10 percent stake in an international consortium that has so far discovered 7.5 trillion cubic meters of natural gas reserves off the Mozambican shore.
Other explorers in the region include Daewoo International, SK Innovation and the state-owned Korea Resources Corp.
Africa is also emerging as a future hotspot for the telecom and personal device industry, for which local electronics giants Samsung and LG lead the pack.
Samsung is promoting regionally crafted air conditioners and flat-screen TVs with safeguards against sudden power cuts and humidity, and laptops powered by solar-rechargeable batteries.
In late 2011, the world’s largest smartphone and memory chip maker unveiled a goal of earning $10 billion in revenue by 2015 in sub-Saharan Africa with its consumer electronics and mobile gadgets.
LG, meanwhile, has also been developing localized products, providing rare customer service, opening new offices and boosting corporate social responsibility programs across the continent.
It teamed up with Emirates Telecommunications Corp., a top telecom operator better known as Etisalat, to enter the Middle Eastern and African markets in 2011.
“Despite increasing opportunities associated with ample resources, expanding infrastructure and the growing consumer market, doing business in Africa entails many risks such as political unrest, rampant corruption and slow administrative processes,” Suh Sang-hyun, an Africa specialist at the private POSCO Research Institute, said in a recent analysis.
“But even with such risks, there will be a consistently increasing need to branch out into Africa especially in the aspect of securing preemptive dominance in the market.”
By Shin Hyon-hee (
heeshin@heraldcorp.com)
