South Korean-Uzbek economic cooperation meets mutual interests

Business Materials 21 September 2012 16:17 (UTC +04:00)

Azerbaijan, Baku, Sept. 21 / Trend /

Trend commentator Viktoriya Zhavoronkova

Uzbek President Islam Karimov's current visit to South Korea and an agreement on economic cooperation development achieved during the visit has once again demonstrated both sides mutual willingness to develop it further for a variety of projects.

At present, Korea is not behind China in terms of the multi-vector direction and amount of declared investments. Projects are being implemented in a variety of industries - textile, motor-car production, fuel-energy complex, banking and financial sectors and the development of communications, telecommunications and health in Uzbekistan with Korean investments. The participation is ensured in the modernisation of the stock market.

Korean investments in Uzbekistan's economy will exceed $5 billion in the next few years of which more than $2 billion have been completed.

According to some experts, a significant feature of economic relations is that they are formed according to the principle of being complementary. Korea, having no abundant natural resources, is interested in placing the investments in Uzbekistan's mineral-rich and fuel-energy resources.

At the same time, advanced technologies and investments of Korean partners in the new and modernised existing production facilities and the development of export industries are important for the Uzbek side.

As opposed to Western and several other investors, the Korean government does not set different categorical political conditions while investing the projects with the Uzbek government.

It is significant that a rather large Korean Diaspora lives in Uzbekistan. This contributes to the development of Uzbek-South Korean relations in a cultural sphere.

The Uzbek and South Korean presidents during regular summits consistently confirm a friendly outlook of strategic cooperation and commitment to the development of mutually beneficial bilateral cooperation which gives new and powerful impetus to the development of relations.

All this helps and makes the presence of Korean business in the country attractive for Uzbekistan.

One of the largest investment projects implemented in Uzbekistan was the establishment of the joint venture UzDaewooAuto in 1996. In fact, it essentially launched the establishment of the Uzbek car industry.

The Uzbek-Korean bank 'UzDEUbank' and several major joint textile enterprises were established during these years.

Korean Daewoo motors leaving the joint venture in connection with its own economic problems, as well as bankruptcy of Kabool-Uzbek Co did not cool the enthusiasm of the partners to continue and develop the cooperation.

It should be recalled that a number of major projects confirming strategic cooperation have been recently implemented in Uzbekistan with Korean investments. The Ustyurt gas-chemical complex construction project worth over $4 billion is among them.

Korean airline Korean Air has created an international intermodal logistics centre on the basis of Navoi airport.

The largest foreign bank in the country is expected to be established on the basis of operating UzKDB Bank and assets of The Royal Bank of Scotland (RBS) at Royal Bank of Scotland Uzbekistan (RBS Uzbekistan) bought by Korean KDB, and the Uzbek stock market modernisation project, carried out by the Korean Stock Exchange.

At present more than 350 companies with South Korean capital operate in light, chemical, food industries, trade, engineering industry, housing and utilities, healthcare, tourism and services in Uzbekistan.

As a result, the volumes of trade turnover which reached $1.15 billion with an increase of 1.5 times as of the first six months compared to the same period last year are the largest in the structure of Korea bilateral trade with Central Asia. This confirms the effectiveness of bilateral dialogue.

Further expansion of cooperation with Korea will provide Uzbekistan with an opportunity to realise its intentions to modernise the economy and increase export potential.