This CAI paper follows up on a previous CAI paper which was entitled Korea-Africa aid and investment: Fostering an agricultural revolution.⁽²⁾ As stated in that piece, the emphasis of both articles is to describe and analyse the relationship between South Korea and Africa, due to the surprising dearth of attention this budding relationship has received and the fact that South Korea is among Africa’s top five trading partners.⁽³⁾ Whilst the previous article focused primarily on how Africa stands to benefit from said relationship, this CAI paper considers said benefits as well as the stimuli of South Korea’s interest in Africa.

The nature of South Korea’s interest in Africa

The President of South Korea, Lee Myung-bak, recently embarked on a nine-day trip to Africa, visiting South Africa, the Democratic Republic of the Congo (DRC), and Ethiopia. As widely reported in Korean media, there is a South Korean belief that better ties with African states could open a market for investment in infrastructure construction and might also allow for greater exploitation of resources and the enlargement of export markets.⁽⁴⁾

It was with this in mind that South Korea recently announced that it aims to increase bilateral trade with South Africa from approximately US$ 4 billion to US$ 10 billion within the next five years. This was undoubtedly discussed by President Lee at the bilateral summit with President Jacob Zuma, where greater collaboration in energy and natural resources was also discussed, unsurprisingly - South Korea is seeking to participate as a bidder for South Africa’s US$197 billion atomic power plant project – a potentially lucrative contract.⁽⁵⁾ Similarly, President Lee announced during a two-day visit to the DRC, after a one-on-one with President Joseph Kabila, that South Korea aims to foster stronger economic ties and to assist the DRC in developing natural resources and building infrastructure in the country. In Ethiopia President Lee did much of the same, as he announced that South Korea is keen to share its development experience with Ethiopia, and to promote green growth and cooperation in agriculture, trade, and investment.^(6,7)

Accordingly, seven agreements were signed between the DRC and Korean companies on the 7 July 2011, including Samsung C&T Corp., Pohang Iron and Steel Co., and Korea National Oil Corp (KNOC). The agreements range from projects to build copper and cobalt mines to oil exploration, water infrastructure, and solar energy.⁽⁸⁾ Similarly, the national oil company of South Africa – PetroSA – signed a memorandum of understanding (MOU) with the KNOC, which will furnish KNOC with the opportunity to search for oil and gas opportunities within South Africa and the rest of Africa, as declared by KNOC CEO Kang Young, who was quoted as saying that “The MOU with PetroSA will give KNOC a golden opportunity to advance into African regions.”⁽⁹⁾ South Korea also declared that the steel firm Posco, LG, Hankook Tyre, and Korea Trade Insurance will establish regional headquarters in Gauteng, South Africa with HSG, a manufacturer of heavy metal components, and establish regional headquarters in Richards Bay, South Africa.⁽¹⁰⁾ Industries outside of manufacturing and technology are also taking interest, for example, Cheil Worldwide, an advertising agency, initiated operations in South Africa in March of this year,⁽¹¹⁾ not surprising given that South Africa is widely perceived as the gateway to Africa.

South Korea has reached similar agreements around the continent, including a natural gas project agreement with Mauritania this year,⁽¹²⁾ purchasing land in Tanzania for agricultural production in 2009,⁽¹³⁾ participating in a uranium project in Niger, which will secure South Korea’s right to transport 400 tons of uranium each year for ten years starting 2013,⁽¹⁴⁾ an agreement with Madagascar that secures 30-thousand tons of nickel every year,⁽¹⁵⁾ and further agreements with Kenya, Tanzania, and Zimbabwe to secure sources of ferrochrome and carve out a role for Posco in national development and infrastructure projects in said countries.⁽¹⁶⁾

The Korea Trade-Investment Promotion Agency (KOTRA) established Korea Business Centers in Ethiopia, Ghana, and Cameroon in 2011, bringing the total of such centers to seven around the continent. These centers were established with the intention of easing Korean entry into African markets.⁽¹⁷⁾ South Korea’s interest can, like that of China, in essence be attributed to a desire for natural resources, since South Korea has very few of its own.

Conclusion

South Korean involvement increases the number of noteworthy foreign players in Africa, which bodes well for Africa, certainly in so far as it shifts attention, even if momentarily, away from the perceived West/China dichotomy, for South Korea is neither western, nor another China. Although South Korea will unlikely ever truly compete with China or the West (if Africa is taken as a whole, for South Korea can certainly compete in certain countries and industries), it can still make some significant contributions to development on the continent and, in some sense, foster greater maturity in terms of African attitudes toward the external by challenging the trite West/China dichotomy and its hegemony over the intellectual framework of Africa policymakers. South Korea – as a full democracy – illustrates through its interaction with Africa that African states do not need to embrace one extreme – the West or China – but can explore a whole range of possibilities of socio-economic and political and cultural development.

NOTES:

(1) Contact Casper Hendrik Claassen through Consultancy Africa Intelligence’s Optimistic Africa Unit ( optimistic.africa@consultancyafrica.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).
(2) C.H. Claassen, ‘Korea-Africa aid and investment: Fostering an agricultural revolution’, Consultancy Africa Intelligence, 16 May 2011, http://www.consultancyafrica.com.
(3) Loyiso Langeni and Mark Allix, ‘Korean firms to build plants in SA’, BusinessDay, 8 July 2011, http://www.businessday.co.za.
(4) Jonsson, G, ‘Global Insider: South Korea-Africa Relations’, World Politics Review, 7 July 2011, http://www.worldpoliticsreview.com.
(5) So-hyun Kim, ‘Lee discusses nuclear plant deal with Zuma’, The Korea Herald, 5 July 2011, http://www.koreaherald.com.
(6) Ji-hae Yoo, ‘President Lee flies to Africa for Pyeongchang bid, energy ties’, Arirang, 2 July 2011, http://www.arirang.co.kr.
(7) Christy van der Merwe, ‘South Korea keen to boost business relations with Africa’, Polity, 13 June 2011, http://www.polity.org.za.
(8) Michael J. Kavanagh, ‘Posco, Samsung, Among Korean Companies to Sign Congo Deal’, Bloomberg, 8 July 2011, http://www.bloomberg.com.
(9) SAPA, ‘PetroSA joins forces with Korean firm’, Fin24, 5 July 2011, http://www.fin24.com.
(10) Jonsson, G, ‘Global Insider: South Korea-Africa Relations’, World Politics Review, 7 July 2011, http://www.worldpoliticsreview.com.
(11) ‘Korean companies stepping up advances into Africa’, The Dong-A Ilbo, 6 July 2011, http://english.donga.com.
(12) Jonsson, G, ‘Global Insider: South Korea-Africa Relations’, World Politics Review, 7 July 2011, http://www.worldpoliticsreview.com.
(13) Ibid.
(14) You-sun Choi, ‘Korea to Strengthen Self-Sufficiency in Energy Development’, Arirang, 16 June 2011, http://www.arirang.co.kr.
(15) Ibid.
(16) Loyiso Langeni and Mark Allix, ‘Korean firms to build plants in SA’, BusinessDay, 8 July 2011, http://www.businessday.co.za.
(17) ‘Korean companies stepping up advances into Africa’, The Dong-A Ilbo, 6 July 2011, http://english.donga.com.

Written by Casper Hendrik Claassen ⁽¹⁾