Wednesday, 12 August 2020

The Korean Connection

Updated: December 24, 2011 10:43 am

During my visit to Japan in October, one leading news anchor in Tokyo asked me a very interesting question—what do you use more—Japanese or Korean brands? I exactly could not answer but started counting in her presence the items—car, TV, refrigerator, washing machine, air-conditioner, music system etc.—and their brands. Then I realised that I used more Korean items than the Japanese ones. The anchor did not exactly like my answer, but she explained why it was so. And she was telling me the same thing that I had heard from many Japanese business leaders earlier that “Koreans have won the race in India”. The Japanese now want to manufacture their world-class products in India in a big way, but they are little late. The Koreans are way ahead.

And if the Korean companies are doing so well in India it is because the Japanese, unlike the Koreans, did not take the risk of investing in India. They concentrated more in on China. Now, the Japanese are realising that too much stakes in China would boomerang on them and they must diversify. But that is a different story. The point is that as far as the Indian market is concerned, the Koreans have outsmarted the Japanese. South Korea is the fifth-largest investor in India. In fact, in the infrastructure sector, it is the third largest. If everything goes well, Pohang Iron and Steel Company (POSCO), South Korea’s largest steelmaker, will start a US$2-billion project in Odisha, making it the single-largest foreign direct investment in India. South Korean business groups such as Hyundai, Samsung, LG and others have an active business presence in India and are expanding their businesses into different sectors. So much so that together the LG and Samsung now account for nearly 60 per cent in the consumer market in India! There is now increased focus on cooperation between small and medium companies of the two countries.

It was against this background that I decided that Uday India must do a comprehensive story on the Korean success. This week’s cover story is the result. The South Korean Ambassador to India has been kind enough to give our readers his assessment of the rapidly growing interactions between New Delhi and Seoul. I can only complement to what he has shared.

In my opinion, as “strategic partners”, South Korea and India have shared responsibilities towards political and economic stabilities in Asia and the world. After all, South Asia and Northeast Asia are among the major trouble spots of the world. In South Asia, the prevailing war-like situation between India and Pakistan and in Northeast Asia the intensifying tension on the Korean peninsula have caught global attention because of their potential to challenge the stability of not only their respective regions but also Asia and the world. In essence, the problem in these two places is the division of what was once a single country into two or more sovereign entities.

South and North Korea have not adjusted to this division and both expect eventual reunification of the peninsula. The problem is the manner and nature of reunification, whether it will on the terms of North or South Korea. While South Korea is prepared for slow, steady and peaceful progress toward eventual reunification, the communist regime in the North continues to show its aggressive designs on the South and lambast its democratic regime. Going by the present indications, North Koreans, suffering from famine and underdevelopment, particularly in the wake of the dictatorial regime in Pyongyang being unable to secure any longer the food and oil from China and Russia at “friendship price”, want to join their brethren in South Korea. Because of regular defections and communication revolution, they now know the reality. Besides, North Korean regime in every probability is going to collapse sooner rather than later as the change of power to the third generation is not going to be that smooth.

On the other hand, in South Asia, though there are fringe elements that would like the restoration of undivided India, undoing the partition is not the stated policy of any of the countries concerned. The problem, however, is Pakistan’s contention that the division or partition is still incomplete, something that India does not agree to. Pakistan has eyed many areas that are integral parts of India, the most famous being Kashmir.

The second common element in South Asia and Northeast Asia is the fact that, while both India and South Korea show genuine intent to extend friendship to Pakistan and North Korea respectively, their offers are, more often than not, rebuffed in some form or the other. And coincidentally, both Pakistan and North Korea are essentially authoritarian countries, deeply controlled by their respective military wings. The third common feature to South Asia and Northeast Asia is that both regions have nuclear weapons or the technology to produce them. Both India and Pakistan have declared and tested nuclear weapons, while it is an open secret that both the Koreas posses the know-how to make nuclear weapons. In the case of North Korea, the country is suspected to be in possession of two or three bombs in its arsenal.

What is most worrisome is the growing linkage between Pakistan and North Korea in the field of developing weapons of mass destruction. It is now public knowledge that North Korea is helping Pakistan in the field of missiles and Pakistan is assisting North Korea in the area of nuclear technology, and both are doing this under China’s supervision. Pakistan supplied enrichment technology to North Korea beginning in 1998 in exchange for missiles. Interestingly, both Pakistan and North Korea blackmail the rest of the world and demand international attention and economic assistance, mainly because of their possession of missile-power and nuclear know-how.

So, it is imperative that India and South Korea have close relations to confront the threat from the Pakistan-China-North Korea axis. The China factor is something that India and South Korea have to contend with, as it is the biggest common link between Pakistan and North Korea. Viewed thus, India’s Pakistan policy has implications for South Korea and South Korea’s North Korea policy has implications for India. To go a step further, it is time India’s policy toward the Korean peninsula and South Korea’s policy toward South Asia—India and Pakistan—became mutually reinforcing. This is all the more important as, in the post-Cold War period, there are a number of military and political trends underway that suggest a more genuine Asian balance of power, created and maintained by states within Asia, should be in the making.

Let me point out another area that has vast potentials for bringing India and South Korea all the more together. It is the cooperation in the field of peaceful use of nuclear power. Despite all the recent fears over the danger of nuclear power, South Korea has proved to the outside world how to use nuclear power safely and gainfully. Thirty-two per cent of South Korea’s electricity comes from nuclear source. In fact, Seoul is determined that by 2030, nuclear power accounts for 60 per cent of the country’s total electricity. South Koreans are among the world’s best in constructing and designing nuclear plants. Their technology is constantly improving to provide full-proof safety. In fact, a recent team of IAEA (International Atomic Energy Agency) that had visited the South Korean nuclear plants described them as providing “the highest safety standard in the world”.

Finally a word of caution. The onward Indo-Korean journey may get derailed by the never-ending POSCO controversy, despite the support towards the project from the Odisha government and Prime Minister Manmohan Singh. In fact, not only Korea, the entire world is also looking at the successful completion of the project, because given the quantum of investment and scope, it is going to be a litmus test for India’s commitment to liberalisation and globalisation.

By Prakash Nanda

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