Sunday, October 2nd, 2022 21:19:11

Modi In Korea

Updated: May 23, 2015 11:23 am

Prime Minister Narendra Modi is about to undertake a three-nation trip to China, Mongolia and South Korea. While much is going to be written about the China-leg of the visit, I will like to concentrate on South Korea, officially known as the Republic of Korea (ROK). As it is, ties between India and South Korea have expanded at a healthy pace over the years. In 2009, the two countries concluded a bilateral Comprehensive Economic Partnership Agreement” (CEPA). The bilateral relations were given a further qualitative push in 2010 when the two countries became Strategic Partners.

Over the last 8 years, under India’s Look-East policy (Modi has made it Act East Policy, one has witnessed the top leaders from both the countries visiting each other. Two Indian Presidents Abdul Kalam and Pratibha Singh Patil have visited South Korea and two Korean Presidents Lee Myung-bak and Park Geun-hye have been to India. Former Prime Minister Manmohan Singh had made an eventful visit to South Korea in 2013. Last December, Indian external affairs ministers Sushma Swaraj had undertaken an important visit to Seoul. Before that, the then defence minister A K Antony had also made a trip to South Korea.

These high-level visits have unveiled roadmaps for the overall expansion of political, security, defence, economic, scientific & technological, IT, cultural and people-to-people relations between India and South Korea. In fact, the two countries have also signed in 2010 a Civil Nuclear Energy Cooperation Agreement. There is no doubt that today there is a strong economic foundation of the Indo-Korean relations. CEPA in particular facilitated rapid expansion of trade volume. Bilateral trade in 2011 crossed $ 20.5 billion registering a 70 per cent growth over a two year period. A revised trade target of $40 billion by 2015 was established by the Prime Minister Singh and President Lee on 25 March 2012. But, the global recession has affected the trade, of late. The trade has since declined a bit to $17.57 billion (in 2013) and $18.84 billion (in 2012).

Major Korean conglomerates (Chaebols) such as Samsung, Hyundai Motors and LG have made significant investments in India, estimated at over $3 billion. Indian investments in ROK have already exceeded $2 billion. There are officially 603 large and small Korean firms, which have offices in India. Novelis, a Hindalco subsidiary, acquired a Korean aluminium company by investing about $600 million (Their total investment in ROK is nearing the $2 billion now). Mahindra & Mahindra acquired a majority stake in SsangYong Motors, the country’s 4th largest auto manufacturer, in March 2011, with an investment of about $360 million. India’s Tata Motors acquired Daewoo Commercial Vehicle Company for $102 million in March 2004. Other Indian companies present in Korea include IT majors and Indian banks.

South Korea is now 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 an increased focus on cooperation between small and medium companies of the two countries.

Prime Minister Modi will be in South Korea during May 18-19. He had met Korean President Park Geun-Hye first at Nay Pyi Taw (Myanmar) on November 12 2014 on the margins of the EAS and ASEAN Summit. Though it will be his first visit to Korea as the Prime Minister, Modi had been to that country in 2007 in the capacity of Chief Minister of the state of Gujarat. He had then met many South Korean industry leaders, including POSCO Senior Executive Vice President, Chairman of Korea Technology Investment Corporation and President & CEO of Daewoo International. He had addressed an Investment Promotion Seminar in Seoul. He had also toured the Saemangam Project in Jeollabukdo and Sihwa Tidal Project of Korean Water Resource Corporation. He had travelled to Busan, where he visited to STX Shipbuilding Company and Korea Maritime University.

Going by reports, Modi may focus on three of his pet ideas Smart Cities, Digital India and Swachh Bharat (clean India)—in Korea and ask the Korean companies to invest in these programmes in India within the overall framework of his Make in India” initiative. As it is, his government has already decided to make 100 smart cities in the country, keeping in mind the inevitable expansion of urbanisation in India in days to come. India-based Korean diplomats have high hopes that more than any other country in the world it is South Korea that can be the real partner of Modi in making smart cities. Korean diplomats highlight their remarkable achievement by building a smart city, Songdo, on reclaimed land on the muddy Yellow Sea coast of Incheon. They tout Songdo as the “city of the future” for its incorporation of new technologies and energy-efficient construction, a symbol of Korea’s technological sophistication and also a model for solving the challenges of rapid urbanisation and climate change around the world.

Although largely driven and supported by the Korean government, each of the ongoing initiatives all over Korea to develop smart cities has its own particular local focus and exhibits considerable variation in terms of vision, theme and business models for economic viability, “mix of public and private sector stakeholders and collective funding public (municipalities and central government) and private sector (local Chaebols, e.g. LG Electronics, Korean Telecom (KT), Posco and international involvement in real estate developments, architectural design, and infrastructure development , etc., level of regulation, level of ecological and environmental design considerations, “development—e-cities can be either sites within existing city boundaries or green-field new u-city developments (e-cities), level of integration achieved between sites and their synergy with national strategies for economic development.”

Korean companies like Samsung are also developing smart city technology with an eye toward markets in rapidly urbanising Asia. The Chaebols have been investing heavily in R&D, systems development, promotion (joining government sponsored overseas missions ) and in the e-cities real estate themselves, e.g. building R&D centers, both in Korea and overseas heavily supported by the Korean government and government funding, e.g. $856 million in RFID sensor technology alone! Naturally, Modi’s India is one of their prime targets. Korean diplomats also tell me how Korean companies can also play a huge role in building India’s infrastructure, particularly in rails, roads and shipbuilding.

To me, there is another area that has vast potentials for bringing India and South Korea 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. After all, a 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”.

Of course, there is a word of caution. The onward Indo-Korean journey may suffer a serious setback by the never-ending POSCO controversy, despite the support towards the project from the Odisha government and former 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. All told, though the Modi government is already one year old, the unpalatable truth is that Modi has not yet made India country where foreign investors find it easy to do business.

All this is not to suggest that India-South Korea relations are only about economics. As strategic partners, the two countries 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.

However, 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. And what is most worrisome is the growing linkage between Pakistan and North Korea in the field of developing weapons of mass destruction, particularly in nuclear and missile fields. Besides, there is the China factor that India and South Korea have to contend with. China is the biggest common link between Pakistan and North Korea, not to speak of the growing Chinese belligerence in Asia-Pacific region as a whole, of late.

Therefore, it is all the more important that India and South Korea work towards the creation of a genuine Asian balance of power in the region. Hopefully, Modi’s visit to South Korea will reflect adequate concerns and actions in this regard.

                                                                                                                      By Prakash Nanda

prakashnanda@udayindia.in

Comments are closed here.

Archives

Categories