In March 2016, Egypt’s President Abdel al-Sisi travelled to South Korea, the place he signed a complete partnership settlement that aimed to broaden the scope of cooperation between the 2 nations, notably on commerce and navy issues.
In flip, South Korea’s then-president, Moon Jae-in, was obtained in Cairo throughout his tour of the Gulf and North Africa in January 2022, and the 2 presidents signed a number of memorandums of understanding MoUs that demonstrated how far the connection had progressed in six years. These included a $1bn deal on “monetary cooperation”, with Seoul additionally providing a whole bunch of thousands and thousands of {dollars} in loans and grants.
Final 12 months, commerce between South Korea and Egypt surpassed $3bn, with Egyptian exports to Seoul reaching an all-time excessive of $1.69bn – a rise of over 160% in comparison with the 12 months earlier than. In accordance with the Export-Import Financial institution of Korea, as of 2022, South Korea had made cumulative investments of slightly below $800m in Egypt. However what explains the elevated political and financial significance each nations are attaching to a relationship that continues to develop in scope, depth, and geopolitical significance?
Studying from Korea’s financial miracle
Egyptian officers have steered that it sees South Korea, which developed quickly within the years after the conclusion of the Korean Warfare in 1953, as an inspiration for its personal potential improvement. Within the early Nineteen Sixties, successive South Korean governments determined to make use of a budget labour out there within the nation as a aggressive benefit for the manufacturing of low cost items for export.
With the help of improvement finance offered by the Worldwide Financial Fund (IMF) and World Financial institution, South Korea turn into a world hub in manufacturing, electronics, and different merchandise destined for export in a course of dubbed the “Miracle on the Han River”. The World Financial institution has noted that South Korea “is without doubt one of the few nations that has efficiently reworked itself from a low-income to a high-income financial system and world chief in innovation and know-how.”
Some have implied that Egypt could possibly be trying to observe this instance. In a current assembly with the South Korean ambassador to Cairo, Kim Yong-hyun, Egyptian finance minister Mohamed Maait emphasised the significance of South Korean investments in Egypt for exciting improvement. Hany Selim, the Egyptian ambassador to Seoul, has talked enthusiastically of bringing South-Korean impressed tasks to Egypt.
For its half, Seoul has appeared keen to help within the activity of selling Egyptian improvement. In June this 12 months, South Korea’s Financial Growth Cooperation Fund (EDCF) signed a cope with Egypt’s Ministry of Worldwide Cooperation that can see the South Korean authorities present $460m in direction of the manufacturing of metro trains in Cairo. In April, the 2 governments signed an MoU to reinforce customs cooperation, make commerce between the nations simpler, and improve Egypt’s export market. In 2022, the South Korean authorities designated Egypt as an Official Growth Help (ODA) Precedence Accomplice.
South Korea has an curiosity in encouraging stronger and extra resilient Egyptian trade for a number of causes. On the financial entrance, stronger ties between Seoul and Cairo have seen South Korean corporations safe main manufacturing contracts within the North African nation. Final August, Korea Hydro & Nuclear Energy Firm, a subsidiary of Korea Electrical Energy Company, by which the federal government owns a majority stake, received a $2.5bn contract to assemble Egypt’s first nuclear energy plant. In August, South Korean large Samsung obtained a “golden licence” from the Egyptian authorities to ascertain a cell phone manufacturing manufacturing facility in Beni Suef.
South Korea sees Egypt as its gateway to markets throughout the Center East and North Africa. Hong Jin-Wook, one of many nation’s former ambassadors to Egypt, mentioned earlier this 12 months that “we anticipate Korean corporations to actively take part in exporting from Egypt because the hub to neighbour nations by way of the African Free Commerce Settlement (AfCFTA).”
In accordance with Alon Levkowitz, a lecturer in Asian Research at Bar-Ilan College in Tel Aviv, these financial developments might have essential geopolitical implications. He believes that South Korea might play an essential position in “stabilising the financial system by selling and constructing tasks that can supply work for Egyptians.”
He tells African Enterprise that “South Korea is a ‘center energy’ state… it declares that it doesn’t have any imperialist agenda, because the superpowers have, nor does it have any hidden agendas that can erupt as soon as it begins doing enterprise. Seoul tries to maintain a impartial coverage within the Center East, so as to not be seen as tilting in direction of one aspect.” A higher position for a “impartial” energy in Egypt might assist convey much-needed stability in a rustic that has typically been the location of geopolitical competitors between nice powers.
Safety ramifications
Egypt’s pivot in direction of South Korea can be an essential improvement for Seoul as a result of Cairo has historically had heat relations with its belligerent neighbour, North Korea.
“These relations stem from the Suez Disaster in 1956, when North Korea expressed solidarity with Nasser’s resolution to nationalise the Suez Canal,” Edward Howell, a lecturer in Korean politics on the College of Oxford, tells African Enterprise. “Each states additionally engaged in mutual trade of Scud ballistic missiles within the Nineteen Eighties and Nineties. Egypt has additionally been complicit in serving to North Korea evade United Nations Safety Council sanctions, permitting North Korea to export weapons to Africa by way of Egyptian ports.
“Though Egypt reportedly reduce navy ties with North Korea in 2017, the significance of historical past can’t be underestimated. Egyptian telecommunications firm, Orascom, has within the final twenty years been instrumental in collaborating with a North Korean telecommunications firm to function North Korea’s solely 3G cellular phone service.”
Better ties between Seoul and Cairo due to this fact have essential safety ramifications in East Asia and will assist additional South Korea’s makes an attempt to isolate its major adversary diplomatically, economically, and militarily. Certainly, in February final 12 months, the Egyptian armed forces signed two MOUs with their South Korean counterparts to additional navy cooperation. South Korean firm Hanwha additionally secured a deal to fabricate K9 howitzers for Egypt. On wider overseas coverage, President Sisi has additionally pledged to make sure that “we coordinate the 2 nations’ positions in numerous worldwide boards.”
Mutual advantages
The ever-closer relationship between South Korea and Egypt is a extremely vital one for each nations. Seoul is battling to keep away from an period of financial stagnation amidst sluggish financial progress, sinking exports, and an getting old inhabitants. Opening entry to fast-growing markets in North Africa is a crucial a part of the federal government’s technique to revitalise the South Korean financial system and rejuvenate the nation’s exporters.
For Egypt, which can be dealing with severe financial challenges, robust relations with a world financial energy might hardly be extra welcome. Quickly rising exports to South Korea could possibly be a very essential supply of the overseas trade which the nation so desperately wants.
There’s, nonetheless, house for a quickly rising relationship to develop sooner nonetheless. Since January 2022, South Korea and Egypt have been conducting joint feasibility research on how a bilateral free commerce settlement might work, in what could be Seoul’s first commerce cope with an African nation. Egyptian politicians have steered such a transfer might see enterprise between the 2 nations double.
Whereas it stays to be seen whether or not this deal will come to cross, Seoul and Cairo each say they continue to be dedicated to deepening ties throughout the board.
Supply: african.business
