For South Korean government officials and businesses, Saudi Crown Prince Mohammed bin Salman’s visit last week was like an early Christmas — and not simply because he booked 400 rooms at Lotte Hotel Seoul for two weeks for his entourage, including a $16,449-per-night suite for himself.

The visit marked bin Salman’s first to South Korea since 2019, and President Yoon Suk-yeol’s top priority was to seek greater cooperation between Seoul and Riyadh, including Saudia Arabia’s futuristic $500 billion desert city megaproject Neom.

Riyadh envisions Neom will be 44 times larger than Seoul, and many South Korean media outlets have voiced hope for a “second Middle Eastern boom” akin to Saudi Arabia’s rapid development in the 1970s, which spurred close cooperation between the two countries and helped accelerate South Korea’s own rapid development.

Even so, this utopian project is far from a sure bet, and working so closely with a country known for systematic human rights violations like Saudi Arabia poses risks to South Korea’s reputation and undermines its pledge to promote freedom and democracy, though it seems few policymakers or business leaders have any qualms about paying this price.

An illustration of the Neom city project | Image: NEON

MAKING PLANS

Bin Salman’s trip to South Korea took place immediately after the G-20 Summit in Bali and lasted only 20 hours. Even so, it was an eventful visit. Aside from the Neom megaproject, his summit with President Yoon also covered defense, renewable energy and tourism and cultural exchanges.

During the meeting, Yoon and bin Salman agreed to develop ROK-Saudi bilateral relations into a “future-oriented strategic partnership” and establish a “strategic partnership committee” at the leadership level to promote cooperative projects more systematically.

Bin Salman also had tea with eight of South Korea’s top business leaders, including Samsung Chairman Lee Jae-yong and the top executives of SK Group, Hyundai Motor Group and Hanhwa Solutions. 

While specifics of the meeting were not publicized, experts speculate the purpose was to divvy up the various roles each chaebol would play in bin Salman’s Neom project. For example, Samsung Group likely sought contract orders for constructing homes and buildings, while Hyundai Motor Group probably hopes to provide robotics and shipping.

Bin Salman’s visit also coincided with the Korea-Saudi Investment Forum, which resulted in South Korean and Saudi companies signing 26 memoranda of understanding (MOUs) to cooperate on clean energy projects, transportation, housing and construction in Neom. The agreements are estimated to be worth around $30 billion.

Saudi Arabian Crown Prince Mohammed Bin Salman shakes hands with South Korean President Yoon Suk-yeol on Nov. 17, 2022 | Image: The Presidential Office

COOPERATION BOOM?

It is a positive indication of South Korea’s global salience that the crown prince visited Seoul personally to meet with Yoon and business leaders. Aside from being the crown prince, bin Salman became Saudi Arabia’s prime minister in September, a post the king usually holds that makes him the de facto ruler of Saudi Arabia.

While there are many questions about the technical feasibility of the Neom city megaproject, it is reasonable to believe that the Saudi government plans to see this project through so long as the prince sustains interest.

According to the plan, Neom city will be a massive Saudi version of Dubai. Bin Salman envisions a 105-mile-long (170 kilometer) city that produces zero carbon emissions and is powered by artificial intelligence. Even if the current vision for the city is too utopian, building even a version of such a city will require massive amounts of time and investment to become a reality. 

Seoul thus cannot ignore the potential multiplier economic effects of participating in the project.

If the proposed projects bear fruit, it could potentially end Saudi Arabia’s overreliance on fossil fuels for its economy and simultaneously provide badly needed relief to global efforts to combat climate change. Not only would it begin a new chapter for Saudi Arabia, it would also provide enormous economic benefits for South Korea and further help it diversify its economy and end its overreliance on China.

South Korean President Yoon Suk-yeol talks with Saudi Arabia’s Crown Prince Mohammed Bin Salman at the Yongsan presidential office on Nov. 17, 2022. | Image: The Presidential Office

THE REPUTATIONAL COST

The South Korean government, business leaders and press focused almost entirely on the potential economic upside of bin Salman’s visit, while steadfastly avoiding any mention of the murder of journalist Jamal Khashoggi, Saudia Arabia’s nearly eight-year-long war in Yemen and Riyadh’s dismal human rights record. 

After all, bin Salman has reportedly yelled at a U.S. official who brought up Khashoggi, and South Korea’s defense industry has quietly benefitted from the war in Yemen.

While it may be understandable to avoid offending bin Salman for the national interest, it could in fact have a negative impact on South Korean soft power. While not an exact science, the ROK’s soft power is wrapped up with not only cultural exports like K-pop but also its status as a supporter of liberal institutionalism and one of the few free and developed Asian countries, where human rights and democracy are respected.

Yet those are not characteristics typically associated with Saudi Arabia. South Korea risks tarnishing its hard-earned image as a free and democratic nation by having such a heavy industrial presence in Saudi Arabia and remaining silent in the face of its human rights abuses.

Suppose enough people begin questioning Seoul’s commitment to human rights. In that case, it will take a toll on South Korea’s image, which will inevitably have a cascading effect on its soft power and ability to carry out diplomacy.

On the other hand, while participating in the project means Yoon’s pronouncements about freedom and democracy will continue to ring hollow, it is unlikely that anyone in the South Korean government or corporate world will offer any significant complaint.

DESERT PIPEDREAM?

Yet as great as the windfall might be for South Korea, these economic benefits remain hypothetical until there are more concrete agreements. Though a good start, MOUs are non-binding, which means that either Saudi Arabia or the ROK could renege on these pleasantries anytime. 

Despite its deep well of oil reserves and financial capital, bin Salman’s 2030 Vision comes with a hefty price tag, which only sustained oil prices can keep afloat. And if oil prices fall, as they very well could due to a global economic slowdown, the Saudi government could find itself unable to afford many of the proposals made in Seoul last week.

At the very least, South Korea can take some reassurance from the fact that bin Salman suddenly canceled his visit to Japan without explanation. 

While Seoul has not taken a public position on the decision, it is hard to imagine that there was not a certain level of glee when news of it broke. Japanese corporations would have made similar offers to participate in the Neom megaproject. 

The report likely boosted the South Korean government and corporations’ confidence and enthusiasm for the proposed deals with Saudi Arabia.

Edited by Bryan Betts