{"id":2199525,"date":"2022-11-22T09:06:42","date_gmt":"2022-11-22T09:06:42","guid":{"rendered":"https:\/\/www.nknews.org\/koreapro\/?p=2199525"},"modified":"2023-04-05T16:10:56","modified_gmt":"2023-04-05T07:10:56","slug":"saudi-arabian-megaproject-promises-windfall-for-south-korea-but-carries-risks","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2022\/11\/saudi-arabian-megaproject-promises-windfall-for-south-korea-but-carries-risks\/","title":{"rendered":"Saudi Arabian megaproject promises windfall for South Korea but carries risks"},"content":{"rendered":"

For South Korean government officials and businesses, Saudi Crown Prince Mohammed bin Salman\u2019s <\/span>visit<\/span><\/a> last week was like an early Christmas \u2014 and not simply because he <\/span>booked<\/span><\/a> 400 rooms at Lotte Hotel Seoul for two weeks for his entourage, including a $16,449-per-night suite for himself.<\/span><\/p>\n

The visit marked bin Salman\u2019s first to South Korea since 2019, and President Yoon Suk-yeol\u2019s top priority was to seek greater cooperation between Seoul and Riyadh, including Saudia Arabia\u2019s futuristic $500 billion desert city megaproject <\/span>Neom<\/span><\/a>.<\/span><\/p>\n

Riyadh envisions Neom will be <\/span>44 times larger than Seoul<\/span><\/a>, and many South Korean media outlets have voiced hope for a \u201c<\/span>second Middle Eastern boom<\/span><\/a>\u201d akin to Saudi Arabia\u2019s rapid development in the 1970s, which spurred close cooperation between the two countries and helped accelerate South Korea\u2019s own rapid development.<\/span><\/p>\n

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\u2019s 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.<\/span><\/p>\n

\"\"

An illustration of the Neom city project | Image: NEON<\/a><\/p><\/div>\n

MAKING PLANS<\/b><\/p>\n

Bin Salman\u2019s 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.<\/span><\/p>\n

During the meeting, Yoon and bin Salman <\/span>agreed<\/span><\/a> to develop ROK-Saudi bilateral relations into a \u201cfuture-oriented strategic partnership\u201d and establish a \u201cstrategic partnership committee\u201d at the leadership level to promote cooperative projects more systematically.<\/span><\/p>\n

Bin Salman also had <\/span>tea with eight of South Korea\u2019s top business leaders<\/span><\/a>, including Samsung Chairman Lee Jae-yong and the top executives of SK Group, Hyundai Motor Group and Hanhwa Solutions.\u00a0<\/span><\/p>\n

While specifics of the meeting were not publicized, experts speculate the purpose was to <\/span>divvy up the various roles<\/span><\/a> each chaebol would play in bin Salman\u2019s 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.<\/span><\/p>\n

Bin Salman\u2019s 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 <\/span>$30 billion<\/span><\/a>.<\/span><\/p>\n

\"\"

Saudi Arabian Crown Prince Mohammed Bin Salman shakes hands with South Korean President Yoon Suk-yeol on Nov. 17, 2022 | Image: The Presidential Office<\/a><\/p><\/div>\n

COOPERATION BOOM?<\/b><\/p>\n

It is a positive indication of South Korea\u2019s 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\u2019s <\/span>prime minister<\/span><\/a> in September, a post the king usually holds that makes him the de facto ruler of Saudi Arabia.<\/span><\/p>\n

While there are <\/span>many questions about the technical feasibility<\/span><\/a> 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.<\/span><\/p>\n

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.\u00a0<\/span><\/p>\n

Seoul thus cannot ignore the potential multiplier economic effects of participating in the project.<\/span><\/p>\n

If the proposed projects bear fruit, it could potentially end Saudi Arabia\u2019s 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.<\/span><\/p>\n

\"\"

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<\/a><\/p><\/div>\n

THE REPUTATIONAL COST<\/b><\/p>\n

The South Korean government, business leaders and press focused almost entirely on the potential economic upside of bin Salman\u2019s visit, while steadfastly avoiding any mention of the murder of journalist Jamal Khashoggi, Saudia Arabia\u2019s nearly eight-year-long war in Yemen and Riyadh\u2019s <\/span>dismal human rights record<\/span><\/a>.\u00a0<\/span><\/p>\n

After all, bin Salman has reportedly <\/span>yelled at a U.S. official<\/span><\/a> who brought up Khashoggi, and South Korea\u2019s defense industry has <\/span>quietly<\/span><\/a> benefitted<\/span><\/a> from the war in Yemen.<\/span><\/p>\n

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\u2019s soft power is wrapped up with not only <\/span>cultural exports like K-pop<\/span><\/a> but also its status as a supporter of <\/span>liberal institutionalism<\/span><\/a> and one of the few free and developed Asian countries, where human rights and democracy are respected.<\/span><\/p>\n

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.<\/span><\/p>\n

Suppose enough people begin questioning Seoul\u2019s commitment to human rights. In that case, it will take a toll on <\/span>South Korea\u2019s image<\/span><\/a>, which will inevitably have a cascading effect on its soft power and ability to carry out diplomacy.<\/span><\/p>\n

On the other hand, while participating in the project means Yoon\u2019s <\/span>pronouncements about freedom and democracy<\/span><\/a> will continue to ring hollow, it is unlikely that anyone in the South Korean government or corporate world will offer any significant complaint.<\/span><\/p>\n

DESERT PIPEDREAM?<\/b><\/p>\n

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.\u00a0<\/span><\/p>\n

Despite its deep well of oil reserves and financial capital, bin Salman\u2019s 2030 Vision comes with a hefty price tag, which only sustained oil prices can keep afloat. And <\/span>if oil prices fall<\/span><\/a>, 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.<\/span><\/p>\n

At the very least, South Korea can take some reassurance from the fact that bin Salman <\/span>suddenly canceled his visit to Japan<\/span><\/a> without explanation.\u00a0<\/span><\/p>\n

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.\u00a0<\/span><\/p>\n

The report likely boosted the South Korean government and corporations\u2019 confidence and enthusiasm for the proposed deals with Saudi Arabia.<\/span><\/p>\n

Edited by Bryan Betts<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a>Inter-Korean & Foreign Relations<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

For South Korean government officials and businesses, Saudi Crown Prince Mohammed bin Salman\u2019s visit last week was like an early Christmas \u2014 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\u2019s first to South Korea […]<\/p>\n","protected":false},"author":10207,"featured_media":2199529,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[24,28],"class_list":["post-2199525","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-business-economy","tag-inter-korean-foreign-relations"],"yoast_head":"\nSaudi Arabian megaproject promises windfall for South Korea but carries risks - KOREA PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2022\/11\/saudi-arabian-megaproject-promises-windfall-for-south-korea-but-carries-risks\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Saudi Arabian megaproject promises windfall for South Korea but carries risks - KOREA PRO\" \/>\n<meta property=\"og:description\" content=\"For South Korean government officials and businesses, Saudi Crown Prince Mohammed bin Salman\u2019s visit last week was like an early Christmas \u2014 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. 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