{"id":2202248,"date":"2023-09-14T18:07:10","date_gmt":"2023-09-14T09:07:10","guid":{"rendered":"https:\/\/koreapro.org\/?p=2202248"},"modified":"2023-09-15T12:20:10","modified_gmt":"2023-09-15T03:20:10","slug":"south-korea-and-uzbekistan-put-money-troubles-aside-to-focus-on-developing-ties","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/09\/south-korea-and-uzbekistan-put-money-troubles-aside-to-focus-on-developing-ties\/","title":{"rendered":"South Korea and Uzbekistan put money troubles aside to focus on developing ties"},"content":{"rendered":"

South Korea\u2019s finance ministry came to an agreement with Uzbekistan last Friday on settling an outstanding payment of some $1 billion related to a joint gas project.\u00a0<\/span><\/p>\n

The announcement came after ROK finance minister Choo Kyung-ho visited the country last week to meet his counterpart, building on a decadeslong relationship between the two countries.\u00a0<\/span><\/p>\n

While South Korea\u2019s finance ministry did not release any details on what the agreement entails, the high-level meeting reflects both sides\u2019 willingness to continue developing their partnership in various areas.\u00a0<\/span><\/p>\n

The Uz-Kor Gas Chemical joint venture was <\/span>launched in 2016<\/span><\/a> and the billion-dollar debt belongs to Uzbekistan’s state-owned gas company after unspecified foreign exchange issues led to payment delays.<\/span><\/p>\n

Now that this issue has been resolved, South Korea and Uzbekistan can continue to deepen their relationship, <\/span>according to minister Choo<\/span><\/a>.\u00a0<\/span><\/p>\n

A LONG RELATIONSHIP<\/b><\/p>\n

South Korea and Uzbekistan formally established <\/span>diplomatic relations in 1992<\/span><\/a>, followed by the formation of a <\/span>strategic partnership in 2006<\/span><\/a>.\u00a0<\/span><\/p>\n

In August this year, defense minister Lee Jong-sup became the highest-ranking South Korean defense official to visit <\/span>Tashkent<\/span><\/a>. He and his Uzbek counterpart agreed to \u201celevate cooperation in defense and the arms industry based on a bilateral \u201cspecial partnership\u201d and \u201chistorical and cultural bonds,\u201d according to the South Korean ministry.<\/span><\/p>\n

The two countries have a mutual interest in each other. Uzbekistan is rich in resources, particularly in energy. Korean interest is directed at the joint implementation of projects in the oil, gas and chemical industries. With an <\/span>annual production<\/span><\/a> of 2.7 million metric tons of crude oil and 51 billion cubic meters of natural gas, Uzbekistan is an attractive destination for foreign investors.<\/span><\/p>\n

South Korea\u2019s experience of an economic boom is particularly valuable for Uzbekistan, which hopes to carry out necessary reforms to accelerate socio-economic development, Mirzokhid Rakhimov, a contemporary historian at the Uzbek Academy of Sciences, wrote in a paper <\/span>published<\/span><\/a> last month.<\/span><\/p>\n

Above economic interest, the two countries have long shared a close relationship, as depicted <\/span>by the frescoes featuring Korean envoys<\/span><\/a> in the historic Uzbek city of Samarkand.\u00a0<\/span><\/p>\n

In the 20th century, the Soviet Union forcibly relocated many ethnic Koreans in its border regions to Central Asia, and today, <\/span>some 200,000 people with Korean heritage<\/span><\/a> live in Uzbekistan.<\/span><\/p>\n

In 1991<\/span><\/a>, South Korea was one of the first Asian countries to recognize Uzbekistan\u2019s independence, and from the year after, Uzbek and South Korean heads of state have met 16 times in addition to ministerial visits. This relationship goes beyond mere dialogue, taking a new turn in 2013 under the impetus of then-South Korean President Park Geun-hye and her “<\/span>Eurasia Initiative<\/span><\/a>.”<\/span><\/p>\n

\u201cThe main idea of the initiative was to connect South Korea with the countries of Eurasia through building a single and unified system of transport, energy and trade networks,\u201d Rakhimov wrote.<\/span><\/p>\n

\"\"

South Korean Minister of Foreign Affairs Park Jin with Minister of Foreign Affairs of Uzbekistan Bakhtiyor Saidov at the first strategic talks between the two nations on Sept. 11, 2023 | Image: ROK Ministry of Foreign Affairs<\/a><\/em><\/p><\/div>\n

EMERGING ECONOMY<\/b><\/p>\n

Today, South Korea’s main objective in the Central Asian state is to support Uzbekistan in its bid to join the World Trade Organization (WTO).\u00a0<\/span><\/p>\n

Previous finance minister Hong Nam-ki visited Tashkent in 2020 for that specific reason, and the permanent Korean representative to the United Nations, Yun Seong-deok, is the chairman of the Uzbek <\/span>working group<\/span><\/a> set up to integrate the organization.<\/span><\/p>\n

Tashkent first submitted its application in 1994. According to a paper <\/span>published<\/span><\/a> in 2018 by Jamshid Normatov, a researcher at the University of World Economy and Diplomacy in Tashkent, the process was delayed by doubts about the benefits of joining the organization.\u00a0<\/span><\/p>\n

Since 2016, however, the country has made significant progress in complying with WTO regulations.<\/span><\/p>\n

While there is some risk in liberalizing the economy, \u201cWTO accession is likely to produce higher gains for Uzbekistan than it did for other former Soviet Union states,\u201d according to Normatov.\u00a0<\/span><\/p>\n

Indeed, its industry is growing rapidly.<\/span> With the assistance of Seoul, Uzbekistan has begun producing cars and high-tech products in the textile and electrical industries. Founded through a Korean<\/span> partnership<\/span><\/a>, the automotive industry is now one of the leading sectors in Uzbekistan’s economy.\u00a0<\/span><\/p>\n

South Korea is the fifth-biggest investor in Uzbekistan, with almost <\/span>$137 million<\/span><\/a> allocated in 2021. Tashkent accounts for <\/span>two-thirds<\/span><\/a> of Korean investment in the region, and some 75 Korean companies are operating<\/span>\u00a0in the country.<\/span><\/p>\n

\u201cHowever, despite some positive developments, the level of economic cooperation between Korea and Central Asia does not correspond to the existing potential and capabilities of partners,\u201d Rakhimov writes in his paper. Both countries can benefit from investing in long-term development programs, he added.<\/span><\/p>\n

INTERNATIONAL COMPETITION<\/b><\/p>\n

Uzbekistan occupies a geostrategic position. Historically situated on the Silk Road between Asia and Europe, the region has long been an important commercial and cultural crossroads.\u00a0<\/span><\/p>\n

As a result, South Korea is not the only country interested in Uzbekistan as a trade corridor. China is one of the main players in the region with its Belt and Road Initiative, which aims, among other things, to create a “new Silk Road” to Europe. Since 2015, Tashkent has been participating in this Chinese project mainly for infrastructure development, such as its <\/span>railroad<\/span><\/a>.<\/span><\/p>\n

\u201cThe lack of direct land transport links with Korea is affecting trade,\u201d Rakhimov wrote.<\/span><\/p>\n

\u201cThe revival of the Silk Road with the restoration of direct railway and road connections will not only reduce the distance and time of delivery but also reduce the financial costs of logistics.\u201d<\/span><\/p>\n

Another challenge is education. If Korea significantly boosts <\/span>investment<\/span><\/a> to develop high-tech industry and even the digital economy, these sectors demand qualified specialists.\u00a0<\/span><\/p>\n

Inha University <\/span>and other higher learning institutions<\/span><\/a> have <\/span>opened branches<\/span><\/a> in Uzbekistan, and the number of Uzbek exchange students in South Korea has also been growing steadily, rising from 300 in 2010 to almost 4,700 in 2019.<\/span><\/p>\n

But more needs to be done on education, Rakhimov wrote.\u00a0<\/span><\/p>\n

“It is necessary to enlarge strong educational partnerships, academic cooperation, and joint projects between Korea and Central Asia.\u201d<\/span><\/p>\n

Whether in strategic, economic or academic partnerships, the relationship between South Korea and Uzbekistan has deepened enormously in recent decades. The combined amount of trade between South Korea and Uzbekistan came to $2.21 billion in 2022, soaring from just $3 million tallied in 1992.<\/span><\/p>\n

Uzbekistan will send an economic delegation to South Korea for a business forum later this week, which is expected to help further their economic and industry ties parallel to a <\/span>recently signed<\/span> Trade and Investment Promotion Framework (TIPF<\/span><\/a>)<\/span>.<\/span><\/p>\n

Edited by Alannah Hill and Arius Derr<\/span><\/i><\/p>\n

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

South Korea\u2019s finance ministry came to an agreement with Uzbekistan last Friday on settling an outstanding payment of some $1 billion related to a joint gas project.\u00a0 The announcement came after ROK finance minister Choo Kyung-ho visited the country last week to meet his counterpart, building on a decadeslong relationship between the two countries.\u00a0 While […]<\/p>\n","protected":false},"author":10909,"featured_media":2202252,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[24,28],"class_list":["post-2202248","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-business-economy","tag-inter-korean-foreign-relations"],"yoast_head":"\nSouth Korea and Uzbekistan put money troubles aside to focus on developing ties - 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\/2023\/09\/south-korea-and-uzbekistan-put-money-troubles-aside-to-focus-on-developing-ties\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Korea and Uzbekistan put money troubles aside to focus on developing ties - 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