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Egyptian economy poised to become one of region’s most attractive economies: South Korea Ambassador  - Daily News Egypt

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Egyptian economy poised to become one of region’s most attractive economies: South Korea Ambassador 

Egypt plays pivotal role not only in guaranteeing peace and stability in the MENA region but also in supporting constructive peace process on Korean peninsula, says Ambassador Hong 


The year 2021 marks the 26th anniversary of the diplomatic relations between Egypt and South Korea. Every year on 15 August, South Korea celebrates its National Liberation Day, but due to the novel coronavirus (COVID-19) pandemic, the celebration was postponed to 31 October.

On the occasion, Daily News Egypt interviewed South Korea’s Ambassador to Egypt, Hong Jin-wook, to discuss all aspects of the bilateral relations between the two countries. During the interview, Ambassador Hong touched on the ongoing peace process on the Korean Peninsula.

2021 marks the 26th anniversary of the diplomatic relations between Egypt and South Korea, how do Koreans view Egypt, and how do you evaluate the relations? 

We celebrate this year the 26th anniversary of Korea-Egypt diplomatic relations. Although this period is perceived to be relatively short compared to our deep friendship, the two countries have realized substantial development in their relationship over the last quarter-century. Following President Abdel Fattah Al-Sisi’s historic visit to Korea in 2016 and the adoption of the Comprehensive Cooperative Partnership, the two countries have been working to push forward the level of coordination and cooperation at all fronts. This has been demonstrated in the subsequent summit meetings between President Moon and President Al-Sisi on the sideline of the UN General Assembly in September 2018 and the two rounds of phone conversations held last year in March and October. The two leaders shared a close vision and positions concerning many of the regional and international issues, agreeing to continue the regular policy coordination and high-level exchange while upgrading the level of partnership. 

Recently, the Korean Minister of National Defence and the Speaker of the Korean National Assembly visited Egypt in August and October 2021, respectively, reflecting the improved overall bilateral coordination. The Korean government has also selected Egypt as a priority country for Official Development Assistance (ODA) and a key development partner in the MENA region during the period (2021-2025). This would allow more funding to be availed for different cooperation projects in Egypt, increasing thereby the size of our economic cooperation portfolio. Thus, I believe that Korea-Egypt relations represent a good model for the successful partnership, which will be further developed, especially with the expected visit of President Moon Jae-in to Egypt sometime in the near future.

Daily News Egypt interviewed South Korea’s Ambassador to Egypt, Hong Jin-wook, to discuss all aspects of the bilateral relations between the two countries

What are the prospects for cooperation between the two countries in the coming period?

We are currently working on formulating our Country Partnership Strategy (CPS) with Egypt for the coming five years. In coordination with Egypt’s Ministry of International Cooperation, we work on diversifying our cooperation portfolio in line with our two countries’ development priorities. We have common areas of interest in digital transformation and green growth, especially with the announced ‘Korean New Deal’ by President Moon Jae-in in September 2020. The new deal has three main pillars including the integration of digitisation throughout the economy, transition to green infrastructure and stronger support to employment and social safety nets. Other areas of interest include cooperation in the health sector, desalination and water resource management.

So far, our cooperation portfolio is worth a total of $473m in areas including education, information technology, and transportation. Two projects are expected to be completed next year related to the automation of the Egyptian Patent Office and the Beni Suef Technological University, with contributions from the Korean government of around $2.9m and $5.83m, respectively. In addition, there are ongoing ODA grants worth around $1.9m for the finance of a feasibility study for municipal solid waste management in Korimate; devising the master-plan for the intelligent transportation system in Alexandria governorate; and developing handcrafts hubs to help create job opportunities for youth and women, contributing thereby to ‘the Decent Life’ Initiative and projects. Furthermore, there are consultations with the Ministry of Finance to introduce the Korean e-procurement system as part of Egypt’s endeavours to improve public finance management.

What are the latest developments of economic partnership agreement talks between Egypt and South Korea?

We are in close coordination with the Ministry of Trade and Industry, with several technical discussions being held between the Korean and Egyptian counterparts, the latest was in March 2021. The proposed MoU has been upgraded from merely a feasibility study on a possible Free Trade Agreement to a broader trade and economic partnership agreement between the two countries. The agreement will not only seek to eliminate existing trade barriers but also works on promoting industrial development and investment on both sides, such as designating industrial zones and carrying out supply chain cooperation. The Korean Minister of Trade and the Egyptian Trade Minister Nevine Gamea had a virtual meeting earlier last September and their discussions tackled this fruitful cooperation, suggesting the launch of the feasibility studies soon and accelerating the pace of negotiations.

Could you reveal the trade exchange volume between Egypt and Korea during the third quarter (Q3) of 2021?

Although Egypt is Korea’s largest export market in Africa, the trade volume is far below the two countries’ potentials. The outbreak of the global pandemic has cast a shadow on our bilateral trade exchange last year, decreasing the trade volume by around 16%. However, there are signs of a bounce-back from COVID-19 induced slow-down. Figures for the first half of 2021 show an increase in the volume of bilateral trade by 32.2%, amounting to $1.051bn, compared to $795.6m during the same period in 2020. We are working to diversify the structure of our trade to include more items that each of our two countries has a relative competitive advantage. For instance, the Egyptian side seeks to open up new markets for their exports of the carpet industry, furniture, building materials, and chemical products to access the Korean market. Similarly, Egypt can benefit from Korea’s technology and expertise in high tech products including semiconductors and electronic chips, and hydropower industries. Both countries can also work together to connect to other markets in Asia, Africa and Europe utilising Egypt as a hub for Korean exports. 

 

Can you elaborate on Korean participation in major projects such as the Suez Canal Economic Zone (SCZONE) and the New Administrative Capital? 

We have a strong interest in opening up new avenues for our collaboration. For that reason, I visited the Suez Canal Economic Zone (SCZone), East Port Said industrial zone, and the New Administrative Capital to explore the opportunities available for Korean investors and businesses in Egypt. I believe these areas are promising for more Korean presence in different fields including shipyards for ship repair and an industrial zone. Also, there are advanced negotiations between Hyundai Rotem and the National Egyptian Railway Industries Company (NERIC) over the local manufacturing of railcars in a new factory in East Port Said, as part of the SCZone, with investments exceeding $1bn. 

As for the New Administrative Capital, we are keen to share our expertise in smart cities’ development and sustainable urban planning. We have also concluded a memorandum of understanding between the Korea Advanced Institute for Science and Technology (KAIST) and the National Training Academy (NTA) for establishing a KAIST branch in Egypt’s New Administrative Capital.

 

What is the volume of South Korean foreign direct investments in Egypt? And in which sectors are those investments focused? 

Korea considers Egypt its main investment destination in Africa and the Middle East region. The volume of Korean investments in Egypt amounts to $800m in 2020 with more than 170 companies operating in Egypt, of which 33 are major companies covering a wide spectrum of sectors including electronics, transportation, energy, textile, construction, and services. These companies contribute to the Egyptian economy with exports, job creation, and technology transfer. 

We have several new investment expansions for Korean companies including Samsung Electronics, which contracted with the Ministry of ICT in March 2021 to localize the tablet industry with investments of around $30m. Moreover, there is a presence for Korean companies in other sectors including; Korean company JST working in the field of solid waste conversion technology to alternative fuels instead of coal for cement plants; and Doosan Heavy Industries & Construction which is one of the leading providers of seawater desalination solutions and is keen to share its expertise with the Egyptian government and take part in upcoming desalination projects in Egypt.

 

How do Korean companies view the current economic developments and investment opportunities in Egypt? What challenges do they face in Egypt?

We are following up with admiration for the developments in the Egyptian economy which poised to become one of the most attractive economies in the region. Capitalising on Egypt’s reform measures and its sound economic performance, many Korean companies see Egypt as the base through which they can access markets in Africa, the Middle East and Europe. It is true that the smooth business and operation of Korean companies already existing in Egypt strongly influence the investment decision of other Korean companies. For that reason, we hold regular dialogues with our friends in the Egyptian government to ease all obstacles facing Korean companies and promote a better understanding of newly introduced legislation and policies. Earlier in June, the Embassy organised a forum on the Egyptian governments’ new customs and tax reform measures, particularly the Advanced Cargo Information System ACI and the e-invoicing. Similarly, we held another webinar on the Egyptian medical and pharmaceutical market in September, during which the Korean companies were briefed on the regulations for advancing into the Egyptian medical sector. Such open dialogue with investors help not only address existing challenges but also gives confidence in the Egyptian market and will eventually help lure more Korean investments to Egypt.

Korea is an advanced country in technology, especially agricultural technology and is cooperating with African countries in this sector. What are the opportunities for cooperation between Egypt and Korea in this field?

KAFACI (Korea-Africa Food and Agriculture Cooperation Initiative) is an inter-governmental cooperation initiative launched in 2010 with the participation of around 23 African countries. The initiative aims at achieving sustainable agriculture while sharing expertise and knowledge on agriculture technology. Any African country can be a partner member, however, Egypt is not currently a member of the initiative, which indeed will be a good opportunity to advance Korea-Egypt agriculture cooperation. Within this initiative, the two countries can cooperate in developing technologies for the production of food and agriculture products; advance mechanisms towards a sustainable agricultural environment and resource conservation including water resource management; and capacity building and technology transfer for the development of agriculture and food industries.

How many Korean tourists visited Egypt during the first nine months of 2021?

The number of Korean tourists had been on a steady increase before the COVID-19 pandemic. In 2019, more than 32,000 Koreans visited Egypt. However, due to the COVID-19 pandemic, the number of Korean tourists who visited Egypt dropped to approximately 13,000 in 2020. The number has still not returned to the pre-pandemic level. As Korea’s vaccination rate now exceeds 70% as of 25 October 2021, it is expected that the number of Korean tourists in Egypt would increase soon.

Could you tell us about Korean foreign policy stance towards the current Middle East issues, such as the situations in Syria, Libya, and Sudan?

Our foreign policy is oriented on the importance of maintaining peace and prosperity in the Middle East region. For that, we highly appreciate the pivotal role played by Egypt in supporting a peaceful and comprehensive political solution to the conflicts in the region, which preserves the sovereignty of the relevant states and reflects the legitimate aspirations of its people. 

 

Does South Korea intend to mediate between Egypt, Sudan, and Ethiopia to resolve the Nile dam dispute?

The Korean government is aware of the special importance that Egypt attaches to the dam issue. Thus, we hope that all parties engage with a sincere will in negotiations to reach a peaceful resolution to the outstanding issues based on mutual respect and cooperation reflecting the wishes of the three concerned.

Are there any developments in the negotiations between North and South Korea to reach a peace agreement, especially after Trump’s departure?

The Korean government has been making relentless efforts towards achieving peace and denuclearisation of the Korean Peninsula. We worked on resuming dialogue by holding three inter-Korean summits and mediating two summits between the United States and North Korea. 

Clearly, some obstacles still remain in the face of negotiations, nevertheless, we will continue our steady steps to build a lasting peace on the Korean Peninsula. In this vein, our President Moon Jae-in emphasised again in a speech at the United Nations last month that the declaration of the end-of-war on the Korean Peninsula is needed to formally end the Korean War. The two Koreas technically remain in a state of war, as the Korean War(1950-53) ended with an armistice rather than a peace treaty

For that, we count on the role and support of the friends from the international community, including Egypt, which we believe has a pivotal role not only in guaranteeing peace and stability in the MENA region but also in supporting the constructive peace process on the Korean peninsula.

 

Quotes:-

As Korea’s vaccination rate now exceeds 70% as of 25 October 2021, it is expected that the number of Korean tourists in Egypt would increase soon.

Trade exchange between Egypt, Korea for the first half of 2021 increased by 32.2% to $1.051bn, compared to $795.6m during the same period in 2020.

Korea is currently working on formulating Country Partnership Strategy (CPS) with Egypt for the coming five years.

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