President Yoon Suk Yeol speaks during a private-public sector meeting on follow-up measures for the United Arab Emirates' investment proposal to Korea at Korea International Trade Association in Gangnam District, Seoul, Tuesday. Yonhap

President Yoon says Korea should strive to meet UAE's expectation

By Nam Hyun-woo

President Yoon Suk Yeol said the United Arab Emirates' (UAE) announcement that it will invest $30 billion in Korean companies during his recent state visit to the country is much more than a commitment, noting it is a de facto agreement that can be implemented anytime when innovative business proposals are made.

He further revealed hope that the UAE's generous investment can facilitate a "second Middle East boom" for Korean companies.

Yoon made the remarks during a public-private sector meeting on follow-up measures for the UAE's investment proposal, Tuesday. The Middle Eastern country made the proposal during Yoon's summit with UAE President Sheikh Mohammed bin Zayed Al Nahyan in Abu Dhabi, Jan. 15.

"The biggest achievement of the trip was the $30 billion investment proposal which was agreed upon in the summit and stated in the joint statement," Yoon said. "This is not just an expression of intention for cooperation, but a practical agreement that can be executed promptly like the ones that the UAE signed with the U.K. and France."

The investment is believed to be the largest national-level investment by the UAE, surpassing $12.2 billion with the U.K. and $5 billion with China.

"The UAE, our brother nation, made the decision based on its trust in us, and we should meet their expectation by exploring innovative partnership projects that serve both countries' interests," Yoon said, asking the government to launch an investment cooperation committee and the bolster private-public cooperation network.

The president said both "public and private sectors need to collect their wisdom to bring the second Middle East boom."

The Middle East boom refers to an economic boost that Korea enjoyed in the 1970s and 80s as companies, mostly building developers, won extensive construction orders from Middle Eastern countries. This became a foundation for Korea to overcome economic headwinds stemming from the oil shocks and achieve notable industrial growth.

The presidential office has said that the investment will be the first step toward the new Middle East boom and make a contribution to the country to overcome a range of economic difficulties with exports and overseas market entry.

President Yoon Suk Yeol and his UAE counterpart Sheikh Mohammed bin Zayed Al Nahyan pose for a photo during their summit at the latter's palace in Abu Dhabi, Jan. 15 (local time). Yonhap

This is not the first time for a Korean administration to use the phrase, a second Middle East boom.

During his 2009 visit to the UAE, former President Lee Myung-bak agreed to strengthen Korea's partnership with the Middle Eastern country and stated it would serve as a foundation for a second Middle East boom. Former President Park Geun-hye had a trip to Saudi Arabia, Kuwait, the UAE and Qatar in 2015 and visited Iran in 2016. At the time, Park also promoted $37.1 billion of possible investments from Iran, saying the trips would be an opportunity for Korea to enjoy a second Middle East boom.

However, hopes fell short for another economic boom. Out of 73 memoranda of understanding (MOUs) on energy and resources signed with the Middle East, South America and other countries during Lee's tenure, only 11 resulted in actual business contracts.

MOUs signed with Iran upon Park's visit to the country also did not lead to lucrative business deals, as most of them were non-binding agreements.

Park's successor Moon Jae-in did not rely on the catchphrase, but also signed many MOUs with Middle East countries, including Saudi Arabia. However, out of eight MOUs signed during Saudi Crown Prince Mohammed bin Salman Al Saud's visit to Seoul in 2019, only four led to actual businesses, according to a Chosun Biz report.

President Yoon's remarks on "practical agreement" appeared to be in line with those precedents. A senior presidential office official said that the UAE's promised investment that "will be injected into Korean companies soon with cash, not promissory notes."

To this end, the government decided to establish a "Korea-UAE investment cooperation platform," and provide policies aimed at expediting the Middle Eastern countries' Korea-bound investment as well as tailored support matching the UAE's investment demands.

As part of the efforts, the government is considering holding an investor day event for the UAE's sovereign wealth fund in Abu Dhabi in the second half of this year.