Kazakh's and
Koreans can surely feel associated to each
other. It is said that the Kazakhs and Koreans
share common ancestors that lived in the mountains
of Altai. And, Korean and Kazakh languages
even form part of the same language group.
With these links in mind, could you give our
readers a brief history and development of
South Korea-Kazakhstan Diplomatic Relations?
In respect of the historical link between
Korea and Central Asia, you are right. We
speak the Korean language, which belongs
to a certain group of languages. It is very
different from European languages. And we
share a kind of very distinctive cultural
features, including some elements of shamanism.
Still certain aspects of shamanism are a
strong thing for us, on our mind and perception
of the world. I find it pretty interesting.
Many Koreans are born with Mongolian spots,
like the people of Kazakhstan, or the American
Indian. We think we are originated from
Central Asia via Siberia and Mongolia and
we moved to the Korean peninsular, which
has a border with China.
And I reckon all that you have mentioned
above makes diplomatic relations with Kazakhstan
quite special.
Sure, yes. In December 1991 Kazakhstan
became independent. It happened a bit later
that we established diplomatic relations.
It was January 1992 that the Republic of
Korea and the republic of Kazakhstan established
diplomatic relations. And one and a half
years later Korean embassy has been opened.
Korea and Kazakhstan share same ideals for
democracy and for peace and prosperity.
The two countries are actively engaged with
each other for the strengthening of cooperation
on the basis of mutually beneficial partnership.
Korea supports Kazakhstani efforts to bring
about regional peace and stability. Kazakhstan
supports the peaceful unification of South
Korea and North Korea by means of increased
contacts and exchanges In short, South Korea
and Kazakhstan have excellent cooperative
relations.
In fact Korea was the first foreign country
to begin investments in Kazakhstan. Unfortunately,
Korea underwent a financial crisis in 1997.
Since then Korean investments were kind
of dwindling. But now it is five years since
the financial crisis, the Asian financial
crisis, as well as Russian crisis in 1998.
Korean business circles' investment interest
in Kazakhstan is growing. In fact, we opened
the Korea Trader and Investment Promotion
Agency's representative office in Almaty
last October. It is the Agency's first official
office to be opened since 1997.
In the long term, we believe that the South-North
Korean railway system will be reconnected
bringing South Korea into link with Central
Asia via Siberia and China When this link
is realized economic and trade relations
between Korea and Kazakhstan will enter
into a new dimension. In this stage, Japan
will also be brought into a closer link
with the new iron silk-road.
Now in today's world there is an increasing
amount of multilateral and bilateral trading
blocks that are making the world economically
turn around. Could you name to our readers
the specific trade agreements that you have
signed with Kazakhstan?
Korea and Kazakhstan signed the current
trade agreement in July 1992, a year before
the opening of the Korean embassy in Almaty.
South Korea was virtually the first foreign
country to actively explore trade relations
and investment opportunities in the newly
independent Republic of Kazakhstan. Two-way
trade volumes in 1993 amounted to US$88
million and grew to US$230 million in 1996.
Up to 1997, Korea was the second largest
investor behind the USA, but Korea investments
were more diversified.
After the trade agreement the following
agreements signed between Korea and Kazakhstan
- the Science and Technology Cooperation
Agreement in 1995, the Cultural Agreement
in the same year, the Investment Promotion
and Protection Agreement in 1996, the Double
Taxation Avoidance Convention in 1997 and
the Economic Developent Cooperation Fund
Loan Agreement in 1999.
Obviously, these legal instruments provided
a sort of basic guarantee for our businessmen
to invest and to trade.
If my information is correct there are
one hundred thousand ethnic Koreans living
in Kazakhstan. And you have companies like
SAMSUNG, LG Electronics, DAEWOO and USKO.
Would you indicate to our readers some of
the major investments in the Kazakh economy
and how successful are they being now?
Two cases are highly significant. One is
Samsung investment in cooper mining and
refinery business. In 1995 Samsung made
initial investment of about two hundred
fifty million US dollars to modernize the
KazakhMys, the then almost bankrupted Kazakh
state company. Samsung gained forty two
percent of the state company's share. And
Samsung also was entrusted to manage this
company for five years, from 1995 to 2000.
Within a couple of years KazakhMys has become
one of the best performing companies in
Kazakhstan, employing directly about almost
sixty thousands workers. Kazakhstan underwent
serious economic difficulty in the latter
part of 1990s, but Samsung has never fired
worker in the KazakhMys. The company once
earned more than ten percent of the total
export revenue of Kazakhstan. The company
is now in excellent shape in terms of financial
position as well as managerial skills in
order to diversify in other related area.
And the other case of Korean investments here
in Kazakhstan is LG Electronics investment
in 1997. It established a local company LG
Electronics Almaty Kazakhstan, wholly owned
by LG. Currently, it employs three hundred
workers. It has assembling line of color TV
sets with the annual production capacity of
four hundred of thousands. Annually, about
forty percent of their product is exported
to Russia and other Central Asian countries.
And it has another assembly line of washing
machines with annual capacity of fifty thousands.
|
Recently, a
seven-member survey team composed of government
and private sector experts from a consortium
of the Korea Oil Corporation, Samsung Mulsan,
SK, LG and Daesung, visited Kazakhstan for
a week to explore the possibility of Korean
participation in oil exploration projects
in the Caspian Sea. What can we conclude from
this visit?
You are right, last April the delegation
came to Kazakhstan. In fact, in 1997 a similar
consortium was formed to invest to oil and
gas sector in Kazakhstan. But Korea was
involved in financial crisis and the project
was postponed. Now, let me say, having overcome
the financial crisis, Korean companies are
showing interest in investing in oil and
gas sectors. But since the business involves
huge amounts of investments, Korean companies
are moving cautiously. But certainly, they
are interested in oil and gas sector in
Kazakhstan.
Because Korea intends to diversify its
oil imports slightly away from the Middle
East towards Central Asia, can I understand
from this recent attention that in this
sense Kazakhstan plays a very important
role in Korean economy?
Sure, very important. Korea is, I may recall,
the sixth largest oil consuming country.
Last year we imported oil for over two billion
US dollar. Korea is relying one hundred
percent of its oil requirements on import.
We must secure a stable source of supply.
We cannot rely solely upon the Middle East.
Though Caspian area is very remote from
Korean peninsular, we have still a remote
possibility of constructing pipeline to
connect East Asia and Caspian region. But
we believe, oil is now a very easily swapped
commodity in the world market. Even if Kazakhstani
oil is not to be directly supplied to the
Korean market, the Korean companies' position
will be strengthened if they have share
in production in the Caspian area.
When Korean companies look at the target
market, of course their eyes are first set
on the oil industry. Oil makes Kazakhstan
interesting to the Korean companies. However,
I can imagine that there must also be some
other qualities of the Kazakh market that
make Kazakhstan so interesting for Korean
companies. Could you highlight a couple
of those advantages that you see here and
that you would like to highlight to Korean
investors?
If we see from the up front prospective,
not specifically for Korean investors, we
can say that Kazakh market is roughly segmented
in two areas. One is oil and gas. Since
Kazakhstan has rich oil and gas deposits
obviously oil and gas related sectors have
a huge potential. Though Korea has no world-class
oil major, it has excellent industrial capabilities
in such areas as shipbuilding, manufacturing
of steel pipe and steel structures, etc,
which have wide application with oil and
gas development.
And the other segment is small and medium
business. In fact when a country relies
heavily on the massive revenue from natural
resources, its industrial structure may
be threatened, because the revenue from
oil and natural resources tends to raise
wage levels higher and the national currency
stronger than what might otherwise be realised
jacking up production costs and undermining
competitiveness of other non-resource based
industries. That is the clear risk, if Kazakhstan
makes the strategy to rely too heavily on
oil.
But I find Kazakh leadership is very aware
of that risk. And, hence, they are very
eager to promote small and medium sized
enterprises with the view to promoting employment
and investments to the other sectors apart
from natural resources. So, I believe the
Kazakh government will follow balanced industrial
policies to induce and then to hold the
investments even in medium and small business
sectors.
Natural resources, agriculture and food
processing have significant potential. In
view of Almaty's advantageous location as
the most important commercial centre in
Central Asia, retailing industry has been
on the priority list for many years. Furthermore,
telecommunications and information technologies
are also potential areas for foreign investment.
With huge territory and low density of population,
Kazakhstan simply needs to be connected.
I believe Korea has extensive industrial
capability in the area of agriculture, manufacturing,
and information technologies. In fact Korea
is one of the key countries capable of providing
IT technologies and its business mode. Korea
and Kazakhstan can develop complimentary
economic relations.
Our readers are international business
and also political elite and community.
With this in mind could I ask you to highlight
briefly your own personal career and also
how do your previous experiences abroad
compare to your current position in Kazakhstan?
I served twice in the UK. I served once
in the middle of 1970s. I experienced change
of the government from the Labour to the
Conservative. And another assignment was
in late 1990s, and I experienced the change
of government from the Conservative to the
Labour. I served in Czechoslovakia in early
1990s. I experienced tremendous changes,
reforms and transformations. I am convinced
that Kazakhstan has been following quite
balanced strategies for market reform and
economic development.
Thus far you have been very positive
about the future of Kazakh and Korean relations.
With this in mind, what is your final message
to our readers?
Yes, I have very positive view of Kazakhstan's
future. Kazakhstan has very significant
achievement in the past ten years in terms
of political and economic development consolidating
firmly the state's foundation. The country
has succeeded in promoting multi-ethnic
harmony and cultural and religious diversity
attaining remarkable openness of its society.
I believe that Kazakhstan will make another
visible stride of development in the coming
decade.
In the light of the geo-political location
of Kazakhstan connecting the north-south
corridor from Russia to the Indian Ocean
and the east-west corridor connecting East
Asia and Europe, the Republic's stability
and prosperity is critically important to
the peace and stability of the whole world.
I believe that Kazakhstan has, thus, played
a crucial role stabilising the regional
situation after the breakdown of the Soviet
Union. And the Kazakhstani leadership has
consistently shown willingness to take up
leading role for regional confidence-building
and cooperation.
In Kazakhstan there are growing general awareness
of the value of market economy, democracy,
the basic institutions and due political process
to attain it. NGOs´ activities are growing
and are more evident. I am fully confident
that in the coming decade Kazakhstan will
emerge to be a regional power in terms of
economic strength and political refinement,
enhancing its citizen's welfare and safeguarding
human rights and dignity. |
V.I.P. INTERVIEWS 
