Scholarly article on topic 'Growing inter-Asian connections: Links, rivalries, and challenges in South Korean–Central Asian relations'

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Abstract of research paper on History and archaeology, author of scientific article — Matteo Fumagalli

Abstract The geopolitical context, which emerged from the collapse of the Soviet Union and the end of the Cold War, combined with Korea's growing economic prowess, enabled greater dynamism and diversification in Seoul's foreign policy-making. Growing pressure from energy-intensive economies coupled with new developments and investment in logistics and infrastructure has brought different parts of the Eurasian landmass closer together in recent years. Inter-Asian connections are especially growing. This article uses the case of deepening relations between Korea and the post-Soviet Central Asian republics as a vantage point to reflect on one such example of unfolding Asian inter-connectedness. In addition it sees Seoul's engagement in the region as a fitting example of Korea's broader ambitions to assert itself as a global economic player. The article shows that Korea's policy toward Central Asia has been primarily driven by energy needs and is defined by pragmatism. It finds that the economic dimension of the relationship has greatly overshadowed other aspects such as politics and security. In its pursuit of closer ties with the region Seoul has sought to turn structural weaknesses into added value and has attempted to develop a distinctive, non-threatening profile built around the lack of a political baggage and geopolitical ambitions, and the desire to share its experience of formerly impoverished turned leading economy. In turn, Central Asia's selective integration in the world economy has continued, also thanks to its ties with Korea. The Central Asian republics welcomed the opportunity to diversify their foreign relations, the sources of foreign investment and export routes. At the same time the opaque business environment, a leadership succession, which cannot be postponed for much longer, and Seoul's “no-strings attached” approach expose Korea to some risks as regime stability might not last forever.

Academic research paper on topic "Growing inter-Asian connections: Links, rivalries, and challenges in South Korean–Central Asian relations"

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Growing inter-Asian connections: Links, rivalries, and challenges in South Korean-Central Asian relations

Matteo Fumagalli

Department of International Relations, Central European University, Nador utca 9, Budapest 1051, Hungary



Article history: Received 1 July 2015 Accepted 8 October 2015 Available online 4 November 2015

Keywords: South Korea Central Asia Resource diplomacy New Asia initiative Eurasia initiative

The geopolitical context, which emerged from the collapse of the Soviet Union and the end of the Cold War, combined with Korea's growing economic prowess, enabled greater dynamism and diversification in Seoul's foreign policy-making. Growing pressure from energy-intensive economies coupled with new developments and investment in logistics and infrastructure has brought different parts of the Eurasian landmass closer together in recent years. Inter-Asian connections are especially growing. This article uses the case of deepening relations between Korea and the post-Soviet Central Asian republics as a vantage point to reflect on one such example of unfolding Asian inter-connectedness. In addition it sees Seoul's engagement in the region as a fitting example of Korea's broader ambitions to assert itself as a global economic player. The article shows that Korea's policy toward Central Asia has been primarily driven by energy needs and is defined by pragmatism. It finds that the economic dimension of the relationship has greatly overshadowed other aspects such as politics and security. In its pursuit of closer ties with the region Seoul has sought to turn structural weaknesses into added value and has attempted to develop a distinctive, non-threatening profile built around the lack of a political baggage and geopolitical ambitions, and the desire to share its experience of formerly impoverished turned leading economy. In turn, Central Asia's selective integration in the world economy has continued, also thanks to its ties with Korea. The Central Asian republics welcomed the opportunity to diversify their foreign relations, the sources of foreign investment and export routes. At the same time the opaque business environment, a leadership succession, which cannot be postponed for much longer, and Seoul's "no-strings attached" approach expose Korea to some risks as regime stability might not last forever.

Copyright © 2015 Production and hosting by Elsevier Ltd on behalf of Asia-Pacific

Research Center, Hanyang University.

1. Introduction

Uzbekistan's President Islam Karimov's visit to South Korea in May 2015, where he met with his South Korean counterpart President Park Geun-Hye, was the first trip abroad for Karimov after the March presidential elections, and the seventh

Department of International Relations, Central European University, Budapest, Hungary.

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visit he has paid to the country. The aim of the visit was to deepen economic cooperation between the two countries, find ways for increasing industrial modernization in Uzbekistan, and develop infrastructure (IHS, 2015). In turn, Korea has traditionally ascribed great importance to Uzbekistan, as a key investor in the country and an important commercial partner. This is just the most recent of the many presidential visits between Korea and Central Asia over the years. In 2014 President Park toured the region, stopping in Turkmenistan, Uzbekistan and Kazakhstan. Former President Lee Myung-bak also visited Central Asia in 2009, a focal area of his "resource

1879-3665/Copyright © 2015 Production and hosting by Elsevier Ltd on behalf of Asia-Pacific Research Center, Hanyang University.

diplomacy", prior to the late President Roh Moo-hyun who had held high-level meetings in Kazakhstan in 2004 before launching the Comprehensive Central Asia Initiative, Korea's first strategy toward the region. Central Asian presidents also frequently visit Korea.

This paper uses the case of Korea-Central Asia relations to reflect on growing inter-Asian connectedness and on Seoul's partial re-orientation of its foreign policy, fuelled by commercial and energy needs. To this end, the paper asks why Central Asia unexpectedly became an important region of interest to South Korea, and investigates the rationale behind Seoul's penetration in the region and its dimensions, the opportunities this presents, the rivalries it generates, and the positive and negative externalities that result from deepening ties. More broadly, engagement in Central Asia constitutes a case of Korea's re-orientation of its foreign policy, of its ambitions to play a greater role internationally, especially in Asia, and beyond the confines of its immediate neighborhood (Cheongwadae, 2009; MOFA, 2014). The paper shows that consistently with its narrative of a poor aid-dependent country turned wealthy and donor, Korea has used official aid assistance as a tool to penetrate a new and faraway region. To be clear, Korea and Central Asia were an unknown quantity to each other, and the development of such a close relationship was far from a foregone conclusion. The claims in this respect are two-fold. First, Korea's approach to Central Asia has been driven by a considerable degree of pragmatism, with little concern for questions of the region's lack of democracy and the widespread corruption that pervades the local economies and political systems. Second, the Central Asian states have used the opportunity of growing multipolarism in the region to diversify export routes and sources of investment, as well as carve out significant foreign policy niches - and margins of maneuver - for themselves. All this served one important purpose: domestic regime survival.

The paper is structured as follows. First, the background to Seoul's greater ambitions and assertiveness beyond its neighborhood is revisited. The paper subsequently outlines the establishment of relations between Seoul and the Central Asian republics. Next, the links between Korea and the region are examined, with special attention to aid, trade, and investment. Then Korea's approach is compared to that of the two other big East Asian players, China and Japan, so that Seoul's distinctive approach is teased out and its added value identified. Final remarks conclude.

2. The diversification of Central Asian foreign policies

Koreans were not an unknown quantity to Central Asians at the time the five republics of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan attained independence from the Soviet Union in 1991. A Korean presence on the territory of the then Russian empire was first established in the early 1860s, when Korean farmers and peasants were fleeing landowners and moneylenders on the Korean peninsula, at the time under the rule of the Joseon dynasty. In 1937 Soviet Koreans were among the first populations to be deported by Stalin, and in the fall that year they were forcibly resettled to the Central Asian steppes. While small numbers reached even Turkmenistan, Tajikistan and

Kyrgyzstan, it was in Soviet Uzbekistan and Kazakhstan that the majority found a new home (Khan, 1995, 1998; Kim, 1999, 2000). After mobility restrictions were lifted in the post-Stalin era the Koryo saram (or Koryoin, as the "Soviet Koreans" were also called) soon urbanized and turned into a Russified community. In the wake of independence there was an expectation that old severed ties between the local Koreans and the alleged ancestral homeland would be restored. This proved problematic since the Soviet Koreans never came from the Korean peninsula, but were rather the descendants of those Koreans settled in the Russian Far East, in the areas of Khabarovsk and Vladivostok. However, Central Asia was their home (Diener, 2006). In the wake of Central Asian independence, Korea set up a number of programs aimed at reviving cultural identity among a Russified diaspora community.1 Links between Korea and the diaspora were also often invoked during frequent visits by South Korean officials to the region (Ko, 2009).

However, it was not the ethnic Korean dimension that drove the development of relations between Central Asia and South Korea (Fumagalli, 2011). Independence and growing international attention due to the quest for energy from powers old and new, close and afar, opened new opportunities for engagement and for diversifying foreign policy ties. The fact that in the end no zero-sum game developed in Central Asia, and that all major powers coexisted (Cooley, 2012), allowed both the diversification of foreign policy and economic ties on the side of the Central Asian states, and also the entry of relatively new actors, like Korea or Japan, on the other.

The lowest amount of activism in foreign policy terms can be seen in the cases of Turkmenistan and Tajikistan. Turkmenistan's policy of neutrality (Anceschi, 2010) meant a self-imposed isolation and a very low level of integration in either the global economy and international (or even regional) institutions. At the same time Ashghabat use foreign economic relations and energy export routes as an alternative to foreign policy-making. This led to a gradual repositioning away from Moscow toward China, on which Turkmenistan now closely depends, induced by the fact that most of Turkmen gas exports now go eastward. Gradually the country has also opened up to Korean investment, which, however, promising and increasing (Reuters, 2014), remains negligible compared to neighboring Kazakhstan and Uzbekistan (see Tables 1 and 2 ). Tajikistan, after emerging from the civil war of the 1990s, has remained a close partner of the Russian Federation, on whose support (economic, security) it so closely depends.

Similar to the case ofTurkmenistan, Tajikistan's ties with Korea remain marginal. Kazakhstan has explicitly adopted a multi-vectorial foreign policy, through which it has sought to preserve good ties with Russia and a wide range of new

1 Seoul has invested considerably in cultural diplomacy too, such as cultural exchanges, training programs and scholarships. The Korea Foundation, the Academy of Korean Studies, and the Overseas Koreans Foundations all have programs that are available to Korean diasporic communities. In order to avoid what at present remains a speculative discussion based on anecdotal evidence of the impact of Korea's soft power, this paper does not examine this dimension of Korea's engagement in the region. For work on Korea's soft power, see Lee (2012), Lee (2013), Lee and Melissen (2011), and Kim and Marinescu (2015).

Table 1

Main imports and exports (2012).

Imports from Korea Exports to Korea

(item; %) (item; %)

Kazakhstan Cars 11 Titanium 29

Vehicle parts 9 Ferroalloys 27

Broadcasting 13 Raw aluminum 17

accessories Refined copper 8

Kyrgyzstan Cars 14 Refined petroleum 45

Trucks 12 Nuts 26

Fabric 26

Tajikistan Cars 37 Raw aluminum 50

Trucks 14 Tanned sheep and goat hides 23

Large construction 13


Turkmenistan Cars 27 Integrated circuits 54

Buses 10 Cotton 35

LCVs 4

Uzbekistan Vehicle parts 43 Fertilizers 27

Cars 11 Radioactive chemicals Cotton 15 21

Source: Observatory of Economic Complexity, MIT (

Table 2

Korean FDI in Central Asia (1992-2013).

Announced amount (USD in million) No. of Korean enterprises operating in the country

Kazakhstan 3400 234

Kyrgyzstan 164 68

Tajikistan 63 11

Turkmenistan 45 1

Uzbekistan 976 208

Source: Korea Export-Import Bank ( _eng.html).

actors, from China to the US to the EU and Korea. Likewise, Kyrgyzstan has cultivated warm ties with Russia while maintaining good relations with the west. Yet in recent years western influence has declined to the advantage of Russian and Chinese influence (Fumagalli, 2016). Uzbekistan has been the more active and dynamic internationally, alternating cozy ties with the Kremlin with warm relations with Washington (Fumagalli, 2007). In short, the Central Asian republics have developed different foreign policy positions. What they share in this diversity is the rationale behind their foreign policy conduct. Here the paramount concern has been regime survival (Cooley, 2014). In the post-Cold War geopolitical environment they exploited the increasing multipolar regional environment to their own advantage. In this respect South Korea has established itself as a reliable partner of the Central Asian states unlikely to exert any pressure on domestic political issues. "The rise of new external actors in the areas of trade, finance, and development assistance has further empowered these states to oppose externally enforced conditions and western calls for economic and political reforms." (2014, p. 242). As will be shown in the pages below, Korea's involvement has

contributed to the diversification of Central Asia's foreign policy ties, export routes, and sources of investment.

3. The making of a global economic player

The analytical entry point for this paper is the debate surrounding the (partial) re-orientation of South Korea's foreign policy following the end of the Cold War, most notably its foreign economic relations (Heo & Roehrig, 2014; Kang, 2014; Watson 2011), and the greater assertiveness, in the region and beyond it, that has accompanied this process. The engine behind this shift has been Seoul's greater economic prowess.

Although much has been written, for obvious reasons, about Korea's military security and the threat that North Korea has posed to the South's survival, security for Korea has for long understood in both military and economic terms (Evans, 2012, p. 67). The hard-security dimension is rather self-evident owing to the legacy of the Korean War, the divided peninsula, the presence of both a sizeable military US contingent in the southern part of the peninsula and a highly militarized state north of the 38th parallel. Without questioning the importance of all these issues, a growing number of scholars in Korea have also acknowledged how that energy insecurity constitutes a key cause of vulnerability for Korea (Kim, Shin, & Chung, 2011; Park, 2009; Sung, 2011; Cho et al., 2010). Without taking this dimension into consideration it would be difficult to make sense of Korea's penetration in faraway regions, such as Central Asia (and more recently Azerbaijan) and even Africa and Latin America (Darracq & Neville, 2014). An "energy poor country with an energy intensive economy, Korea is forced to import the vast majority of its energy resources" (Evans, 2012). Typically this has meant importing energy from distant hubs in the Middle East. To this end Korea has had to compete with equally hungry giant neighbors such as China and Japan. As Calder and Kim (2008) note, "the three core elements of Korean energy security are: Dependence on imported oil, coal and gas due to lack of domestic resources; disproportionate reliance on ME, and intensifying competition with its neighbors to secure energy resources" (p. 1).

Investment in renewables domestically and possibly tap in its own minimal coal reserves and wind farms. This helps in reducing the dependence on energy imports, but only to a very limited extent (Kim, Shin, & Chung, 2011). Korea's margins of maneuver to address this predicament were limited during the Cold War, but this changed almost overnight in the late 1980s and the early 1990s as the Soviet Union opened up (in need of investment and aid) and subsequently disintegrated.2

In order to understand Korea's quiet but steady asser-tiveness in foreign economic relations one has to recall two developments. The first, domestically, is the country's meteoric rise from one of the world's poorest economies in the early 1960s, dependent on investment from the US and Japan, to one of the world's leading economies, no longer

2 South Korea quickly displaced the North as the Soviet Union's commercial partner in the late 1980s, culminating in the establishment of diplomatic relations between Moscow and Seoul in 1990, much to Pyongyang's displeasure.

aid-dependent but rather aid-providing (Kang, 2014). As former President Lee puts it, "the Republic of Korea wants to give back to the international community even more than what it has ever received. The Republic of Korea stands ready to extend a helping hand to those who are in need [...]." Lee (2009).

The second factor, which enabled greater ambitions and assertiveness on the Korean side, was geopolitical change. Kang (2014) recalls that:

the geopolitical environment during the Cold War constrained Korea's foreign economic relations. The Korean government has never pursued foreign economic policies separately from other strategic, political, and security considerations: this tradition remains a critical element for understanding Korea's current and future foreign economic policies (p. 203).

Economic ties were heavily directed toward the US and Japan. The end of the Cold War was in this respect a catalyst for change. Responding to this changing economic geography, the Korean government has tried to strengthen its economies ties with China, ASEAN and new regions, especially with South and Central Asia, so as to secure more energy resources and broaden its own production and investment networks. This process of diversification was slowed down by the Asian financial crisis in the late 1990s, but gained again momentum in the 2000s, as the Korean economy recovered (Rabelland, 2000). These efforts, however, do not necessarily imply that the government's focus has moved away - or will do so in any significant way - from its close cooperation with the United States, especially in the security realm. At the same time this has led to Korea conceiving itself as an increasingly global economic player. In this context, engagement in Asia (beyond East Asia, that is) is crucial to understand Korea's new role, its new ambitions and the outward projection of its domestic economic prowess (Heo & Roehrig, 2014; Lee, 2010). In practice this has meant that, "strengthening a multitrack foreign economic strategy" (Kang, 2014, p. 206).

From this perspective Central Asia matters significantly to Korea. The region is rich in natural reserves: it is estimated to be home to 3% of the world's oil reserves and 6% of the world's gas reserves, while Uzbekistan is home to 2% of the world's uranium reserves (Evans, 2012, p. 71). Central Asia not only provides oil, gas, uranium imports, which are key to addressing energy insecurity, but is also a market with promising potential growth. Moreover, despite the fact that trade turnover is still imbalanced, Korea trades commodities such as oil and gas for plastic manufactures, consumer goods, electronics, cars, and heavy machinery, as shown in Table 1 below. Economic complementarities lie at the core of this evolving and deepening relationship. As Evans (2012) put it, "the complementarities of this three-pronged strategy (diplomacy, trade, aid) are undergirded by Korea's motivation to increase its global diplomatic voice to a level commensurate to its economic position" (p. 72).

The next sections map the development and consolidation of links between Korea and the Central Asian republics, before moving on to place Korea's engagement in the region in the broader comparative East Asian context. An assessment of the opportunities and challenges that arise

from such engagement follows. Diplomatic relations were established fairly swiftly in 1992; however, in the following decade, Korea maintains a relatively low profile, ascribing priority to ties with Uzbekistan, whereas relations with all other four republics remained at a marginal level.

3.1. Roh Moo-hyun's comprehensive Central Asia initiative

Korea had already started paying attention to the Central Asian region in the 1990s, although engagement slowed down considerably in the second half of the decade because of the Asian financial crisis. For a proper holistic approach to the region one had to wait until late President Roh Moo-hyun (2003-2008). Following two visits to Kazakhstan and Uzbekistan in 2004 and 2005, respectively, in December 2005 the Korean government launched a Central Asia conference, in which participants from both state and private organizations participated. The outcome was the "Comprehensive Central Asia Initiative," later adopted by the cabinet in 2006, which aims to "establish a staging point in Central Asia for advancement to the Eurasian continent; [and] secure long-term supply of energy resources" (Ko, 2009). To those ends, the plan also envisaged "full exploitation of bilateral relations strengthened through summit-level diplomacy; differentiated approaches to individual states based on national characteristics; more synergy effects through closer collaboration between interrelated businesses and advancement of industries with relative advantage; strengthening the legal and systemic foundation for expansion of cooperative infrastructure and sharing of Korea's economic development experiences to establish strategic partnerships for national development of the Central Asian nations" (Ko, 2009).

3.2. Lee Myung-bak's New Asia Initiative

When former President Lee Myung-bak came to power in 2009, Korea was "struck by high oil and raw minerals prices." Under his presidency Korea's foreign policy grew more ambitious and assertive, and resource diplomacy became one of its defining elements. The synergetic stateprivate approach enabled private-sector representatives to be deployed more extensively, supported by the public-sector trade representation that was the leading element of Korea's diplomatic presence in these countries. In this way, Seoul's economic and diplomatic efforts took on a symbiotic relationship overseas (Snyder & Easley, 2014). In March 2009 President Lee launched a New Asia Initiative to broaden Seoul's engagement in Asia Lee (2010). At a general level the Initiative aims to broaden the horizon of Korea's diplomacy, long-focused on the Pacific and specifically on its relationship with the US, North Korea and China and Japan. Partnership with the ASEAN countries figures more prominently, as well cooperation with Australia, New Zealand, and the Central Asian countries. In a break with the past, the initiative lays out a vision for a more assertive Korean leadership in the political, security, and economic spheres. In May 2009 Lee also announced a New Silk Road Initiative to emphasize the strategic importance of Central Asia, particularly Uzbekistan and Kazakhstan (Korea Herald, 2009, 2010; Zhu, 2009). Consistently with Seoul's earlier approach toward the region, the strategy refrained from

bundling all countries in an undistinguished regional mass, but rather tailored the approach to specific regions and countries. Building on its experience in the post-independence period, Korea has focused on a few key countries (especially Uzbekistan, and Kazakhstan more recently) and a number of strategic sectors (most notably gas, uranium, and petrochemicals).

3.3. Park Geun-hye's Eurasia initiative

In October 2013, Seoul hosted the Global Cooperation in the Era of Eurasia conference, where President Park (2013-present) outlined her economic vision for the region. Specifically, her "Eurasia Initiative" called for linking energy and logistic infrastructure (such as rail networks, oil and gas pipelines, and electricity grids) across Europe and Asia. Under the watchwords of "one continent, creative continent, and peaceful continent," the initiative projects a unified system of transport, energy, and trade networks across the vast Eurasian continent (Korea Herald, 2013; Park, 2013). As President Park put it:

Win-win Eurasian energy cooperation must be developed, such as linking energy infrastructures including electricity grids, gas and oil pipelines, and co-developing China's shale gas and eastern Siberia's petroleum and gas'. [...] 'Logistics and energy network in the Eurasian region will not only reduce logistics costs and stimulate global trade, but will also stabilize raw materials costs and contribute to the growth of the world economy (Park, 2013).

To these ends, the strategy presupposes the development of a "Silk Road Express," which would connect rail and road networks from Busan to Europe, as well as new sea routes through the Arctic Ocean (Park, 2013). The initiative has the ambition to be transformative in three key dimensions, as Kim (2015) puts it. First, it calls for an integration of the Eurasian economic space. This would open up new markets for Korea's companies, and in turn it could secure investment in logistics and infrastructure for the local Central Asian economies. In security terms it attempts to unblock the impasse on the Korean peninsula by trying to highlight the potential contribution of North Korea (of which the South would be the direct beneficiary) in multilateral projects. And finally, in geopolitical terms, a western axis reaching out to Russia, Central Asia and Europe would complement the otherwise usually unbalanced geopolitical environment in which Korea operates, tilted toward China and the United States.

In sum, then, Roh, Lee and Park's strategies have been extremely ambitious, yet at the same time rooted in a realistic reading of Korea's economic needs and vulnerabilities. The next section builds on this assessment to examine the economic dimension of Korea's penetration in the region, which integrates a material component (e.g. aid, investment, and trade) with a more symbolic one, such as highlevel (summit) diplomacy.

4. Complementary economies, but a skewed relationship

The Central Asian republics inherited diplomatic ties with North Korea, but its influence was quickly displaced by South

Korea's greater attractiveness as an economic model and potential as an investor. Diplomatic relations with the Republic of Korea were soon established in 1992. In the ensuing years Seoul adopted a carefully tailored strategy that avoided "bundling the Central Asian states in a collection of undistinguishable stans" (Fumagalli, 2012). Rather, Seoul initially ascribed special importance to relations with Uzbekistan, followed in later years by ties to Kazakhstan. Gradually, it moved on to encompass all five states in its multi-pronged strategy toward the region.

4.1. Aid

Korean policy-makers have used the Official Development Assistance (ODA) to create political goodwill and fertile conditions for subsequent investment. International assistance, Heo and Roehrig (2014, p. 183) contend, provided an important boost to Korea's economic growth. With economic growth, Korea assumed a greater sense of responsibility and a willingness to play a greater role in maintaining international peace and stability. After several decades during which Korea was an aid-recipient country, in 1987 the country began to reverse the pattern. In 2009 the country was admitted to the Organization for Economic Cooperation and Development's Development Assistance Committee (OECD-DAC), which essentially includes the donor countries. Korea's ODA is delivered mostly in the form of bilateral assistance, government-to-government, with a smaller portion (about 25%) given to multilateral organizations (e.g. UN and the World Bank's International Development Association). Technically, aid is channeled through two instruments: the Korean International Cooperation Agency (KOICA) primarily and the Economic Development Cooperation Fund (EDCF). The EDCF was established in 1987, three years before Korea officially stopped being a net aid recipient country; loans are dictated by the Ministry of Finance. Grants are disbursed through KOICA, and these are mandated by the Ministry of Foreign Affairs and Trade (MOFAT). Aid allocated to Eastern Europe and Central Asia has increased significantly over the years, rising from 1% of all of Korea's aid to 5.7% in 2011. As Fig. 1 below shows, Kazakhstan and Uzbekistan have traditionally received a considerable amount of ODA from Korea; both countries were top recipients in 2011, whereas as of 2014 Azerbaijan and Uzbekistan were the top recipients at USD2 million and USD6 million respectively (and both were listed in the top 26 priority countries). Korean ODA to Uzbekistan has continued to increase over the years, whereas aid to Kazakhstan had declined as the country's economy grew and Astana became more of a commercial partner to Korea. The sectors receiving the bulk of Korea's aid are energy and industry (42.9% in 2011), with education in second place at 23.6% (Evans, 2012, p. 73).

4.2. Trade

Trade turnover between Korea and Central Asia has increased 180 times between 1992 and 2010 (Evans, 2012, p. 77; see also Table 3). Most of Korea's trade occurs with Uzbekistan and Kazakhstan (54% and 38% respectively), whereas commercial exchanges with Turkmenistan,

Figure 1. Korean ODA to Central Asia (1992-2013). Source: KOICA Statistics (

Kyrgyzstan and Tajikistan remain at negligible levels (5%, 2% and 1%, Chart 1).

What the macro-level picture does not reveal is that trade is in all cases extremely skewed in favor of Korea (Korean

exports greatly exceed imports). Korea is currently Uzbekistan's fourth-largest commercial partner: over the past two decades trade turnover between the two countries has surpassed USD5 billion, of which USD3 billion is represented

Table 3

Korea-Central Asia Trade (1992-2014, USD in thousand).

Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan

2014 1,467,727 164,342 51,311 193,143 2,059,819

2010 938,323 107,248 133,783 109,996 1,460,622

2005 514,161 68,106 14,965 15,370 521,923

2000 131,765 17,303 12,352 7778 334,402

1995 126,298 3120 14,373 7425 379,035

Source: Korea Customs Service (





■ Uzbekistan

■ Tajikistan

■ Turkmenistan

■ Kyrgyzstan

■ Kazakhstan

Chart 1. Trade turnover between Korea and Central Asia (2014). Source: KITA (Korea International Trade Association: board_sta_list.jsp?grp=S3&code=S3001).

by Korean investment, with about 400 Korean firms operating in the country (Central Asia Newswire, 2012a; Voloshin, 2012). Cooperation ranges from loans to support for Tashkent's media and medical sectors (Central Asia Newswire, 2012b), and focuses on strategic partnerships in a number of key sectors, with a special focus on hydrocarbons, minerals, and uranium, key to Korea's nuclear power plants (Table 1). Korea is also Kazakhstan's fourteen-largest trading partner, with trade turnover exceeding USD1 billion overall in 2011 and reaching almost USD1.5 billion in 2014, doubling the exchanges compared to 2010 (Voloshin, 2012; Table 3).

4.3. Investment

In recent years deals have increased in number and size. Investment has been uneven in the region, with Turkmenistan, Tajikistan and Kyrgyzstan marginally - and only recently - benefitting from Korean FDI, whereas Kazakhstan and Uzbekistan are among the world's top recipients of Korean FDI (10th and 44th).

As Table 2 illustrates, Kazakhstan has been the largest recipient of Korean Foreign Direct Investment (FDI), followed by Uzbekistan (USD3.4 billion and USD976 million respectively, for the period 1992-2015). During the Roh presidency, in 2006, the Korean National Oil Corporation (KNOC), Kogas and Uzbekneftegaz signed a memorandum of understanding that entailed exclusive exploration and production rights in the Chust-Pap and Namangan-Terachi gas fields. In 2007, the Korean Consortium for the Caspian Oil Project, which includes SK, LG, Samsung and Daesung, acquired a 27% share in the Zhambyl offshore block in cooperation with Kazmunaigas. In 2008, Uzbekneftegaz and Kogas signed a USD1.8 billion dollar agreement to explore the Surgil gas field.

Korea's economic penetration of the region continued, in fact accelerated, under Roh's successor, Lee Myung-bak, who made resource diplomacy a central component of his tenure in office. In 2009, KNOC and Hyundai secured a USD1.5 billion deal to build a gas treatment complex near the super-giant Yolotan gas field in Turkmenistan. These agreements have paved the way for deeper cooperation, including three headline deals signed during Lee's tour of the region in 2011. A USD4 billion agreement to build a petrochemical complex in Atyrau (western Kazakhstan); another USD4 billion contract to build two power plants in Balkhash (eastern Kazakhstan), expected to generate up to 7% of the country's electricity; and a USD4.1 billion agreement to develop Uzbekistan's Surgil gas field. President Park also emphasized the potential the region holds for Korea's investment, and in her visit to Central Asia in the summer of 2014, she focused on logistics and energy infrastructure. In Uzbekistan she signed USD8 billion-worth of deals (gas, petrochemical plants, Surgil gas field), and also reached an agreement with the Uzbek government to raise Korea's uranium imports from 300 million tons to 500 million tons in coming years.

In Kazakhstan, investment deals were signed in relation to the Balkash thermal power plant, Zhambyl oil and gas fields, and a chemical plant in Atyrau. Even Turkmenistan, long neglected by Korean investors, saw a sizeable USD4

billion deal between Turkmengaz-LG/Hyundai over the building of a gas-processing plant. In total, Korea has invested USD3 billion in several projects. Somewhat controversially, aid and bilateral agreements have followed major business deals for Korean conglomerates in the region.

Korea has pursued different strategies in its Central Asian investment. Most of investment in Uzbekistan is state-driven, whereas private firms are the leading actors in the case of Kazakhstan. Despite this difference, what is distinctive in Korea's case is the synergy between the state and private actors, and also the peculiar role of the large industrial conglomerates, the chaebols. Korea has complemented its bilateral approach with multilateral diplomacy by establishing a Korea-Central Asia Cooperation Forum. The Forum, originally founded in 2007 and held annually, aims at "enhancing the relationship" between Korea and the five republics by "initiating multilateral cooperative projects." In addition to the Korea-Central Asia Cooperation Forum, a Korea-Central Asia Caravan Event has also been held in the region (MOFA, 2014, pp. 122-3). Open to officials, businessmen and NGOs, the event included (Korean) film festivals, taekwondo tournaments, and seminars on fiber industries. The forum was designed to enhance cooperation in the educational, economic, and cultural fields and to build networks between governments, business, and academia across the region.

5. From opportunity to risk: challenges to Korea-Central Asia relations

On the surface, close ties between Korea and the Central Asian republics seem like a match made in heaven. Economic complementarities are the result of Seoul's energy predicament and the Central Asian economies' need for capital (investment), technology and export markets. Regardless of how realistic the goals laid out in her Eurasia Initiative might be, President Park's emphasis on logistics and energy infrastructure represents a correct reading of the situation on the ground. It is here that we can see Korea's distinctiveness and its added value when compared to other actors. Although both the country's resource diplomacy and the economic predominance of the chaebols have come under attack domestically in recent years (Financial Times, 2015; Haggard, Lim,& Kim, 2003; Lee, 2008; Reuters, 2012), the particular and peculiar structure of the chaebols is appealing in Central Asia, where large industrial conglomerates offer a number of needed services across business sectors. In particular, the chaebols are able to ensure that trade flows by handling multiple (most, in fact) sides of each transaction, including exporting capital equipment, financing, supplying infrastructure, and even finding export markets (Calder & Kim, 2008). More generally, Korea's record as a country that went from being one of the world's poorest to one of its leading economies, and its lack of political baggage (unlike Russia, the US, China or even Japan) have contributed to Seoul's positive image in the region. On the material side, Seoul could offer a state-private synergetic approach that would deliver the capital and tech/know-how that the Central Asian economies need. On a more symbolic level, unlike Russia, South Korea does not have

sweeping geopolitical ambitions in the region, and therefore carries far less baggage in its economic relationships. Vis-a-vis China, its smaller size helps assuage local concerns about "colonization." Seoul has developed tailored approaches for the needs and demands of individual states, so that local republics do not feel bundled into a collection of "undistinguished stans."

While Seoul's incremental and tailored engagement seems to be paying off, a number of challenges stand in the way of further investment into the region. In the short-term one obvious barrier is the sheer geographical distance between Korea and Central Asia, a challenge only augmented by the underdevelopment of physical infrastructure, the local states' reluctance to relax border controls and even regional rivalries. In the medium term, leadership succession will become inevitable in the region, given that some of the presidents (Karimov in Uzbekistan and Nazarbayev in Kazakhstan) are ageing and there are no visible plans for succession. Seoul has seemingly been too willing to pay the "price of access" (Cooley, 2012) by de facto contributing to authoritarian survival in order to enter high-risk markets and opaque business environments. The costs of doing so have become visible to ordinary Koreans in the wake of the eruption of the "resource diplomacy scandal" in 2014-2015, when former President Lee was accused of over-spending resources with relatively minor results, often condoning shady deals between Korean companies and the local Central Asian elite circles (Financial Times, 2015). Koreans will also have to resolve the fractiousness of their political system, whereby any former president has to fear retribution by the new winning side. Another factor, which might be worth considering in the medium run, is Russia. Although Russia is a relatively friendly environment for South Korean investment (and has been so from the late Soviet period), Moscow may set limits on external challengers to its former hegemony, especially when tangible economic interests are at stake. Russia might prove less keen to see a greater number of external players consolidate their presence in what it considers as its backyard. Finally, a more speculative challenge - with obviously immediate repercussions but also with an uncertain future - concerns North Korea and its unreliability as a political and economic partner. Unless Korea wishes to rely on sea lanes of communication for connecting Chinese ports to the southern part of the peninsula, any serious project of Eurasian integration will have to pass through the two Koreans. This would add to, rather than decrease, Korea's vulnerabilities.

6. Rivalries with other East Asian countries

"If viewed as a region of increasing multipolar influence," Alex Cooley observes, "the region's un-mistakable shift to the East" becomes apparent (Cooley, 2014, p. 256). Yoshimatsu (2014) has noted that, "lingering historical animosity reinforced by growing concerns about energy security encourage Asian states to use economic instruments such as trade, foreign aid, and commercial agreements to pursue their key diplomatic objectives." On a similar note, Jain (2014) also notes that "Asia intense rivalry drives the geopolitics of energy." As such, there appears to be "minimal gain in cooperating with other energy consumers" (Jain,

2014, p. 547). Despite Korea's efforts (and interests) in fostering Eurasia-wide energy cooperation, at present there is little to suggest that the three main actors in East Asia are either cooperating or envisaging cooperation when it comes to pursuing a Central Asian agenda. And yet, the Central Asian region differs markedly from East Asia in terms of how - and the extent to which - rivalries between the three main East Asian players (China, Korea, and Japan) play out and affect local dynamics. There is no great game understood in terms of competition between external actors for influence, presence, and resources.

China's approach has been very pragmatic (Laruelle & Peyrouse, 2013). Beijing has relied on a multi-pronged strategy combining the close pursuit of bilateral ties and the use of multilateral frameworks (such as the Shanghai Cooperation Organization), where, at least formally, all players -big and small - could feel equal. In this context, the Central Asian states could manage relations with two much more powerful players (China and Russia) at once. China has chosen to advance its security agenda first and has turned toward energy and trade only recently (from the 2000s onward).

Japan's approach differs from that of China and Korea, as Tokyo's strategy has been hindered by the lack of a clear conceptualization of its Central Asian approach inJapa-nese policy circles and a lack of understanding thereof in Central Asia. (Dadabaev, 2013, p. 532). The result has been a 'hybrid' strategy, torn between pragmatism and a human security approach, perhaps inevitably yielding mixed results (2013). Similar to Korea, Japan has provided the region with considerable amount of assistance. The difference in the amounts allocated to the region is staggering. In 2013 Korea spent a total USD32 million for the entire Middle East and Central Asian "region," whereas Japan allocated USD26 million to Kazakhstan alone; Uzbekistan received USD6 million from Korea and USD22 million the same year (JICA, 2014).

When compared to the other East Asian countries also active in the region, South Korea's approach more closely resembles China's. This is because both actors appear to have developed a purely pragmatic approach to their engagement of the Central Asian region. Thanks to its "no strings attached" policy, where economic support is not accompanied by political conditionality, Korea potentially competes with China's growing economic influence in the sense that both countries are home to energy-intensive economies in ever-greater need of natural resources, but also reflect a belief that large integrated Korean firms enjoy an advantage in providing a range of services to Central Asian partners in complex investments (Cooley, 2014; Fumagalli, 2012, pp. 89-90). Korea is surely smaller and a late-comer to the region, but has no geopolitical ambitions. Consequently, its involvement has not raised the same suspicions, or reactions, that attempts at establishing Western presence and influence. In addition, Korea's successful export-led industrialization has made the country a potential development model (Snyder & Easley, 2014). As to the United States, Korea's good ties with the Central Asian republics have served Washington well. On the one hand Seoul's influence can be seen as a small yet significant counter-balance and an alternative to China's otherwise endless expansion.

On the other, Seoul has remained a dependable ally for Washington, as the cooperation over the logistics hub in Navoi (in central Uzbekistan) demonstrates (Tynan, 2009). The upgrading of facilities at Navoi Airport from 2009 onward constituted not only an example of close Uzbekistan-Korea economic cooperation, but it also fits in well in attempts to restore strategic cooperation between Washington and Tashkent. The logistics hub at Navoi in central Uzbekistan helped reconnect Uzbekistani-US cooperation in the Afghanistan theater prior to the launch of the Northern Distribution Network in 2009.

7. Conclusion

The paper has examined the evolution of South Korea-Central Asian relations as a vantage point on growing inter-Asian connectedness. In the Korean case, interest has been driven by economic factors, namely the country's energy vulnerabilities and paucity of domestic natural resources, as well as the desire to find new markets for local products. Official development assistance has been an important part of the story of Korea, sharing its experience as a developing nation, turning into a major economic powerhouse and returning to the international community what it had received in moments of need. The provision of aid, in the form of grants and loans, has contributed to creating a receptive environment (business, regulatory, political) for Korean investment, be it state, private, or mixed. Trade and investment have also expanded dramatically. Through an empirically driven study of Korea-Central Asia relations the paper has sought to contribute to recent reflections on Korea's energy security (Kim, Shin, & Chung, 2011) and how the region might partly contribute to addressing Seoul's vulnerabilities (Hak, 2009; Park, 2009; Sung et al., 2011; Cho et al., 2010; Zhu 2007).

Through an analysis of links, rivalries and opportunities in Korea-Central Asia relations this paper advanced three main arguments. First, the story of Korea's involvement in Central Asia speaks to the broader process of redefinition of South Korea's role in global affairs (Watson, 2011; Heo & Roehrig, 2014; Kang, 2014; Lee, 2012; Zhu, 2007). Seoul's engagement is relatively recent and is entirely out of the traditional region,because Korea has - since the establishment of the republic in 1948 - preoccupied itself, understandably, with its immediate neighborhood where it faces a threat to its survival in the form of the DPRK and competitive relations and complicated historical legacies with China and especially Japan. Together with a SouthEast Asian trajectory (Steinberg, 2010), Central Asia has been one of the two axes of a broader Asian engagement.

Second, greater activism and ambitions have not - thus far - provoked a backlash by other players, including the other big two East Asian states: China and Japan. Although relations could potentially turn competitive soon (especially with China), and cooperation remains very limited, neither local actors nor other external players have perceived Korea's engagement as threatening. Korean policymakers have gone a considerable length, with some success, to seek energy cooperation and ensure that all three countries can continue to pursue their own agendas without encroaching on its other and without turning the pursuit

of their respective objectives into a zero-sum game. Finally, South Korea has invested more in projecting its soft power, although evidence about its impact in the region remains anecdotal due to the paucity of reliable surveys, a topic that could be the focus of future research.

Last but not least, the Central Asian states have openly welcomed the presence of yet another actor in the regional economic landscape. Korea's involvement has contributed to the diversification of Central Asia's foreign policy ties, export routes, and sources of investment. As Cooley (2014) notes, "far from being passive actors in the face of globalization and great power competition, Central Asian governing elites and locally connected economic actors will continue to find new ways of leveraging outsider actors" (p. 257). As a result, "the rise of new external actors in the areas of trade, finance, and development assistance has further empowered these states to oppose externally enforced conditions and western calls for economic and political reforms" (Cooley, 2014, p. 242). This paper has illustrated how Seoul's pragmatic approach to foreign policy towards a new region has worked in practice. To conclude by returning to the issue of growing Asian interconnectedness, much - as always -depends on how North Korea will evolve, since connections to both rail routes and pipelines depend on Pyongyang's collaboration, involvement, and reliability as a partner. Failing that, land-based Silk Roads of various kinds (so, with the exception of sea lines of communication, inexpensive yet time-consuming) will end at the Chinese-North Korean border.


This work was supported by the Core University Program for Korean Studies through the Ministry of Education of the Republic of Korea and the Korean Studies Promotion Service of the Academy of Korean Studies (AKS-2011-OOO-OOOOOOO).


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