The potential of bilateral economic cooperation with South Korea is not fully unlocked

16 march 2015

"In order to enhance bilateral cooperation with South Korea, it is necessary to conduct an effective coordinated policies aimed at attracting foreign direct investment, successful implementation of infrastructure projects, creation of competitive conditions for alocation of export-oriented manufactures, increasing the share of the mutual trade turnover," said Denis Ershov, the Head of the Department for International Cooperation, speaking at a roundtable discussion on the Russian-Korean trade and economic cooperation.

According to the expert, the implementation of projects on the basis of international production cooperation in the Far East is attractive to both sides: it includes the development of industrial facilities, construction of port terminals, centers of shipbuilding and ship service. Infrastructure regional projects, construction of roads, power grids and power plants are of interest.

"Despite  existing obstacles, faced by Korean business in Russia, its dynamics is positive as a whole. Successes of  leading regions in attraction of  South Korean investments - Moscow, the Republic of Tatarstan, St. Petersburg, the Kaluga region, Nizhny Novgorod, the Irkutsk region, are due to the active position of local government, clearly defined strategy of the region, using all the resources available to support investors, as well as the two-way responsibility for minimizing  potential and real risks,” Mr. Ershov said.

"It is necessary, from the point of view of the state support of Russian exports, to improve  financial and non-financial instruments in terms of their availability and efficiency for small and medium-sized enterprises, operating in the non-energy sector," said Mr. Ershov. Russian trade missions abroad should become "customer-oriented" centers of comprehensive support for Russian exporters and potential investors, providing a full range of services from finding contractors to support contracts.

According to the rating agency Bloomberg Global Innovation Index, South Korea has become the world’s leading innovative economy in 2014. It is particularly important for Russia, implementing the innovative development strategy for the period up to 2020, to study the experience, accumulated by the Republic of Korea in the production of value-added products. At the same time Russia, as an important market for automotive products, instrumentation and electronics, plays an important role in the energy supply of the Korean fuel sector.

"According to the Russian Federal State Statistics Service (Rosstat), the turnover for  first 9 months of 2014 amounted to 20.5 billion dollars. We should note the positive dynamics of trade turnover of the Russian Federation and the Republic of Korea in recent years (2012 - 24.9 billion dollars, 2013 - 25.2 billion dollars), that shows the stability and capacity of trade relations between Russia and South Korea," said the expert.

The expert also announced the information of the Export-Import Bank of Korea - Korea Eximbank, according to which the inflow of foreign direct investment (FDI) from the Republic of Korea to Russia at the end of 2013 amounted to 63.4 million dollars. The volume of FDI, accumulated in the economy of the Russian Federation from the Republic of Korea amounted to 2 billion dollars.

The roundtable "Russian-Korean trade and economic cooperation" was held on March 11 in the Moscow Chamber of Commerce.

The problems of Russian-South Korean cooperation were discussed at the Analytical Center in November, 2014 at the roundtable "Russia and South Korea: prospects for development of foreign economic relations within the framework of the Eurasian initiative."