KOREA AND MALAYSIA
INVESTING AND GROWING TOGETHER
(as featured in Korea Magazine May 2011)
Through over a half century of diplomatic relations, South Korea and Malaysia have become important economic partners. Leaders from the two countries met in Seoul in early April to find ways to expand upon trade and investment. With the support of both President Lee Myung-bak and Prime Minister Najib Razak, a Korea-Malaysia Free Trade Agreement seems more likely than ever. by Jo Yeong-ju
There was an enlargement summit meeting for Korea-Malaysia at Cheong Wa Dae, or the Blue House on April 5.
From April 4 to 6, Malaysia’s Prime Minister Haji Mohd Najib bin Tun Haji Abdul Razak visited Korea. While Prime Minister Najib had previously come to Korea in June 2009 to attend the Korea-ASEAN Summit held on Jejudo Island, this was his first official bilateral visit since taking office in April 2009.
During his visit, Prime Minister Najib met with President Lee Myung-bak on issues ranging from the economy and trade to science and energy technology. Through a series of summits and banquets, the leaders worked to deepen their countries’ relationship and lay the foundation for future cooperation on the local and international level.
High on the agenda was the possible Korea-Malaysia Free Trade Agreement. The leaders were briefed on the progress ministers of trade in the two countries had made in researching the elements of a potential agreement, and they welcomed the positive consensus on the benefits of an FTA.
Trade between Korea and Malaysia stood at US$15.6 billion last year. At a summit meeting held in Kuala Lumpur last December, President Lee and Prime Minister Najib predicted that trade volume between the two nations would double within five years. The two leaders also agreed at that summit to actively push for a bilateral FTA.
In April’s Seoul meeting, President Lee gave high marks to the Malaysian government’s efforts to attract foreign investment, and encouraged Prime Minister Najib to continue to support Korean investors in Malaysia. Lee also stressed the importance of bilateral cooperation in investing elsewhere around the world. He pointed to the collaboration between the Korea National Oil Corporation, Korea Gas Corporation and Malaysia’s Petronas on third country oil fields as an example of relationships to come.
Prime Minister Najib reminded the Korean president that Malaysia is thefinancial hub of the Islamic world, and as such is capable of playing the role of financial mediator when Korea starts investment projects in other Muslim countries. He added that the Malaysian government will soon announce development plans for a northern submarine gas field, and he hoped that Korean companies would be interested in participating in the project.
President Lee Myung-bak and Malaysian Prime Minister Haji Mohd Najib bin Tun Haji Abdul Razak pose for a photo before the summit on the same day.
LEARNING FROM EACH OTHER
Both President Lee and Prime Minister Najib agreed on the importance of investing in new technology and applauded the uptick in cooperation between the two countries’ energy departments.
They also noted that the biofuel and solar energy industries had great growth potential and were places where both countries could collaborate in the future. Other industries in which the leaders saw potential for cooperation were biotechnology, defense, nuclear power, finance and tourism.
Prime Minister Najib requested Korea’s expertise in river management, education and expressway development. The Malaysian leader praised Lee’s Four Major Rivers Restoration Project and Cheonggyecheon Stream Restoration Project, and said that he wished to create similar projects in his own country. The two leaders signed memorandums of understanding on both education and expressways, with the hope of sharing knowledge and technology in these areas.
Korea and Malaysia signed the MOU, for the management of expressway and cooperation of development, during the Malaysian Prime Minister’s visit.
Not everything was pomp and circumstance, however. During banquets and less formal meetings, the two leaders were able to bond on current affairs and trade compliments, cementing their relationship.
“We were able to have conversations covering a wide range of fields including economic cooperation between the two countries as well as the situation in the Middle East and the nuclear emergency in Japan,” President Lee said of their time together. “Thanks to Prime Minister Najib’s visit, the two countries have become close in every field, including the economy.”
President Lee described Malaysia as “a model country achieving a stable economic growth” and noted that “such success is very much supported by Prime Minister Najib’s philosophy that puts the people before everything and values action.”
President Lee also praised Malaysia’s Vision 2020 plan that aims for an annual growth rate of 7% through 2020, saying that “it is a very realistic and positive plan and a plan that will surely come true. It will be realized through the excellent leadership of Prime Minister Najib.”
KOREA’S GROWING INFLUENCE
While the Prime Minister Najib had originally planned to stay in Seoul longer, he had to shorten his trip because of the regional elections in Malaysia.
“The visit this time was too short and [the Prime Minister] must come again,” President Lee said at the end of Najib’s trip.
The Korean president, too, had to shorten his visit to Malaysia in December when North Korea attacked Yeonpyeongdo Island. At the time, President Lee Myungbak had expressed his regret for having to leave Kuala Lumpur early and said that he would like to return to the city for a more informal visit.
“[President Lee] had expressed his wish to spend his vacation at Kuala Lumpur and Malaysia, and I will make sure he receives all that is needed,” Prime Minister Najib said. “We could at least play a round of golf together.”
Prime Minister Najib seemed satisfied with the discussions in Seoul and saw many areas for future partnerships.
“I am deeply impressed by the economic growth and diligence of Korea,” Prime Minister Najib said.
“Looking into the future, the two countries have much more new sides to offer to each other and Malaysia too is adopting new technology and innovations,” the Malaysian leader added. “Korea’s development has greatly stimulated Malaysia, and the country is a model Malaysia aims to be by 2020.”
In 1982, Malaysia introduced the Look East Policy and since then has sent a large number of Malaysian trainees to Korea to work. They have returned to Malaysia and spread the knowledge and technology they acquired in Korea. Najib explained that through such processes, the world famous diligent work culture of Korea has been transferred to Malaysia, helping stimulate the country’s economic growth.
But Korea’s influence in Malaysia does not end there. “Korea’s perseverance and ‘never-say-die spirit’ are evident in sports as well,” Prime Minister Najib said. “In the 1960s when I was young, Malaysia used to beat Korea almost always but now Korea surpasses Malaysia by far. Also, Korean songs are now famous too. Even my wife is fond of the Korean girl group Wonder Girls’ song Nobody.”
Korea established diplomatic relations with Malaysia in 1960. Last year, Korea exported US$6.1 billion worth of computers, semiconductors, vessels, steel plates and automobiles to Malaysia, while importing US$9.5 billion worth of LNG, crude oil, semiconductor components and lumber. In addition, Korea has invested a total of US$4.85 billion in Malaysia over the years, sending US$1.71 billion in investments last year alone.
