NEW FRONTIERS; Korea’s Trade with Africa

NEW FRONTIERS; Korea’s Trade with Africa

Like many other countries in East Asia, South Korea has developed rapidly in the past four decades through an export oriented growth strategy. Korea’s development and investment in education has put the country at the forefront of technological development. To sustain growth, most Korean companies have outsourced parts or their entire production processes to many countries in Asia and South America. With an ever increasing wage bill in Asia as many countries continue to grow, and the recent election of Donald Trump to the US presidency (one of his campaign promises was to scrap the NAFTA and renegotiate all trade deals signed by the US including the US-KOREA FTA), it is time for South Korea to pivot towards Africa.

Africa offers some exciting opportunities for trade and cooperation with South Korea. A lower wage bill and a youthful population provide an attractive option for Korean companies as they look to maintain their competitive edge in the global market. It is imperative that companies keep their costs of production low, as they face stiff competition around the world. Costs of living and other expenses have increased calls for higher wages across many Asian countries. It is time for Korea to look towards Africa for cheaper labor to maintain its competitive edge.

Another important point is the growing demand for ‘sustainable’ technology in Africa. African countries continue to grow, and contrary to early developers who had little regard for the environment, the emphasis is on sustainable development now. Korea is in a unique position to provide the technology required for sustainable development. Korea’s Green Growth drive has seen a huge investment in green technology in the past decade, which can be readily made available to growing economies in Africa. Recycling technology is one such area in which Korea leads for the world to follow.

To sustain economic growth, Korea also needs a constant supply of raw materials. There is an abundance of raw materials in most African countries, and pivoting to increase trade with Africa will give Korea access to raw materials needed by most of their companies. There is no doubt that a growing middle class and an expanding private sector in many African countries will provide a market for Korean products.

China, the US, and Europe have had a longer history of dealing with many African countries. However, Korea’s history and rapid development presents an example that many new governments in Africa would love to follow. Most new governments will be looking to break the hooks of neo-colonialism that Europe has had on Africa through their multinationals. Korean companies will provide a fresh start for most governments, and a trustworthy partner in the development process.

Increasing trade with Africa will be mutually beneficial to Korea and many African countries.

Is deepening trade between Africa and South Korea in the interest of the parties concerned? 

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