The Republic of Korea is increasingly making its presence felt in Ukraine. Samsung occupies a prominent place on this country’s market of electronics, household appliances, and telecommunications. Another leading South Korean company, Hyundai, delivered 10 Hyundai Rotem trains to Ukraine to cater for Euro-2012, while Kia Motors established an automobile assembly plant here. Moreover, Korean companies intend to take part in the development of liquefied gas terminal in Odesa oblast, the construction of a new subway in Dnipropetrovsk, and the design and manufacture of high-speed trains in Donetsk. In spite of a crisis in the world economy, trade between Ukraine and the Republic of Korea grew by 19 percent to about 2 billion dollars in 2012. This occurs at a time when many Western companies are complaining about a bad business climate in Ukraine and abandoning the Ukrainian market. Next year Kyiv will see a new building of the South Korean Embassy because, as Ambassador Kim Eun-joong said after the interview, there is too little room at the current premises on Volodymyrska St. What can explain South Korea’s success on the international arena? How did it manage to overcome corruption? Why are Korean companies not afraid to do business in Ukraine and what sectors do they think can be the best for cooperation with our country? These questions are the subject of The Day’s interview with KIM Eun-joong, the Ambassador of the Republic of Korea to Ukraine, who has noticed a lot of similarity between our countries and peoples.
The Korean peninsula periodically becomes the focus of international media, first of all due to nuclear and missile program of North Korea. Which prospects do you see for the solution of this problem?
“Nowadays, North Korean nuclear program is a serious challenge for the global nuclear non-proliferation and it is destabilizing the security situation on the Korean Peninsula and its neighborhood. One of the main objects of South Korean foreign policy is to keep North Korea from developing its nuclear programs, along with its neighboring countries like the United States, Japan, China, and Russia.
“As you may know, the Korean Peninsula is surrounded with big four neighbors, they have common interest in the dismantlement of North Korean nuclear program, and eventually for the denuclearization of the Korean Peninsula. Since 2003 the so-called six-party talks on North Korean Nuclear Issue had been held with the participation of the United States, China, Japan, Russia, and South and North Koreas. The six-party talks produced the so-called 9/19 Accord to North Korean denuclearization in 2005: North Korea agreed to dismantle its nuclear program in exchange for fuel assistance and steps towards the normalization of relations with the United States and Japan. Since then, North Korea has not shown the sincerity in implementing the agreement with other five parties yet, but instead conducted three nuclear tests along with test launch of its long-range missiles, which has become the source of tension on the Korean Peninsula.
“Recently these five countries work closely and hard to bring North Korea back to the negotiation table. During the course of the six-party talks and their diplomatic efforts for North Korea to implement the Agreement to its nuclear issue, China and Russia have been playing a constructive role: they support the 9/19 agreement and have been continuously calling upon North Korea to return to the negotiation table. We hope North Korea listens to the calls from its neighbors to promptly give up its nuclear program through the mutually constructive talks with its neighbors. So, in this context, the new government of South Korea has proposed to North Korea to resume the inter-Korean dialog as well as to return to the negotiation table on the North Korean nuclear issue. “I hope that North Korea returns to the dialog with its neighboring countries about its nuclear issue, which will be an important vector for the security in this region.”
China recently declared that it would ban export of weapons to North Korea and from the other side, Japan expressed some concerns about role of the United States in this region under Obama administration that is weakening. Will these two tendencies help weaken the role of Obama’s administration in this region and on the other side, Chinese decision to ban export of weapons to North Korea?
“Our four neighboring countries including China and Japan share common goal: dismantlement of North Korean nuclear program. China has implemented the relevant UN resolutions on North Korean nuclear programs and its long-range missiles. Recently Beijing even unveiled its export control on those dual-use materials on nuclear programs in North Korea. It is a very effective sign of applying diplomatic pressure on North Korea to return to the dialog on its nuclear issue. And Japan has been very active in theses efforts, because Tokyo is seriously challenged by North Korean nuclear problem. Both China and Japan are worried about the chain reaction of nuclear spread on the Korean Peninsula and in the region. Especially as it does not possess any nuclear arsenal, Japan has a vital interest in checking North Korean nuclear program. I don’t think Beijing and Tokyo have any discrepancies in their common goal of North Korean denuclearization. Nowadays these five countries of the six party talks work closely together through various diplomatic channels for the eventual settlement of North Korean nuclear issue.”
Recently, President of Ukraine Mr. Yanukovych stated at the General Assembly of UN that they need to have the next summit on non-proliferation.
“In 2010, Ukraine attended the first nuclear summit hosted by the United States in Washington DC. It unveiled its commitment to giving up all enriched nuclear uranium. And last year, when South Korea hosted the second nuclear summit, Kyiv contributed to enhancing the nuclear security mechanism by fulfilling the commitment to transferring all enriched-uranium materials to Russia.
“So, I think that it is quite natural for Ukraine to initiate holding of international conference on further non-proliferation on nuclear weapons. Ukraine had already given up all the nuclear arsenals shortly after the break-up of the Soviet Union. And it is firmly committed to nuclear non-proliferation and abides by all international codes on nuclear programs. So, I think Ukraine deserves to play a very important role in achieving global common goal of nuclear non-proliferation. In this context Ukraine has called on North Korea for implementing its non-nuclear commitment and the suspension of its long-range missile program, which has been threatening the global disarmament and nuclear non-proliferation regime.”
Is, in your opinion, the reunion of North and South Koreas possible, like the case of the German reunification in 1989, and when can this happen?
“As I already mentioned, South Korea has been making every effort to promote the peaceful coexistence and peaceful unification with its northern brotherhood. But North Korea unfortunately has been rejecting inter-Korean dialogue unlike East Germany with regard to the West German Ostpolitik. But South Korea has never given up its ultimate goal of peaceful unification. As I earlier explained, the new administration has unveiled its bold initiative so-called Seoul trust process, which aims to build and regain trust between the two Koreas based on a solid foundation of national security, by establishing peace and laying the groundwork for unification. Seoul trust process is to promote a peace and security on the Korean peninsula in a clear and consistent manner that North Korea should show the sincerity in the inter-Korean dialog and cooperation. So, I hope that the German model may be emulated on the resolution of the inter-Korean issues.”
Many countries, including Ukraine, are faced with such problem as corruption. Your country has also suffered from this illness, but it succeeded in addressing this problem. Tell us, please, how did you manage this?
“I think the issue of promoting transparency is a continuous process for the government and people of my country. There are many bright aspects in successful tackling of corruption, but we are not satisfied with the current level of transparency yet. So we are continuously promoting transparency to eradicate corruption and bribery. Even the two former Korean presidents were imprisoned for corruption. And the new government enacted a new law on enforcing these two former presidents to pay back all the money which they received illegally during their presidency.
“And in this area I may give a credit to Ukraine’s effort to fight corruption and bring more transparency into the government and society. But those issues cannot be solved in a day. Like South Korea in the past and now, it is a continuous and painful process. Recently it is noteworthy that the Verkhovna Rada passed an anti-corruption law last week [The interview was taken on September 25. – Author]. It is one of the good examples to this effect. The Ukrainian government has also implemented important administrative reforms, including measures like e-government, e-customs, and zero tax evasion. So, I think Ukraine is following a similar track which South Korea has taken for tackling these issues. They cannot be solved by only the government but with the participation of your whole community. I hope Ukraine might be another successful model on bringing down this social illness like South Korea did in the past.”
The previous Korean Ambassador said that Ukraine was interested in functioning of Korean “clean government.” Do you see such interest of the current Ukrainian government?
“Yes. As I already mentioned enough on the clean government, I would like to return to the e-government issue as one of its effective policy tools. As you know, South Korea is one of successful models of e-government. The e-government is introduced in Ukraine as well. You are now enjoying the benefit of the electronic passport control, when you enter or leave your country at the airport. When I was here in 2011, it took more than 40 minutes for immigration, but now it takes just 2 or 3 minutes. And it takes only 30 minutes to clearing the customs of the containers in your port. It took a week or even longer three years ago. They are the bright aspects of those e-governments.
“The Korean government has been willing to support Ukraine in the field of e-government. South Korea has invited a number of Ukrainian officials, politicians, and scholars for the training program on e-government. The Korean government established two IT centers here in Kyiv to help Ukrainian students to be acquainted with e-government. In the banking and financial sectors South Korean telecommunication companies are now helping Ukrainian companies and banks to introduce Internet banking, which will enhance the competitiveness of the banking sector. I hope Ukraine will follow those advanced countries for reducing bureaucratic burdens and enhancing effectiveness and competitiveness. I also noticed that central and regional government is quite eager to apply more e-government. Hopefully, Ukraine may keep tandem with its Western neighboring countries in these areas as well.”
I have read that in Forbes list there are 50 Korean oligarchs. What role do they play in your country, do they interfere in politics or try to push some laws through the parliament?
“Recently I had several interviews with local press on the role of South Korea’s ‘big companies.’ We do not call them oligarchs, because Korea’s big companies are managed and controlled by experts while owned by family. So they are quite different from Russian or Ukrainian oligarchies, where all the control and management are concentrated by one or a few owners. The successful development of the Korean economy is attributed to two vital factors: development of human resources as well as open and export-driven economic policy for the last several decades. And especially those big companies have played a key role in promoting trade with foreign countries and enhancing the competitiveness of those key sectors like automobiles, electronics, and shipbuilding. The rule of the size of economy tells that they can be achieved only by big companies, because the small- or medium-scale companies don’t have any competitiveness in the sphere.
“Another issue is the relations between big corporations and small- or medium-scale companies. The Korean companies have developed a unique way of cooperating with each other. For example, Korean automotive industry cannot compete with foreign makers without the quality and price advantages, which can be achieved by chain of part suppliers, dominated by small- and medium-scale companies. So, this is a very harmonious model of business cooperation.
“Of course, we have a growing problem with the concentration of wealth and influence by big companies which might dominate the whole economic and social domain of the country. With the sense of urgency, our current government has introduced an economic democracy, which promotes the role of small- and medium-scale companies, while encouraging big companies to cooperate and coexist with them. In terms of the division of labor, there are certain areas not reserved for the big corporations but for small- and medium-scale companies. That is one of the key economic policy priorities under the current administration. And I am confident that the economic democracy may promote economic competitiveness as well as fairness and transparency of the society. This new economic regime may enable South Korean economy to better deal with the current economic uncertainties ensuring the competitiveness in the world market.”
When I speak with Western diplomats, they usually talk about worsening of business climate. What is your opinion on it? Is it easy for companies from the East to work here, or not?
“In the Soviet bloc, the role of private companies used to be severely restricted. As a newly independent nation, Ukraine had faced a host of issues to be solved and dealt with for ensuring effective governance of your administration and economy. One of the biggest hurdles with doing business here in Ukraine might be the bureaucracy and regulations, restricting effective and smooth functioning of the economy. As I mentioned, it took more than one generation to deal with these issues in Korea, facing newly independent countries in common. Each country may not depart from traditional ways of governance over night without risking political and social stability. There should be a long way of learning. But if it wants to bring its economy to the advanced level, it should overcome severe constraints: excessive regulation of capital, inexperience in the market system, over-reliance on certain sectors like steel and fossil fuels, and urgent need for diversification of industry. These are quite common for newly independent countries. Korean companies, which helped to develop the one of the least developed countries to the one almost near to entering into the advanced economy over several decades, might have the advantage in doing business in Ukrainian market. They know how to deal with those obstacles as they did it in other developing countries.”
Your companies are not afraid of this climate because we see last year Hyundai company come here with trains and Samsung is very much present, so you are not afraid of all these problems.
“As for the strengths and advantages of the Korean companies doing business here in Ukraine, I would say that they are very active in exploring new markets in developed countries as well as in emerging markets. Many Korean companies are doing business in the CIS including Ukraine. I think there are several fields here where Korean companies are quite active.
“First, Korean companies are very active in IT and telecommunication. One of the good examples is Samsung Electronics which is now operating two R&D centers in Kyiv and Kharkiv. When I came here two and a half years ago, the number of Ukrainian researchers at the R&D centers was just 200. Now it increased to 1,400 and will expand up to 2,000 by the end of next year. They have helped Samsung Electronics to maintain global leadership in IT industries. And I hope other Korean telecommunication companies may follow Samsung’s model for utilizing the talented pool of Ukrainian researchers and developing their IT or telecom-directed research.
“Second, as for the field of manufacturing, recently the South Korean automobile companies started assembling passenger cars through the SKD or CKD in Ukraine. They may maintain their competitiveness and also contribute to the development of automobile industry here. And as for Hyundai Rotem’s high-speed trains, I think they are one of very important contributions to the successful hosting of the Euro-2012 here. Although there was just one month run test when usually it takes more than a year for a test run, now 10 trains are running very well. And they also help to improve the railroad infrastructure, because those high-speed trains require a high standard of railroad infrastructure. The co-production of HRCS2, a high-speed train, along with commuter trains in Ukraine might improve the ailing railroad infrastructure by replacing the old trains and wagons. South Korean companies are very interested in the infrastructure areas like the construction of subway and bridges in Ukraine as they did in other CIS countries and in the Middle East.
“Third, one of the promising fields for the role of South Korea might be agriculture. South Korea is importing grain from Ukraine. Furthermore, South Korean companies are eager to invest in agriculture by growing grain or building agricultural infrastructure like construction of elevators or grain terminals. So, hopefully cooperation with South Korea may help Ukraine to become global number two in terms of grain export.”
Ukrainian space launch helped carry three of your satellites into space. Could you explain the reasons why did your country prefer Russia over Ukraine as a partner in construction of rocket carrier Naro-1?
“I know that during the Soviet time Ukraine was the global leader in developing space programs, especially rocket and satellite engineering. I have been fortunate to witness the development of Ukraine’s space program. Ukraine’s space industry commercially exploits these space programs. Now Ukraine is actively courting global cooperation with other space countries like the United States, Russia, and Brazil.
“On the other hand, South Korea’s space program is in the naissance stage. So it needs foreign partners to develop Korean first standard rocket. Only after South Korea signed the contract for space cooperation with Russia, the Ukrainian side belatedly made a similar proposal. As the contract was already signed, there was no way for South Korea to replace this space cooperation with Russia.
“The cooperation in the field of space programs between South Korea and Ukraine is conducted in several ways.
“First, after the successful test launch of Korean standard rocket took place last February, the South Korean Space Agency proposed cooperation projects to the Ukrainian partners for the second stage of the Korean standard rocket development program. I believe that the cooperation with Ukraine will be fruitful in terms of the South Korean space program.
“Second, Ukrainian space company Kosmotrass has put South Korean multi-purpose satellite to orbit last August. Two more South Korean satellites will be launched by Ukraine in the framework of Dnipro Program.
“Third, there is also another aspect in space cooperation: development of the next generation ultra-small satellite and mobile telecommunication through satellites. As the space program requires big investments and the latest cutting-edge technology, there are common grounds for cooperation between South Korea and Ukraine in the field of space programs.”
Your country was visited by three Ukrainian presidents. When can we expect the visit of your president to Ukraine?
“We have maintained a high level of human exchanges in every sector. Last year your president visited my country in the context of the second summit on nuclear security, hosted in Seoul. I hope that the new president of my country will pay a return visit to your country soon. One of my main assignments here is to pave the way for the visit of the first female president. To this effect I am actively fostering cooperation and partnership in various areas between our two countries. In early October the speaker of the National Assembly is going to make an official visit to your country. I hope his visit will also promote a high level of bilateral contacts.”
Our countries have almost the same population. Do you see any other similarities between Ukraine and Korea?
“Actually, we share similar characteristics. We are surrounded by big countries, big neighbors. And our two peoples are peace-loving and very friendly to foreign visitors. And they are also very bright and talented, and boast of their human resources. And they are very open-minded. They like traveling abroad, and they don’t have any fear in visiting foreign countries. Our countries both have one of the highest levels of immigration.
“Many point out that our two peoples are very open-minded, when making friends, and those friends are never easily forgotten.
“One of my imminent assignments is to achieve visa liberalization. After two foreign ministers signed an important agreement on lifting the visa regime for official passport holders three days ago in the sideline of the UN General Assembly, we are now aiming at visa liberalization for ordinary passport holders. Hopefully these will promote human contacts and exchanges, which are essential for friendship and relations on a higher level.”
What did you know about Ukraine before coming here, and how did this vision change?
“Ukraine is historically situated on the European crossroads, between civilizations, with the European Union to the west, the Russian Federation to the east, and Turkey to the south. Taking a pessimistic view, you might be overshadowed. But when you take a more positive view, outdoor-looking, you see great benefits from making more ties, trade with the neighboring countries. Same as we do with my country. We are divided, as you know, and surrounded by big countries (just like Ukraine). But we never thought about our geopolitical situation as our weakness. We have taken advantage of our geopolitical situation by doing more trade, more human contacts – the same way as Ukrainians do. I think Ukraine has a better prospect for the future. You may learn from those lessons during the course of the development of your country. The bright future is always ahead of you. This is my advice, from my respect and friendship for you, because we share many similarities, as I have already mentioned.”
How does your country see that Ukraine is trying to sign the Association Agreement with Europe, and Russia is trying to put pressure on Ukraine to change its mind and join Customs Union?
“I don’t have any doubts that Ukraine will take advantage of its strategic geographical situation. You always make good friends with the European Union, as well as with the Russian Federation, because both Russia and the EU need you for common prosperity in this region. So the more democracy, openness, and development in Ukraine will be crucial for the prosperity in this region. I am pretty sure that Ukraine is going to be a very important factor for the peace and common prospects of this region.”
How do you get information about what is happening in Ukraine? Through which mass media?
“Actually I read several newspapers every day. I am a regular subscriber to The Day, Segodnia, Interfax, Ukrainian Journal and Correspondent, along with several English journals. And I watch Ukrainian TV every night. And the press is quite frank and friendly, as we enjoy a conversation with each other. I also receive very valuable authentic information and views from my diplomatic sources. I don’t have any problem in communicating with Ukrainian people and community. And Ukrainians in many ways express their views. It’s a country with a bright future and prospects of development like those of South Korea.”
