Lee's Successful Swing thru Central Asia

The Chief Executive visits Mongolia, Uzbekistan and Kazakhstan and paves the way for Korean firms to win various lucrative natural resources and construction projects in those countries

President Lee Myung-bak's swing through three countries in Central Asia Aug. 21-25 has been considered a great success in terms of Korean companies participating in natural resources exploration and construction projects in those countries.
Included among the Presidential entourage were such business leaders as Chairman Huh Chang-soo of the Federation of Korean Industries(FKI), Chairman Chung Joon-yang of POSCO, and Chairman Koo Bon-moo of LG Group with a number of them joining the entourage in Tashkent, Kazakhstan, the last leg of the Presidential tour.
Leaders of South Korea and Mongolia agreed Aug. 22 to significantly boost resources and energy cooperation and elevate their relations to a "comprehensive partnership" in a symbolic commitment to bolstering ties in all areas, officials said.
South Korean President Lee Myung-bak and Mongolian President Tsakhia Elbegdorj reached the agreement during summit talks in Ulan Bator. After the summit, the two leaders issued a joint statement and adopted a mid-term action plan providing guidelines for bilateral cooperation.
"Endowed with the world's 10th largest reserves of resources, Mongolia is considered a country of limitless potential," Lee said during a joint press conference after the summit, praising the country's democratization and rapid economic growth.
"In today's summit, President Elbegdorj and I agreed to elevate the relations between the two countries to a comprehensive partnership and strengthen high-level cooperation between the two countries, including summit talks," he said.
The resources ministers of South Korea and Mongolia signed a memorandum of understanding (MOU) calling for greater cooperation in natural resource development, electricity, renewable energy and other areas.
The ministers also signed another MOU pledging to work together closely to jointly explore and develop uranium ore and earth materials. Mongolia is believed to have the world's 14th largest deposits of uranium.
They also agreed to set up a joint commission to discuss resources and energy cooperation.
The countries' health ministers also signed an MOU on cooperation in the medical sector.
Other economic agreements included expanding South Korea's investment in Mongolia's infrastructure and construction sectors, including a project to build 100,000 apartment units in Mongolia, and expanding air routes and simplifying the visa process between the two countries.
The joint statement called for the two countries to hold summit and other high-level talks more often and have their foreign ministers meet every year to discuss bilateral relations and other issues of mutual interest in regional cooperation.
It also said that the two countries agreed to expand defense cooperation.
On security issues, Mongolia welcomed last month's talks between the chief nuclear envoys of South and North Korea and expressed support for Seoul's efforts to resolve the nuclear standoff and resume inter-Korean dialogue, the statement said.
The two sides also expressed concern over Pyongyang's uranium enrichment program and agreed that a complete, verifiable and irreversible denuclearization of North Korea is significant for peace and stability in the region and the international nonproliferation regime, the statement said.
South Korea and Mongolia established relations in 1990. Now, South Korea is Mongolia's fourth-largest trading partner, with bilateral trade volume amounting to US$230 million last year, a 85-fold increase from $2.71 million in 1990.
Lee arrived in the Mongolian capital on Aug. 21 for a three-day state visit as part of a three-nation tour of Central Asia, a region that is rich in resources and business opportunities and carries strategic significance as a bridge between Asia and Europe.
Korea and Uzbekistan Aug. 23 signed contracts worth $4.1 billion to develop a gas field and build a pipeline along with a related plant in the Central Asian country.
The agreements to develop the Surgil gas field near the Aral Sea and build a gas and chemical plant will be the largest-ever cooperative project in the energy area between Korea and Uzbekistan since the countries established diplomatic relations in 1992.
The Surgil gas field holds an estimated 4.7 trillion cubic feet of natural gas. Under the gas and pipeline deal, the Korean consortium led by the Korea Gas Corporation, in collaboration with the state-controlled gas firm UNG of Uzbekistan, will jointly develop the gas field near the Aral Sea.
Three Korean firms, GS E&C, Hyundai Engineering and Samsung Engineering, will build a plant near the gas field. The contracts consisted of four separate deals. The gas field and pipeline project was signed between the Korea-Uzbekistan joint venture (UZKOR) and UNG.
The Korea consortium consisting of GS E&C, Samsung Engineering and Hyundai Engineering signed three related pacts with UNG to build a related plant to produce and manufacture ethylene as well as associated facilities.
The two sides signed the contracts on the sidelines of the Korea-Uzbekistan summit held in Tashkent..
President Lee Myung-bak and President Islam Karimov agreed that the success of the ongoing Surgil project will have a positive effect on bolstering economic relations between the two sides.
The leaders shared the view that bilateral ties are expanding into infrastructure building, information technology, the health and medical service sectors and the fabric industry.
The Ministry of Knowledge Economy also signed with its counterpart a memorandum of understanding (MOU) aimed at facilitating industry and energy cooperation.
After the talks Lee joined the Korea-Uzbekistan business forum where business leaders of the two countries met to seek business opportunities, investment and possible cooperation. Uzbekistan is Lee's second stop in his five-day trip to Central Asia. Lee arrived here Aug. 22 after wrapping up his trip to Mongolia where he agreed to bolster ties with resource-rich nation.
South Korea and Kazakhstan Aug. 25 agreed on two $4 billion projects for the construction of thermal power plants and a petrochemical complex in the Central Asian country.
The two projects combined mark Korea's largest investments in Kazakhstan since the two nations established diplomatic relations in 1992. Under the so-called Balkhash project, the Korean consortium consisting of Samsung C&T and the Korea Electric Power Corporation will build two coal-fired thermal power plants with its funding.
The consortium will also operate the plants and provide electricity to the agencies designated by Kazakhstan's government.
An official from the presidential office told reporters, "The Korean consortium will invest and offer technology to build the power plants in Balkhash."
Asking for anonymity for he was not authorized to speak to the media, he expected that the Korean consortium's investments will have a positive effect on future business deals related to the power plant project.
The two countries agreed to come up with supportive institutional measures for the stable operation of the project.
Korea and Kazakhstan also signed a joint venture contract concerning the construction of a gas-chemical complex in Atyrau, a coastal city near the Caspian Sea. The $4 billion project, which aims to build the Central Asian country's first integrated gas-chemical complex, kicked off in March this year.
In the contract, the two sides agreed on elements related to governance of the joint venture, such as the size of investment, shareholders' duties and the structure of the board of directors.
The two also clinched a memorandum of understanding (MOU) on cooperation to finance the project. By signing the two accords, Korea and Kazakhstan laid the foundation to press for the complex project.
Nearly 20 binding and non-binding accords, including the Balkhash and Atyrau projects, were finalized on the sidelines of President Lee Myung-bak's summit talks with his counterpart Nursultan Nazarbayev held here.
Lee arrived Aug. 24 after wrapping up his trip to Uzbekistan.
Lee and Nazarbayev agreed to work closely together to move the construction projects forward. They concurred that the fates of these projects hold the key to economic cooperation between the two countries as the Central Asian nation strives to diversify its industries.
Among Central Asian nations, Kazakhstan has received the largest investment from Korea. Several Korean firms are doing business in the Central Asian country, where per capita GDP is approximately $9,000.
Due to the significance of the country in trade, Lee has held summit talks with Nazarbayev every year since he was sworn in as President in Feb. 2008. The two governments agreed to upgrade bilateral ties to a strategic partnership in 2009.
At the summit, Lee praised the Kazakhstan leader for the decision to participate in the Seoul Nuclear Summit slated in March next year. nw

President Lee Myung-bak shakes hands with President Tsakhia Elbegdorj of Mongolia at the Presidential Office in Ulan Bator during a visit to Mongolia Aug. 22.

(photo from left) President Lee Myung-bak is in talks with President Nursultan Nazarbayev of Kazakhstan at his office in Astana where he arrived on Aug. 24.
President Lee Myung-bak discusses bilateral matters with President Islam Karimov of Uzbekistan at his office in Tashkent Aug. 23.

Photo on Courtesy of MCST