South Korea's Yoon says economic co-operation with Saudi Arabia is set to expand

Kingdom is turning from 'simple oil producer to an advanced industrial powerhouse', South Korean President Yoon Suk Yeol tells FII forum

South Korean President Yoon Suk Yeol addresses the Future Investment Initiative conference in Riyadh. Reuters
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South Korean President Yoon Suk Yeol on Tuesday said the country would expand the scope of its economic co-operation with Saudi Arabia, which is looking to diversify its economy.

Countries in the Middle East have continued to show trust in South Korea, even as global uncertainty becomes the “new normal” due to geopolitical challenges, Mr Yoon told the Future Investment Initiative forum in Riyadh.

“Korea has developed advanced industries and digital technologies. Saudi Arabia is now turning from a simple oil producer to an advanced industrial powerhouse,” he said.

Last year, Saudi Arabia and South Korea signed 26 investment agreements worth about $30 billion, covering sectors such as energy, industrial and manufacturing, transport, financial services, ICT, chemicals, environment services, food processing and pharmaceuticals.

In January 2022, Saudi Aramco signed 10 agreements spanning manufacturing, low-carbon energy development and finance with South Korean companies.

Saudi Arabia, the Arab world's largest economy, expanded 8.7 per cent last year on higher oil prices and the strong performance of its non-oil private sector.

Earlier this year, the country received the biggest downgrade in economic growth forecast among the G20 economies by the International Monetary Fund.

The kingdom’s economy is forecast to grow by 1.9 per cent this year, instead of 3.1 per cent as previously projected, largely a reflection of production cuts and lower oil prices.

Growth in the kingdom is expected to pick up to 2.8 per cent in 2024, the Washington-based fund said in its World Economic Outlook update.

Riyadh’s overarching Vision 2030 agenda seeks to further develop the kingdom’s industrial base, broaden the country’s infrastructure and advance sectors including real estate, health and education to create more jobs for its rapidly expanding population.

“Saudi Vision 2030 is not just for advanced industries or industrialisation [but] encompasses other areas such as culture and private sector because private led initiatives are also included,” Mr Yoon said.

“For the last 60 years, Korean companies participated in the infrastructure building and various construction projects and we have built very deep trust with each other,” he said.

On Monday, Saudi Arabia's wealth fund and South Korea's Hyundai agreed to jointly build a car manufacturing plant in the kingdom, with an estimated investment of more than $500 million, as part of the country's push to develop its automotive industry.

The project will be a joint venture between the Public Investment Fund, which will hold a 70 per cent stake, and Hyundai, which will own the remaining stake.

Updated: October 24, 2023, 4:34 PM