South Korea as an important factor in politics in Central Eurasia or that the world should not always be divided into black and white
When it comes to international investments, large projects, corridors, it is customary to first consider the positions of countries and communities that are involved in geopolitics. They are all heard.
However, there is not the largest state, judging by its territory, not the most influential, if we are talking about the so-called. “geopolitical projects”, nevertheless, it is economically present throughout Central Asia, and here in Russia its influence is clearly visible - South Korea (Republic of Korea).
In June, South Korean President Yun Seok Yeol made a long tour, during which he visited China, Uzbekistan, Kazakhstan, and Turkmenistan. Before this, there were delegations to Tajikistan, and South Korea has established ties with Mongolia that allow Seoul to compete with Beijing in this country.
Historical presence
It cannot be said that such cooperation was not historically conditioned. He had his own reasons. Thus, in Mongolia, Uzbekistan and Kazakhstan, Koreans are long-standing and stable diasporas formed even before the formation of the USSR or at the very beginning of its formation, i.e. long before the division into two Koreas. The majority of Koreans arrived in Kyrgyzstan a little later - in the mid-1950s.
In Uzbekistan and Kazakhstan, Koreans today have a decent weight in trade, catering, and work in joint ventures with Korean capital.
The presence of the Koreans should not be surprising, since it was also due to trade ties between Qing and Russian Manchuria and the region, which as a whole was called Turkestan at that time. In this case, this name reflects the macro-region, and not the state affiliation with division into Eastern, Western, Russian, etc. Turkestan.
The full penetration of Korean diasporas into Turkestan occurs somewhere in the last third of the 1920th century, and into the territory of modern Kazakhstan - since the XNUMXs.
By the way, in the 1930s the Japanese brought large contingents of Korean labor to Sakhalin Island. After the end of the war The Japanese left, but a significant number of Koreans remained.
So Koreans in Central Asia are not an exotic thing of the new era, but quite an old part of the social landscape.
Yes, diasporas were and remain small relative to the total population (120–130 thousand people each in Uzbekistan and Kazakhstan), but they control some areas of trade, including not very official, and also rely on their eastern small homeland, which is actively invests and builds.
In general, after the full opening of borders in the 1990s, South Korea had someone to work with in Central Asia and through whom, another question is what to work with and according to what strategy.
Korean model in the 1980s
The fact that geographically tiny South Korea in the 1990s was already emerging as a kind of technological giant was reflected in the names “Four Asian Tigers” or “Little Dragons.” If the big dragons are Japan and China, then South Korea is the small dragon.
Among other small dragons (Singapore, Hong Kong, Taiwan), South Korea stands out for the breadth of its industrial complex, which has everything from shipbuilding to microelectronics.
At the same time, unlike Hong Kong and Singapore, South Korea has never been an analogue of a financial hub, but investments, trade intermediation, settlements and financial transactions make a significant contribution to the economy of Hong Kong, Singapore and even Taiwan.
A lot of scientific journalism is devoted to the South Korean phenomenon. Traditionally, the rise of South Korea up the economic ladder is associated with US investments and the development of the so-called. “chaebols” or Asian-type industrial corporations with a high influence of the family factor in management.
For a long time, the financing of these corporations really depended to a significant extent on international banks and the government’s position in terms of benefits and subsidies, so in the 1960s and early 1980s they did not yet represent a classic oligarchy, unlike full-fledged financial industrial groups in neighboring Japan. Unlike the Japanese, they were not encouraged to create their own financial blocks. In the end, this even worked as a plus.
No matter how much we read about the “Asian method” of production, “chaebol”, US investments in the military-industrial complex of South Korea and industry, we will still see that the full growth of Korean exports begins only in 1981, then sharply picks up the pace in 1986–1988 gg., then again a sharp jump in 1994–1997, which ends with the general crisis of Asian economies, primarily South Korea and Japan.
What, exactly, happened that for twenty years the United States seemed to be making a capitalist showcase out of South Korea, especially under the conditions of the Cold War and the division of the peninsula into two opposing systems, but the results, unlike Japan, were visible in the 1960s and 1970s relatively weak, and the breakthrough occurred only in 1981?
Let us take into account that South Korea did not have such a connection with American finance as the Japanese did, and the authorities did not encourage future Korean industrial giants to create their own financial centers - they were afraid of corruption.
In the late 1970s, South Korea changed its economic model and let its “chaebols” not just float freely, but made their work quite a lot easier - they received complete freedom to enter international lending markets (like purely industrial enterprises) and almost complete freedom to import everything that is required for the production of high-value products.
Any raw material in maximum quantity, subject to minimum price and maximum markup on the final export high-tech product. Given that South Korea even has its own resource base (coal, metals), priority is given to imports and the price of imports.
Only a few industries, such as rice farming, are fundamentally excluded from such policies. At the same time, again, chaebols never become banking corporations. Corruption eventually penetrates to the very top of Korean politics, but the initial impulse to work as industrial corporations, and not financial-industrial groups, has done its job.
Considering the ideological and political camp South Korea belonged to, it was clear that Seoul was not threatened with sanctions or restrictions, but it was possible to develop the technology sector and highly profitable industry relying on Western technologies - the workforce was numerous, and relative to Japan and cheap.
There were so many advantages for Western investors that even imports from the USSR or through various channels from Mongolia or the North. The Koreans closed their eyes. In Japan it was more expensive to produce, the Japanese grandees, as full-fledged financial and industrial groups, asked for high shares, in China the communists...
In general, there are many favorable factors on the Korean Peninsula.
Three industries were the drivers of growth at that time - automobile manufacturing, shipbuilding and electrical engineering. This is what Seoul emphasized.
Here it should be especially noted that the Koreans have been investing in shipbuilding since the beginning of the 1970s, and have steadfastly and stubbornly withstood the oil crisis with a drop in demand for pledged ships. They not only did not give up, but also turned it to their advantage, expanding the construction of container ships, bulk carriers, and later mastering gas carriers. But the most important thing that Seoul did was to raise its own engine production in a short time, surpassing China in quality and Germany in price.
However, there was another far-sighted Korean decision - the development of its own energy sector, primarily nuclear energy, and (unlike the Japanese) with an eye to export. This not only provided Seoul with generation, but also made it possible to grow with unique technologies and competencies. After all, few people in the world build custom nuclear power plants, and the Koreans themselves use and build nuclear power plants for customers - now in Central Asia, Korean ones compete with our nuclear power plant projects.
South Korea in the 1980s is a textbook example of effective globalization and liberalization. It’s just a showcase – an illustration; another thing is that not everyone in the world could afford this liberalization and globalization. It was not intended for everyone - South Korea has fit into globalization.
The growth limit for the Koreans, like many Asian dragons and tiger cubs, came in the mid-1990s, when the Asian stock bubble began to deflate sharply. They were simply pumped with money, not really understanding that the European and American markets also have their own limits in terms of competition, profitability and consumption.
Reform after the crisis and the wrong side of globalization
The result of this was the second reform of the economic model of South Korea, which was based on the rational grains of the previous model. There were no longer any Cold War restrictions, but the position of searching for the minimum price with freedom of import automatically began to link South Korea in production chains with China, Japan, Taiwan, Vietnam, and Malaysia.
In theory, all of them were competitors for Seoul in one way or another, but that same globalization gradually leveled out the “partner-competitor” division. Our colleagues in the Asian workshop did exactly the same thing - we order what we need from a competitor, sell something else to a competitor, in the third place we push for a buyer, in the fourth we divide the buyers' markets by industry and subsegment.
At the same time, there were no longer any restrictions on the supply of raw materials - raw materials could be taken from Russia, the Middle East, Central Asia, and Latin America. It was possible to take it, but others could have taken it too. However, Seoul had its own trump cards up its sleeve: for raw material producers, these were orders in shipbuilding, and these were Qatar, Russia, Saudi Arabia, Algeria, Mexico. And for the countries of Central Asia, Latin America and Russia, these were the same electronics and auto industry in the average (relative to Japan, USA and Europe) price segment and with above-average workmanship.
The Koreans were initially able to provide the best offer in the middle price segment – the most in demand in the 1990–2010s, and maintained their position almost until the present time, until they were supplanted by the Chinese.
The bonus was that South Korea was initially aimed at creation of joint assembly plants with high localization, based on the understanding that raw materials will sooner or later come cheaper to South Korea.
All this was very different from the models of its Korean neighbors.
The Chinese model is the principle of “everything goes into the house”. All joint ventures with Europeans and Americans are in China. Where to get technology? That’s where they take it, from their pale-faced Western partners, but in the end this greatly influenced the plans of Chinese expansion - the Chinese build high value-added joint production outside their country with great difficulty.
The Japanese model is participation in all large raw materials projects in small packages, the opportunity for partners to receive technology, but since the basis of Japanese monster corporations is no longer the production sector itself, but the financial and industrial sector, the approach is appropriate - a little bit everywhere.
Hong Kong and Singapore are, first of all, huge trade and financial hubs, Taiwan is a specialty. But South Korea brought production along with training to the country of its deployment, and built a separate dealer network, and even in a segment that was the most widespread for many countries in the “middle world.”
The addition of the electronic communications industry to the portfolio followed a well-established pattern, building on the advantages obtained before. And the scheme is still working, even despite Covid and SVO.
Features in Central Asia and Russia
If in terms of direct investments in Central Asia the European Union is number one, China is second, and Russia is third, then in terms of the number of industrial joint ventures operating, the leader in the region is... South Korea.
Wherever you look on the map, we will see everywhere: a plant for assembling household appliances, the participation of Koreans in a greenhouse project, another thermal power plant, a joint venture in the mining sector, or an automobile industry enterprise.
The leader here is traditionally Uzbekistan, but Kazakhstan is not far behind. China still invested more in trade and logistics, we in trade and oil production, and in Uzbekistan a little in petrochemicals and gas. Europe, of course, is into oil and gas, metallurgy. As a result, the cumulative total of investments: EU – $105 billion, China – $60 billion, Russia – $45 billion.
South Korea has approached the $20 billion mark. At the same time, the actual trade turnover of South Korea with Kazakhstan and Uzbekistan is relatively small - 4-5 billion dollars a year, and the main thing in it is metals and rare earth metals, gold, platinum.
Kazakhstan is generally a natural storehouse of the world metallurgist with its prizes in nickel, manganese, titanium, zinc, molybdenum, chromium, and even uranium.
How to compete with the European sharks, who bought up some areas in Kazakhstan in the 1990s? That's it - by moving out production facilities and actively building joint ventures.
Interestingly, unlike their Japanese, Chinese and even German colleagues, the Koreans are not very worried that the production of components is moving to other countries. They even calmly exported the production of communication electronics (same smartphones) to China, India, and Vietnam. US pressure applied pressure, but in the end the Koreans abandoned Chinese production.
At home, they go further along the chain of maximizing profitability, importing either pure raw materials or the most technologically advanced components to their production in South Korea. But a lot is produced outside of South Korea.
Stupid claims from the same Ukraine as China, South Korea, Vietnam, India, etc. They supply the same “Korean chips” to Russia through intermediaries - this is an echo of this model.
How can they (the Koreans) not supply their production, well, sometimes with some reserve. And there it’s not far from “the washing machines from which the Russians remove chips for the production of missiles.” The narrative is really stupid, but it has a certain basis - this is the Korean model as such. Components for dozens of joint productions move like schools of fish across the oceans.
The South Korean model for Mongolia, Central Asia and, needless to say, Russia turned out to be one of the most attractive and profitable. At the same time, the traditional analytical comparison of “who trades more money and with whom” works here with some difficulty.
The Koreans receive significant profits, and here we need to look not so much at the flow of goods, but at the movement of capital associated with it, because the actual flow of goods converted into money is not as high as in the situation with large global players.
A paradoxical situation is created in which formal trade turnover is not leading among other countries, South Korea’s dependence on Central Asia for valuable raw materials is high, but political influence in the region far exceeds the influence of even such monsters as the EU, second only to raw material producers from transnational corporations.
The next paradox associated with the underside of globalization is that, despite all the political unity of Seoul and Washington, the current economy of South Korea is based primarily on valuable raw materials from Central Asia and the production chains of Southeast Asia, led by China. Cross trade with Southeast Asia - 50%, raw materials from Central Asia.
Friendship with the United States is not friendship, it is love, it is hostility, but economic ties look this way and not otherwise. And the most unnecessary thing for Seoul here is to enter into some kind of sanctions, especially military confrontations. With whom? From North Korea, with China? Help the US “defend Taiwan” and the Philippines defend the shoals?
At the same time, Seoul is regularly developing its military-industrial complex, fighting for the competencies and technologies of the future. That is, they will always nod their head to Washington in Seoul, they will deploy a missile defense system, they will supply shells, but there are a lot of pragmatists here, not politicians - Turkish self-propelled guns are made on the basis of Korean ones, Poland is an active buyer of the Korean military-industrial complex, etc. Despite all the friendly rhetoric Seoul has many real borders with the United States, before which they say stop to American ideas. So Seoul will take part in some exercises, but for example, it will not defend Taiwan or the shoals in the Philippines.
South Korea is in fact an implicit, but very important potential mediator, a kind of balancer in Central Asia, which can balance the influence of any major player, be it us, China, the EU and the USA, but more importantly, it can balance transnational sharks
And all this is completely without pathos or any kind of information “pump”. Characteristically, Seoul also works as a kind of soft power, inviting representatives of Mongolia, as well as Central Asian states, both to study and as labor migrants. True, the control there is not like ours, the Russian one.
Catholic factor
There is another interesting circumstance that is usually paid little attention to – the relationship between Seoul and the Roman Catholic Church.
These relations are truly complimentary, but they are based on a broad social base - Catholics in the South. Korea 11% of the population, more than 5 million people. For Asia, this is the first place in percentage terms, and for the Vatican, South Korea is now the reference point.
At one time, Rome seriously damaged relations with Beijing because it relied on Taiwan. Relations have not yet been fully restored, and every time the Vatican tries to fix this, some insurmountable obstacle arises.
By the way, it is possible that such specific “theological discussions” are taking place within the depths of the Roman Catholic Church itself. How else can we explain that before the rare opportunity for Pope Francis to meet with Xi Jinping in Astana a year and a half ago, another spy scandal arose.
The Vatican has very few flocks in Central Asia, and Catholic prelates do not abandon their intentions to build their own analogue of a “corridor of influence” from West to East. Here, South Korea literally represents for them a springboard for influence in Central Asia and connections with China, where Catholic bishops are in the full sense under supervision and walk around with a party card under their cassock.
About flexibility and breadth
It would seem, as the classic used to say: “How many divisions does dad have?” There may be few divisions, but there are many different levers. And how to use all these political gears depends on the breadth of vision and flexibility of mind.
In our country, they often point with some malice at Kim Jong-un with his nuclear missile and no, no, but they will write that just, they say, move South Korea, pro-American puppets, ammunition suppliers (everyone knows who), they will come to you.
But let's take another dimension. Here is a paragraph from one past material “Why does the Vatican also need Mongolia”:
The fact is that L. Oyun-Erdene worked in a structure called World Vision International (WVI). This is a very specific transnational organization that deals with charitable projects under evangelical flags. But projects are projects, and in essence it is a friendly and, even moreover, partner structure in relation to the so-called. Christian Fellowship and the Prayer Breakfast movement in the USA.
This is an extremely influential conservative political group in the USA, but they are Christian evangelists, literally “right-wing evangelists”, and in the current scenario they are even “Trumpists”, although in the USA liberals use a different term for them - simply “fascists”.
Russia has no direct points of connection here, although in our media many efforts are being made to show that Trumpism is something close to “conservative Russia.”
Who and how can influence various political alignments and economic projects?
Our relationship with China is not in the “any question at any time” style; Trumpism is essentially superficial, and there is nothing pro-Russian in Trump’s program. On the contrary, as if with his victory the relationship did not become more tense.
But through South Korea, which for Mongolia, locked in the depths of Central Asia, is a natural gateway to the world, it is possible to influence.
Where is Mongolia and where is the USA?
In the same place as prayer breakfasts - it just seems something funny and absurd.
But South Korea does not want to fall under sanctions or criticism - the Vatican and its interests already exist for this. How to beat this is a matter of approach and flexibility of thinking. We need, among other things, in Mongolia - a railway, uranium deposits, gas projects, a solution for a hydroelectric power station on the river. Selenga.
This is just one example, and there may be more than one or two - more. There are many figures in the game, even unexpected ones. It just seems that the whole world revolves around three geopolitical pines.
The current time gives rise, among other things, to another misfortune. It lies in the fact that there is a desire for simple schemes, division into ours and others, correct and not so correct. Divide by two.
In this regard, South Korea for us is, at first glance, in the opposing camp. If we succumb to the temptation and divide everything, then we may be left not only without the ordered gas carriers and a number of important components, but also acquire a rather serious enemy player in terms of influence, who is in the shadows, but has the most serious influence on Central Asia and its resources.
With South Korea, we need to play our own separate game - not to aggravate relations, not to escalate the situation, to coordinate rhetoric and co-opt Seoul for behind-the-scenes work in gray markets. The South Korean model fundamentally allows this, and here you can take the most unexpected fellow travelers as allies. By the way, a significant part of Central and Southern Africa is Catholic.
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