Seoul (The Korea Herald/ANN) - Korea is compelled to broaden its horizon as far as its business relations with overseas partners goes to more actively woo its Asian neighbors, experts said this week, as President-elect Park Geun-hye is poised to take over the government control tower.
In particular, the nation should be ready to form stronger economic partnerships within the Asian region, whose members are likely to favor Korea over some of their major traditional business allies.
"This is not to say the traditional partners such as the U.S. or Europe should be eschewed. Rather, it should be a two-track policy based on both these traditional partners and our new ones in Asia, as all eyes have been on the Asian region for some time now as the new driver of global economic growth," said Seo Jin-kyu, a senior research fellow at the Korea Institute for Economic Policy.
There had been rising concern as to how Korea should coordinate its overseas economic policies amid an ongoing recession in some of the world's top economies including the United States and the European Union.
Analysts expect the U.S. economy to rebound slightly in the new year. Prospects for the EU, however, are much dimmer, with no signs of the eurozone financial crisis mitigating as Greece still remains on the brink of default and the situation in Italy and Spain not much better.
Due to its orientation in exports, Korea is seen as likely to suffer from the consequences of the anemic global economy. Fortunately, China, Korea's largest market for exports, is forecast to grow at a faster pace next year. The World Bank said the Chinese economy will grow at about 8.4 percent in 2013, up from 7.7 percent this year. The figures were in line with China's own estimates, such as those from the National Academy of Economic Strategy. Conscious of the situation, the Korean government has been tightening its ties with its Asian neighbors. The 10-nation Association of Southeast Asian Nations, for example, which entered into a free trade agreement five years ago with Korea, has become the country's second-largest trade partner following China.
ASEAN is also Korea's second-biggest destination for overseas investments, giving Korean builders their highest volume of construction contracts after the Middle East.
"We may not be aware of it, but our relations with the rest of Asia are becoming more augmented as time goes by, thanks to mutual efforts," Seo said.
But doing more business with Asia won't be an easy job, pundits say, mostly because of the geopolitical issues the nations are enmeshed in. North Korea, for one, cannot be ignored when dealing with Asian neighbors, some of which have friendly ties with the communist regime.
Given the complication of the Asia engagement policies, experts suggest taking a both bilateral and country-to-region approach when doing business with nations in the Asian region.
On the other side of the spectrum, buyers and those who make investments in Korea are looking toward the Korean government to unleash more business opportunities for them by keeping the doors leading outside of the country wide open.
A recent survey conducted by the Korea Trade-Investment Promotion Agency on investors, buyers, government officials and think tanks hailing from more than 20 countries that have business with Korea, including the U.S., China, Russia and Japan, said they wanted to see Korea maintain an open-door policy for its overseas business partners.
More investment incentives are in order, they said, also saying they wanted to see some real change in corporate Korea by having the new president implement realistic policies for creating a more level playing field for all economic players.
"But we've still got far more to go if we want to see more investment pouring into the country under the new government, as there are not enough incentives, not to mention that policy consistency is always a problem whenever there's a change in government," said one industry source, declining to be identified.