Korea foresees jackpot in Libya after Qaddafi

The government and private sector companies are moving swiftly to grab business opportunities in Libya, where rebels are reported to have taken over Tripoli, the country’s capital, signaling a possible end to a six-month war to oust the Muammar el-Qaddafi regime.

Yesterday, the Ministry of Land, Transport and Maritime Affairs held an emergency meeting with local construction companies to discuss ways in which Korea can support the North African country in rebuilding infrastructure destroyed in the conflict.

Libya has been in a state of war since February, when rebels called for an end to Qaddafi’s 42-year rule.

“We [the Land Ministry and construction firms] decided to supply relief goods to Libya as a humanitarian measure and also to come up with specific plans together with the International Construction Information Service on helping the country rebuild itself,” said Kwon Hyuk-jin, head of the ministry’s overseas construction department.

The Land Ministry and construction companies also requested Korea’s Ministry of Foreign Affairs and Trade to lift a ban on travel to Libya that was imposed in early March to help get business going between the two countries.

The state-run Korea Trade-Investment Promotion Agency also released a statement yesterday noting that Libya could become a big market for local construction firms once the current unrest is over.

The agency estimated that the market for rebuilding Libya could be as large as $120 billion considering the high demand for repairing oil refineries, electric power lines, houses, ports and roads.

“Once the war is completely over and the rebel forces start rebuilding the country’s infrastructure, there will be new construction demand equal to building three or four new metropolitan cities in Korea,” said Kwak Dong-woon, an official from the agency.

He said Korean firms should take particular notice of new construction projects in the Benghazi area, the second-largest city in Libya, which is undeveloped compared to other major cities. Benghazi is the Libyan rebels’ base.

“Companies are keeping an eye on the latest developments of the Libyan crisis and expect outbound shipments of medical supplies, food products and construction equipment from Korea to increase,” the Korea International Trade Association said yesterday.

The association anticipates that the new government, once established, would give orders to foreign companies as part of rebuilding efforts, and Korean companies like Hyundai Engineering and Construction and Samsung Engineering will be in a favorable position as they already have roots in Libya.

The Foreign Ministry also said on Monday that the rebel leadership in Libya gave verbal assurances to the Korean government that Korea’s existing business contracts with the Libyan government would be honored after the collapse of the Qaddafi regime.

Libya is one of Korea’s major business partners. As of last year, Korea’s exports to Libya reached $1.41 billion, and the major items were ships, automobiles, heaters and construction equipment. Korea imported $171 million worth of goods including naphtha and oil products from the North African country last year.

Due to the conflict, Korea’s exports to Libya fell 87.9 percent in the first seven months of this year, according to the trade association.

Outbound shipments to Libya reached $119 million in the January-July period, a sharp decline from a year earlier.

In particular, exports of automobiles, auto components and construction equipment fell 63.9 percent, 75 percent, and 86.1 percent, respectively.

By Lee Eun-joo [angie@joongang.co.kr]