[VIEWPOINT]Trade follows the soccer ball?It's World Cup time and the whole world is celebrating. Korea is celebrating even more because it has won its first World Cup game ever. As the co-host of the World Cup games with Japan, Korea is now receiving the attention of almost 6 billion people around the world who are tuning in for the games every day. Never before has Korea basked in the international spotlight as it is now with the World Cup.
Among the 32 countries participating in the soccer competition, some of the strongest contenders come from South America. In the world of soccer, many Central and South American nations are far ahead of the two economic giants, Japan and the United States. When it comes to soccer power, these are advanced countries vying shoulder to shoulder with France, Germany and England. Soccer puts a whole new perspective on international relations. Just look at how Costa Rica with its 4 million people has squashed the 1.3-billion-strong China.
Soccer gives Central and South American countries the power to be feared, and makes other nations struggle to learn and follow them in their technique and style. Korea is no exception, and maintains active soccer exchange programs with Central and South American countries.
But how about Korea's economic and trade relations with these countries? Here, Korea has been regrettably indifferent. Central and South American markets have traditionally been black-ink markets for Korean exports and yet the scale of economic interaction has been meager: Shipments to Central and South America took up only 6 percent of our total exports last year.
Central and South America have always been considered "faraway lands" and pushed to the bottom of the list when it came to trade and investment in most Korean business minds. With frequent financial crises reported in some of the countries in that region, the general perception has been that it is an unsafe region to invest in; Korean banks and businesses have usually shied away from entering or supporting markets there.
Korean society also lacks general information about Central and South American countries -- except that they are terrific soccer players.
What we are missing in our inattention is that Central and South America is a region with far greater potential than we think. This is a market with a population of 500 million and a total gross domestic product of 2 trillion dollars. The national per capita incomes of Brazil, Chile and Mexico are five times higher than that of China.
Central and South America also holds a strategic position as a bridgehead into the United States. Exports from this region into the United States amount to 300 billion dollars per year, and the United States is currently calling for the expansion of its North American Free Trade Agreement with Canada and Mexico into a Free Trade Area of the Americas bloc that includes both the northern and southern hemispheres of the Americas.
Some Central and South American countries are indeed struggling in recession with political instability threatening their economies. But with abundant national resources, exceptional human resources and an advanced level of industrialization, these countries have far superior economic conditions than many other developing countries. With the stabilization of the political situation, strong and fast economic revitalization is expected.
Our economic structure needs outside stimulus. We must constantly search for new markets and make inroads into them. We have been unnecessarily confining ourselves to Asian countries.
It is natural for economic relations to grow among geographically close countries with historical and cultural ties. But we should not forget the lesson we learned in 1997, when our concentration of external transactions within the Asian region brought about a financial crisis. The 21st century is an era of globalization and information. In this era, geographical distance no longer poses any problems for economic relations. We should start paying attention to Latin America.
The co-hosting of the World Cup this year is a fortunate opportunity to make Korea known to the soccer-loving people of Central and South America. For one whole month, these people will be hearing "Korea this" and "Korea that" related to the World Cup. They will also be seeing the Korean streets, people, culture and lifestyle through media coverage.
May Korea achieve its heartfelt wish of advancing to the second round this World Cup, and may it also use this chance to lay the foundation for advancing into Central and South American markets.
The writer is president of the Export-Import Bank of Korea.
by Lee Young-hoi