Diplomacy without meritIn September 2012, then Korean President Lee Myung-bak and President of Kazakhstan Nursultan Nazarbayev attended a groundbreaking ceremony for the $4.5 billion Balkhash Thermal Power Plant in Kazakhstan’s capital of Astana. It was a project to construct and operate a 1,320 megawatt coal power plant in the southwest coast of Balkhash Lake.
The Blue House boasted of the accomplishment by citing how President Lee visited a hotel where the Kazakh president was staying to conclude the deal during the 2008 Beijing Olympics. But the project was scrapped in September 2016 due to non-transparent processes in the authoritarian country and low oil prices. Samsung C&T Corporation and Korea Electric Power Corporation (Kepco), which led the consortium, suffered over 150 billion won ($132.9 million) in losses.
WikiLeaks exposed that the deal was not made by President Lee but was already concluded by Samsung and Kepco. Lee turned the accomplishment of private companies into an achievement of his administration.
When President Park Geun-hye visited Iran in May 2016, the Blue House claimed to have signed 66 MOUs, which add up to $37.1 billion in economic effect. They boasted that it was the biggest accomplishment of economic diplomacy in history. But a year later, only three of 30 MOUs became actual contracts, which are worth less than $6 billion.
MOUs have no binding power, but the Park administration exaggerated them as actual contracts. The National Assembly inspection on government offices in 2015 revealed that among the 96 MOUs that the Lee Myung-bak administration claimed as accomplishments in resources diplomacy by the president, only 16 contracts were signed.
When South Korea and China were negotiating for a free trade agreement in 2015, our Embassy in Beijing proposed to resolve three pending issues: facilitating Korean students to get a job in China while studying there, allowing a few years as a grace period for Korea’s small and medium companies, which were not ready for environmental regulation by the Chinese government, and expanding Korean companies’ options when they invest in China.
However, the proposal was not discussed in Korea’s negotiation with China so as to be able to conclude the deal within the year. A source who had worked at the embassy at the time said that our many small and midsize companies struggled to meet China’s environmental regulations, as Seoul ignored the demand most desperate to Korean companies.
These failures are outcomes of the government’s greed for showing off its accomplishments.
Recently, it was reported that the plan to export Lee Myung-bak administration’s Four Rivers restoration project to Thailand was canceled. The consortium led by the Korea Water Resources Corporation would end up losing 38 billion won. It is regrettable that economic diplomacy without understanding of the economy was simply repeated.
JoongAng Ilbo, June 13, Page 31
*The author is an editorial writer of the JoongAng Ilbo.