Yoon Suk Yeol takes economic diplomacy to Davos Forum

Politics

Published: 15 Jan. 2023, 17:20

Yoon Suk Yeol takes economic diplomacy to Davos Forum

Visit will be the first for a Korean leader in nine years

World Economic Forum (WEF) President Borge Brende, second from right, delivers a speech during a virtual press briefing in Cologny, Switzerland, on Jan. 10, ahead of the Davos Forum which kicks off this week. [EPA/YONHAP]

President Yoon Suk Yeol will make his debut at the World Economic Forum (WEF) in the Swiss resort town of Davos this week, joining over 50 other foreign leaders and some 600 CEOs to discuss challenges facing the world.

Since Saturday, Yoon has been on a two-country, eight-day trip: first, a state visit to the United Arab Emirates (UAE), and the to Switzerland to attend the so-called Davos Forum. The trip is heavy on economic diplomacy to help Korean businesses expand overseas.

This year's forum, the WEF's 53rd in Davos, is expected to address the geo-economic fragmentation, financial sector vulnerabilities and a climate crisis and find solutions through public-private cooperation. It comes amid the backdrop of the Covid-19 pandemic, the war in Ukraine, stalled economic growth in the world's largest economies and soaring food and energy prices.

Yoon will join political leaders, business executives, opinion leaders and international organization chiefs. This year's theme is "Cooperation in a Fragmented World."

There will be more than 2,700 participants from 130 countries, including 52 heads of states, 600 CEOs, and representatives from 700 organizations, in what organizers say will be a record turnout for the forum which runs from Monday to Friday.

"There is no doubt that our 53rd annual meeting in Davos will happen against the most complex geopolitical and economic backdrop in decades," said forum President Borge Brende in a press conference last Tuesday.

The last in-person Davos Forum was in early 2020, just before the Covid-19 outbreak was declared a global health emergency. The 2021 and 2022 events were held virtually.

This is the first time in nine years that a Korean president has attended the Davos Forum.

In a whirlwind schedule in Switzerland starting Tuesday, Yoon is expected to meet with Korean residents in Zurich, then head to the ski resort of Davos to meet with major Korean and global company CEOs. He will give his first address to the Davos Forum Thursday.

President Yoon Suk Yeol, right, accompanied by first lady Kim Keon-hee, waves before departing on Air Force One from Seoul Air Base in Gyeonggi, Saturday, kicking off an eight-day trip to the United Arab Emirates and Switzerland. [NEWS1]

Economic diplomacy

Yoon's weeklong trip to the UAE and Switzerland is his fourth overseas trip.

Since he took office last May, he has attended a series of multilateral meetings including a NATO Summit, the UN General Assembly and Asean-related forums, and on their sidelines taken part in bilateral summits.

For the first time, Yoon was accompanied by a large business delegation in his visit to the UAE starting Saturday, comprised of representatives of 100 companies. They included executives of some of Korea's top conglomerates, but nearly 70 percent of participating companies were small and medium-sized companies, according to the Korea International Trade Association (KITA).

The delegation included LS Group Chairman Koo Ja-yeol, chairman of KITA, CJ Group Chairman Sohn Kyung-shik, chairman of the Korea Employers Federation, Korea Federation of Small, Medium Enterprises Chairman Kim Ki-moon, and executives of Samsung Electronics, Hyundai Motor, SK, Doosan Enerbility, HD Hyundai and GS Energy.

In the UAE, Yoon sought cooperation in fields including energy, infrastructure and construction. The two countries are also expected to expand economic cooperation in ICT, game contents, tourism, consumer goods and high-tech fields, according to KITA. It was also an opportunity for Korean companies, including SMEs, interested in entering the Middle East market.

The two countries were set to sign some 30 memoranda of understanding (MOU) and discuss defense exports contracts.

The Yoon administration is hoping for a "second Middle East boom," following a summit with Saudi Arabian Crown Prince Mohammed bin Salman Al Saud in Seoul last November. Those talks were an opportunity to strengthen cooperation in energy, defense and infrastructure and in megaprojects such as NEOM, Saudi Arabia's futuristic smart city plan.

"The government is focused on companies' exports, attracting investment, economic revitalization, and supporting business activities, and for the president, summit diplomacy is the most important factor in such efforts," said a senior presidential official.

For the second leg of the trip, Yoon heads to Switzerland on Tuesday, where he is expected to continue his economic diplomacy by engaging with global business and political leaders.

Yoon will start off his Swiss activities meeting with Korean residents in Zurich on Tuesday. He will travel to Davos the next day to take part in the World Economic Forum.

"President Yoon will promote Korea's favorable investment environment and technological competitiveness to global opinion leaders attending the Davos Forum," said National Security Adviser Kim Sung-han in a press briefing on the trip last week.

On Wednesday, Yoon will hold a luncheon with chiefs of Korea's six major conglomerates and CEOS of major global companies to discuss economic policies and investment.

The meeting is expected to discuss "solidarity and cooperation between the government and the private sector for overcoming complex crises and attaining sustainable growth, introduce the direction of economic policies centered on the private market and cooperation for Korean investment," said Choi Sang-mok, senior presidential secretary for economic affairs, in a press briefing on the trip last week.

The luncheon is expected to be attended by Samsung Electronics Executive Chairman Lee Jae-yong, SK Chairman Chey Tae-won, Hyundai Motor Group Executive Chair Euisun Chung, LG Group Chairman Koo Kwang-mo, Lotte Group Chairman Shin Dong-bin and Hanwha Vice Chairman Kim Dong-kwan, according to Yoon's presidential office. Some of the executives were a part of Yoon's business delegation to the UAE.

It will also be attended by executives of global companies such as Intel, IBM, Qualcomm, JP Morgan and Sony.

"It will be an opportunity to discuss the difficulties Korean businesses face, address what role our government will play in cooperation between Korean and global companies and present what vision the president holds on behalf of our corporations in a dialogue with global CEOs," said the presidential official.

Later Wednesday, Yoon will attend a Korea Night event as part of diplomatic efforts to drum up support for Busan's bid to host the 2030 World Expo.

The event will be an opportunity to "promote the Busan Initiative, a customized international cooperation program, and Korean culture to influential people gathered in Davos," said Choi.

The other three cities competing to host the Expo are Saudi Arabia's Riyadh, Italy's Rome and Ukraine's Odesa. The host city will be decided by a secret ballot vote by 171 member countries at the General Assembly of the Bureau International des Expositions in Paris at the end of next November.

A police security guard on the roof of a hotel in Davos, Switzerland last week ahead of the World Economic Forum. [AP/YONHAP]

Yoon's message

In his first address at the World Economic Forum Thursday, Yoon is expected to focus on a message of global solidarity to overcome economic challenges.

"Through his speech, President Yoon will present a path for international cooperation and global solidarity for strengthening supply chains, transitioning to clean energy and realizing a digital order, and emphasize Korea's intention to play a leading role in the international community," said National Security Adviser Kim.

Former President Park Geun-hye was the last Korean leader to attend the Davos Forum in January 2014. She said that Korea's drive for a "creative economy" could offer the international community "entrepreneurship-driven strategy for shaping a new future."

In a virtual address to the forum in 2021, then President Moon Jae-in focused on Korea's measures designed to promote "inclusive growth" in the midst of the Covid-19 pandemic. He explained the Korean New Deal initiative, meant to expand employment and social safety nets.

Yoon plans to discuss "solidarity and cooperation between the government and the private sector for overcoming the complex crisis and sustainable growth, introducing the direction of economic policies centered on the private market, and investments in Korea," said presidential secretary Choi.

This comes as the agenda for the forum will include discussions on public-private cooperation on issues like energy, climate, investment, trade, future technologies, jobs, health and social mobility.

"We see the manifold political, economic and social forces creating increased fragmentation on a global and national level," said Klaus Schwab, founder and executive chairman of the WEF, in a statement. "To address the root causes of this erosion of trust, we need to reinforce cooperation between the government and business sectors, creating the conditions for a strong and durable recovery. At the same time there must be the recognition that economic development needs to be made more resilient, more sustainable and nobody should be left behind."

Along with foreign leaders including German Chancellor Olaf Scholz, Philippine President Ferdinand Marcos and President of the European Commission Ursula von der Leyen, this year's forum will be attended by nearly 40 heads of international agencies including the United Nations, International Monetary Fund and World Trade Organization.

U.S. President Joe Biden and Chinese President Xi Jinping will be conspicuously absent. The United States will be represented by John Kerry, U.S. special presidential envoy for climate Avril Haines and director of national intelligence and U.S. Trade Representative Katherine Tai.

A high-ranking presidential official said that the WEF, unlike other multilateral forums, isn't the ideal place for bilateral summits but that there will be opportunities for Yoon to have encounters with foreign leaders and business executives.

"The atmosphere of the Davos Forum itself is like a bustling market and not conducive for bilateral or multilateral summits," said the official. "Heads of state can come and go, and can naturally meet and chat with CEOs of global company. I expect that such meetings will take place in such a free atmosphere."

The logo of the World Economic Forum is seen at the congress center in the Alpine resort of Davos, Switzerland in 2022. [REUTERS/YONHAP]

From geopolitical risk to quantum technology

Yoon could also highlight his administration's policy about Pyongyang's denuclearization amid heightened tensions on the Korean Peninsula.

Davos is a significant location for Koreans, as North and South Korea held their first ministerial-level meeting in the city in 1989.

Seoul's Unification Minister Kwon Young-se will accompany Yoon to Davos and is expected to explain to officials and heads of international organizations Yoon's so-called "audacious initiative," a plan to offer economic help to North Korea in stages if the regime stops the development of its nuclear weapons.

This includes a large-scale food program, assistance for power generation, transmission and distribution infrastructure, projects to modernize North Korea's ports and airports for international trade and support for international investment and financial initiatives.

He is also expected to reaffirm his administration’s commitment to providing humanitarian assistance to North Korea regardless of the political and military situation, according to the Unification Ministry Thursday.

Kwon will be the first unification minister in 18 years to attend the WEF.

On the sidelines of the forum, Kwon will meet with leaders of international organizations including Catherine Russell, executive director of the UN Children's Fund (Unicef), and David Beasley, head of the World Food Program.

Last year, North Korea conducted an unprecedented number of missile tests, including launching intercontinental ballistic missiles (ICBMs) for the first time since 2017, escalating tensions on the peninsula. In late December, North Korea violated the South's airspace by flying drones across the inter-Korean border for the first time in five years.

At the beginning of the new year, North Korean leader Kim Jong-un ordered an "exponential" expansion of his nuclear arsenal and the development of an even more powerful ICBM.

"We've seen a miscalculation leading to serious wars many times in history," said Yoon in an interview with the Associated Press last Tuesday ahead of his trip, noting that the North's advancing nuclear arsenal poses a direct threat to the U.S. mainland as well as South Korea and Japan.

He said such "unlawful North Korean provocations" will result in the strengthening of South Korea's security response capabilities and its cooperation with United States and Japan.

Yoon, however, is not too concerned about geopolitical factors, such as North Korea's nuclear and missile threats, deterring foreign investors from the Korean market.

"Investors in Korea usually worry about geopolitical risk, one of the biggest risk factors in our country," said the senior presidential official.

"There isn't much concern in the international market," he said, referring to various global evaluations of such geopolitical risks. "Nevertheless, it is in our best interest for the Korean president to meet with global CEOs and explain various situations in Korea. I believe it will help to maintain international credibility."

Wrapping up his visit to Switzerland, Yoon is also expected to pay a visit to the Swiss Federal Institute of Technology in Zurich (ETH Zurich) and meet with scholars of quantum technology to discuss global solidarity in building a future based on science and technology.

Quantum technology, which can dramatically increase computation speed compared to supercomputers, "is a game changer that will revolutionize the security of all industries," said Choi, adding that competition to secure such technology is fierce against the United States, the European Union, Japan and China.

"Through this visit, we will exchange opinions on the success factors that enabled Switzerland to become a quantum technology powerhouse and strategies that latecomer Korea should take, and build a network between scientists from the two countries," Choi said.

He added that the trip is an extension of ideas in the president's New Year's address, in which Yoon expressed his "determination to overcome complex crises and bolster exports through economy-oriented summit diplomacy."

Yoon will return to Seoul Saturday.

BY SARAH KIM [kim.sarah@joongang.co.kr]