Sales Diplomacy
South Korean President Park Geun-hye met with Iranian President Hassan Rouhani in Iran on May 2 (local time) and signed 66 memorandums of understanding (MOUs).
The MOUs include those for 30 infrastructure and energy projects worth US$37.1 billion in total and the amount is expected to increase to US$45.6 billion when follow-up projects are taken into account, divided into US$12.12 billion for infrastructure projects, US$31.6 billion for energy projects and US$1.85 billion for medical and healthcare projects.
The infrastructure projects include railway construction between Isfahan and Ahvaz (US$5.3 billion), Tehran-Shomal Freeway construction (US$1.5 billion) and oil refinery construction in Bahman (US$10 billion). In the medical and healthcare sector, projects are to be launched for the construction of six hospitals, worth US$1.7 billion in total, and medical equipment manufacturing facilities at an investment of US$150 million. The South Korean government is planning to provide a financial assistance of US$25 billion for South Korean enterprises so that they can obtain the final contracts.
During their summit talks, the two Presidents also signed a shipping agreement, which had been put on hold for two decades due to economic sanctions on Iran, so the bilateral trade between the two countries can be boosted. In addition, the Iran Chamber of Commerce, Industries & Mines and the Korea Chamber of Commerce & Industry are to revise their MOU for bilateral cooperation and the Korea Trade-Investment Promotion Agency and the Organization for Investment, Economic & Technical Assistance of Iran are to conclude a MOU with each other for more information exchange, sharing of investment opportunities, etc. When it comes to settlement, the two countries are to maintain their current South Korean won-based system for the time being while discussing the establishment of a euro-based one.
“President Hassan Rouhani and I agreed to the fact that mutual cooperation between Iran and South Korea should be more systematic for their bilateral relations to become even more prosperous,” the South Korean President said, continuing, “The first joint statement signed at this time, which contains visions and specific action plans for the development of the bilateral relations, will be a useful guideline to that end.”
The Iranian President remarked in response that the trade relations between the two countries will become more strategic than before through the state visit of the South Korean President so that South Korean enterprises can invest more in Iran and collaborate with a number of Iranian companies. “I am convinced that the development of the bilateral economic relations between South Korea and Iran will lead to the growth of the other sectors as well and I hope to see more and more South Korean companies do business in my country,” he said.