South Korean President Moon Jae-in announced a new initiative for cooperation between South Korea and the Association of Southeast Asian Nations (ASEAN) on November 13. Regarded as a detailed roadmap for his New Southbound Policy, the initiative is to strengthen the partnership between the two regions to a level comparable to South Korea’s relations with the United States, China, Japan and Russia by 2022.
At present, the ASEAN region is the second-largest trade partner and overseas investment destination for South Korea. The volume of bilateral trade between the two regions totals US$118.8 billion a year, South Korea’s annual trade surplus with ASEAN member countries totals US$30.2 billion, and South Korea’s investment in the ASEAN region totals US$5.1 billion a year. In addition, the region is the second-largest market for South Korean construction companies and South Korean outbound tourists’ most favorite destination.
The initiative should be understood in conjunction with the President’s New Northern Policy he declared in Russia in September this year and the New Southbound Policy he declared in Indonesia on November 9. The common purpose of the policy covering the Far East and Eurasia and the policy covering the ASEAN region and India is to achieve mutual prosperity based on coordination. At the background of the policy is his recognition that cooperation with the regions beyond that with the four surrounding powers is essential for South Korea’s ultimate peace and prosperity amid the geopolitical tensions in Northeast Asia and the power game between the U.S. and China.
The South Korean government is planning to support the cooperation between South Korea and the ASEAN in terms of finance, too. It is going to substantially increase relevant budgets and investments so that the financial resources can be concentrated on the four core fields of cooperation determined by the South Korean President, that is, transportation, energy, water resource management, and smart information and communications.
In this regard, the South Korea-ASEAN Cooperation Fund is doubled from US$7 million a year by 2019. Likewise, US$100 million is added by 2022 to South Korea’s Global Infrastructure Fund that currently has a size of 373 billion won, which is divided into 40 billion won from the government, 160 billion won from government agencies, and 173 billion won from the private sector.
Furthermore, the South Korea-ASEAN FTA Cooperation Fund is boosted so that the volume of their bilateral trade can reach US$200 billion by 2020. “The Global Infrastructure Fund is to help South Korean construction companies win contracts abroad and the additional portion is to help them expand their business in the ASEAN region,” the Blue House explained.