In Future Energy, Electric Vehicles, Defense
The Korea Chamber of Commerce and Industry (KCCI) suggested in a report that Korea cooperate with major Middle Eastern countries such as Saudi Arabia, the United Arab Emirates (UAE), and Qatar in the fields of future energy, electric vehicles and defense.
The KCCI released the report on economic cooperation issues with major Middle Eastern countries on Oct. 22. The chamber cited Saudi Arabia, the UAE, and Qatar as the three countries with the highest trade volume with Korea.
According to the report, Korea’s trade volume with these three countries swelled by 61.6 percent in 2022 compared to 2019, the year before the COVID-19 pandemic. This is significantly higher than Korea’s global trade growth of 35.3 percent over the same period.
By product, Korea imported the largest amount of crude oil (US$37.67 billion) from Saudi Arabia in 2022 and exported automobiles (US$1.24 billion), ships (US$370 million), and arms (US$280 million) to the Middle East kingdom. From the UAE, Korea bought crude oil (US$9.23 billion), naphtha (US$4.28 billion), and natural gas (US$640 million). Korea sold auto parts (US$340 million), arms (US$290 million), and motor vehicles (US$250 million) to the UAE. Qatar exported a lot of natural gas (US$8.5 billion), crude oil (US$4.89 billion), and naphtha (US$2.44 billion) to Korea while Korea exported mainly steel pipes (US$110 million) and automobiles (US$60 million) to Qatar.
The KCCI picked energy, electric vehicles, and defense products as promising areas for cooperation with these countries.
First, the KCCI analyzed that all three countries -- Saudi Arabia, the UAE, and Qatar –- are strongly promoting the future energy industry such as solar power and hydrogen. Saudi Arabia established the National Renewable Energy Program (NREP) to replace 50 percent of the country’s power generation needs by utilizing renewable energy by 2030 in Saudi Vision 2030. The UAE, through its UAE Energy Strategy 2050, aims to increase the share of renewable energy generation to 44 percent of its total electricity generation by 2050. Qatar has a plan to replace 20 percent of its total electricity demand with renewable energy by 2030 through Qatar Vision 2030.
“The Middle East is optimized for the expansion of large-scale solar power generation facilities and hydrogen production facilities due to excellent climatic conditions such as abundant sunlight and relatively low land costs,” said Dr. Cho Il-hyun of the Energy Economics Research Institute. He continued, “Korean companies will be able to seize many opportunities to enter the region.”
The KCCI also highlighted the growth potential of the electric vehicle (EV) market in the Middle East. Saudi Arabia has set a goal of producing 500,000 EVs per year by 2030 and converting more than 30 percent of cars in the capital Riyadh to EVs. The kingdom is ramping up investment and cooperation to build an EV supply chain. Qatar is also investing in infrastructure with the goal of achieving 10 percent EV penetration by 2030. The UAE saw significant growth, with imports of electric vehicles increasing by more than 13 times in three years from 2019 (US$100 million) to 2022 (US$1.39 billion).
Middle Eastern countries are showing a significant interest in Korea’s automotive technology, from electric vehicle parts to vehicle manufacturing. In July, Hyundai KEFICO, an affiliate of Hyundai Motor Group, signed a parts supply contract worth 700 billion won with Saudi electric car brand CEER.
The KCCI also mentioned the possibility of expanding cooperation in the defense sector. The Middle East is the world’s largest arms importing region due to its rich oil wealth and frequent conflicts such as between Israeli and Palestine and Sunni-Shia, it explained in the report. According to the Stockholm International Peace Research Institute, Saudi Arabia and Qatar have ranked second and third in the world’s top arms importer rankings over the past five years by accounting for 9.6 percent and 6.4 percent of the world’s total arms imports, respectively.