Saudi Crown Prince Mohammed Bin Salman’s Visit to Korea and the Future of the Korean Political Economy
Picture of Saudi Crown Prince Mohammed bin Salman Al Saud. Photo: Louiza Vradi / Reuters
Saudi Crown Prince Mohammed bin Salman Al Saud landed in Seoul since his last visit three years prior for his busy day in Korea. Prince Salman is known to be the practical leader of Saudi Arabia, and his visit to Korea during this specific timeframe plays a significant role in the geopolitical situation of Korea.
South Korea has been experiencing increased tension due to countless provocations from North Korea with their ICBM missiles along with other armed protests against Korean alliances such as the U.S. and Japan. Saudi Arabia has also been experiencing unpleasant interactions with the U.S. due to the hostile stance between the President and the Prince and constant requests for oil supplies from the U.S. amidst the global supply chain crisis.
Prince Salman's choice to visit Korea despite the unstable geopolitical situation in the Korean peninsula signals the dawn of a new level of alliance and cooperation between Korea and Saudi Arabia amidst global competition to secure Saudi Arabia’s oil supplies and capital interests.
Picture of President Yoon. Photo: Lee Young-ho / Bloomberg
The fact that Prince Salman’s visit to Korea resulted in a total of $30 billion in Saudi Arabia’s investments and MOUs with Korean companies strongly suggests further economic cooperation between the two countries is implied via his visit.
Among the $30 billion include a $7 billion petrochemical project for S-Oil, Hyundai Rotem’s cooperation in Saudi Arabia’s NEOM City Project, and many other projects related to it.
In addition, both countries also agreed on strengthening their cooperation in defensive systems and weapons, in which Korea has been a new dark horse in the defense weapons market with a recent contract with the Poland military worth $5.8 billion.
However, the focus of the Prince’s visit should not be on the raw number of investments. The most important factor behind the raw number is that Saudi Arabia has chosen Korea as their partner for their continued journey to reduce dependence on an oil-based economy.
This is the reason behind Saudi Arabia’s massive investments in Korean companies that are capable of contributing to the success of NEOM City, such as Samsung, Hyundai, and SK, with their advanced technologies in various fields ranging from railroad technology to construction technology.
While it may seem like this is Korean companies’ first experience with Middle East giants, plenty of Korean companies have already worked and contributed extensively to Middle East countries’ current environment.
Some of the most notable examples are Burj Khalifa, one of the most iconic buildings in UAE, built by Samsung C&T and Aramco and S-Oil’s continued cooperation as Aramco’s position as the majority shareholder of S-Oil, one of the largest oil-refining companies in Korea.