By David Alexander.
Future Directions International,
Research Assistant Indian Ocean Research Programme.
South Korea (officially, the Republic of Korea) has commenced a process of enlarging its strategic reach, which includes the Indian Ocean region. South Korea, as a net energy importer, is necessarily committed to maintaining the supply of the energy resources that are crucial to its economy. To facilitate the continued supply of energy and resources, South Korea has been actively increasing its level of diplomatic and economic activity with many of the states in the Indian Ocean region.
South Korea has adopted a proactive role in the security of the Indian Ocean and the sea lines of communication (SLOCs) which cross it. Seoul has increased its naval capabilities and become more active in multilateral military operations, such as those in Iraq and Afghanistan. The increased activity has assisted South Korea in lifting its profile and to solidify its status as a middle power. South Korea is heavily reliant upon imports of oil, gas and coal for its energy security. Over 95 per cent of South Korea’s energy resources are imported, making it the world’s fifth-largest importer of oil and second-largest importer of liquid natural gas (LNG). The reliance upon overseas energy supplies has seen South Korea’s state-owned oil, gas and electricity companies aggressively seeking overseas exploration and production opportunities.
South Korea set aside US$7 billion for resource development in 2011, a 222 per cent increase over the 2010 figure of US$2.2 billion. It can be expected that the majority of this investment will go to offshore sue to South Korea’s limited domestic possibilities. Burma has been a target of considerable resource investment from South Korea, particularly in the mining, oil and gas sectors. Given that there is likely to be greater competition for Burma’s energy reserves as Rangoon seeks to reduce its economic dependence on China – at least to some degree – Seoul may see an opportunity to increase its diplomatic influence. While South Korea is interested to improve its ties with Sri Lanka, Colombo is more of an aid recipient than substantial trading partner.
South Korea’s Economic Development Co-operation Fund has assisted Sri Lanka through funding road infrastructure projects worth US$30 million and has received requests to give further assistance in the development of the north and east of Sri Lanka. As South Korea attempts to decrease its levels of oil imports, and increase its LNG consumption, Indonesia will be accorded a more prominent role in South Korean foreign policy. Indonesia currently exports vast quantities of LNG to South Korea and has become its fourth-largest supplier after Qatar, Malaysia and Oman. Next door in East Timor, South Korea has been equally active, donating three decommissioned patrol boats to the Timorese Defence Force in September 2011.
A further expansion of defence links has been discussed at the ministerial level and, together with the Timorese purchase of two Chinese vessels in 2010, allows Dili to demonstrate that it need not remain strategically dependent on Canberra. For Seoul, the Timor links may be aimed at securing access to Timor’s oil and gas reserves in the face of increasing Chinese interest. Australia forms a crucial component of South Korea’s need for energy and mineral resources.
The two countries have a strengthening economic relationship based on South Korea’s need for iron ore, coal and LNG. Australia, along with Indonesia, is the largest supplier of coal to South Korea. However Australia is currently only providing approximately 1.5 million tonnes per annum (mtp/a) of South Korea’s LNG needs. With South Korea aspiring to secure a further four mtp/a, Australia is well placed to play a greater role in South Korea’s energy security policies. The supply of energy resources is critically important to South Korea, and this gives energy-exporting Middle Eastern countries prominence in South Korea’s search for energy security. South Korea obtains the greatest portion of its oil imports from Saudi Arabia, which supplies 27 per cent of total oil imports.
South Korea has, however, been reciprocal in its trading relations with Saudi Arabia, largely in the high technology and construction industries. The most important achievement of South Korea’s trade relations with the UAE – and one with far-reaching implications – has been the Gulf state’s nuclear power project. This was the largest contract ever won by South Korean companies internationally. Until now, the market for nuclear power plants was controlled mainly by the United States, France, Japan, Russia and China.
The relationship with India is another important relationship for South Korea to achieve its strategic objectives in the Indian Ocean region. India and South Korea have developed a strong economic partnership and have taken significant steps towards a political and security relationship reflecting their numerous shared strategic interests. The two states not only share a history of national partition and confrontation with their adjoining counterparts (Pakistan and North Korea, respectively) but have also uneasy relationships with their powerful neighbour, China.
