Thursday, August 25, 2011

Ask a Korean! News: Korea's Role in Libyan Economy

Democracy is not just a supreme value for human freedom -- it also does a great deal for wealth and prosperity. Korea's role in rebuilding post-Gadhafi Libya is a nice example of this. Some excerpts:
As the regime of Moammar Gadhafi crumbled, the value of South Korean construction firms rose.

When rebel forces swarmed into the dwindling Tripoli strongholds of Moammar Gadhafi Tuesday, investors in distant Seoul pushed the stock value of companies like Daewoo Engineering & Construction and Hyundai Engineering & Construction up nearly 10%, betting that the new rebel regime will mean lucrative reconstruction contracts.


Libya is a major business partner to South Korea, and trade has been hard hit by the Libyan conflict. While exports to Libya reached $1.4 billion last year, exports dove nearly 88% the first seven months of the year, according to the Korea International Trade Association.

Korean companies account for one-third of all foreign business in Libya according to the Korea Trade-Promotion Agency, KOTRA, working on projects worth some $36.4 billion at the start of this year.

When violence first erupted, the South Korean government helped with the evacuation of almost 1400 workers working on 300 different building sites.


KOTRA estimates the market for rebuilding Libya could be as large as $120 billion. Given the market share Korean firms had before this year, KOTRA estimates Korea's share of reconstruction could be as high as $40 billion.

Rebuilding projects could include repairing oil refineries, electricity power lines, ports and houses as well as new road construction.
Korea stakes claim in post-Ghadafi Libya [CNN]

Many of Korea's major construction companies cut their teeth by building massive projects in the Middle East during the 1970s and 80s. By early 1980s, Korea trailed only America in the amount of money earned from construction projects abroad, and over 90 percent of such revenue came from Middle East, particularly Saudi Arabia and Libya. In 1991, Dongah Construction finished building a massive pipeline to carry water from one end of Libya to the other, which was the largest construction project at the time.

Like Korea, Libya went from a dictatorship to democracy. Here is to hoping that Libya finds prosperity as Korea did.

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  1. Except Libya was not about freedom or democracy and before anybody says it, it was not about oil either.

    But it is interesting that you pose this point about high SK involvement in Libya in two ways...

    Firstly Libya had a very high HDI (human development index)

    Secondly a SKorean firm was the one who paid massive bribes to the UK ex prime minister to get Iraqi oil contracts.

    It makes you wonder if there are any real belligerent entities out there. I'm not saying China or anybody else are the good guys here...

    But what do I know?

  2. Having Korea as key economic partner will benefit new Libyan govt. because S.Korea went through similar experience.


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