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South Korea in Myanmar: Missing the Train to Naypyitaw?

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South Korea’s interest in Myanmar lies in its economic assets: cheaper labor costs, a sizable market of around 51 million people, and natural resource wealth. Yet Myanmar has unrealized potential to play a much greater strategic role for South Korea.
South Korea’s economic presence in the country is wide-ranging and Seoul has emerged as an important economic partner for Naypyitaw. South Korean aid exceeded $20 million in 2014 and totaled $50 million in the 2013-2015 period, with the Southeast Asian country now included in the top 10 of KOICA’s (South Korea International Cooperation Agency) priority list of aid recipients. Since 2010, trade between the two countries has experienced a three-fold increase, exceeding $850 million in 2015 and earning South Korea the position of sixth largest exporter to Myanmar. South Korea is also among the top ten investors in Myanmar, which represents its fourth largest investment market in ASEAN.
Despite these strides, South Korea will find it difficult to out-compete its larger neighbors in Myanmar. Compared to that of other East Asian countries, South Korea’s development assistance to Myanmar is still relatively small. The aid sector is a crowded field with various Western and Asian actors all seeking to establish a presence in the country, only to realize that Myanmar does not have the capacity to manage projects or even spend funds. In 2014, Myanmar’s main import partners were China (42 percent), Thailand (20 percent), and Singapore (10 percent). At 3.8 percent, South Korea is clearly far behind. Myanmar’s main export destinations are China (32 percent), Thailand (31 percent), and India (9.2 percent), with South Korea again a distant ninth at 4.9 percent. At around $170 million, South Korean FDI lags behind Singapore ($4.3 billion) and China ($3.3 billion).
South Korea cannot expect to have greater influence in Myanmar unless Seoul leverages its growing economic presence to pursue a larger strategic aim. The economic relationship has largely overshadowed the political one to the point that, while South Korea’s contribution is beyond dispute, the larger and more long-term aims it pursues in the country remain underdeveloped, with a clear risk that its spending may not constitute the best use of its resources. Assessing its role in Myanmar could not be timelier for South Korea given recent geopolitical developments.
It is safe to assume that the Trump administration will be less interested in Myanmar’s political transition, the various human rights issues plaguing that country and its internal instability and underdevelopment. South Korea itself is unlikely to be a top priority for the Trump administration (if anything, North Korea might be, alongside China). Precisely because of these issues South Korea needs to remind the United States of its strategic relevance, and can use its growing presence in Myanmar to that end. Myanmar will be seen in Washington through the prism of U.S.-China relations. Thus, assuming a U.S. interest in Southeast Asia, but also a reluctance to stay directly engaged, South Korea could play a larger role — and one aligned to U.S. strategic interests — as its presence would be less likely to rouse suspicions in Beijing.



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