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Restoration, Diversification
Economy, Domestic Economy

Restoration, Diversification

South Korean Ambassador to Iran Kim Seung-ho said Seoul is following a set of strategies to restore ties with Tehran to pre-sanctions level, particularly in economic and trade fields.
In an interview with Mehr News Agency, Kim also underlined the diversification and interconnection of bilateral relations. Excerpts follow:

During his last year’s visit to Iran, the prime minister of South Korea agreed to increase the annual trade volume between the two countries to $18 billion. Now the question is how successful we were to hit the target and except for the oil, what sort of new commodities have you imported from Iran?
Our last year trading increased by 30%. But from January to March 2017, it increased by 60%. So I can say that our two-way trade has increased very rapidly and this is quite good news for both countries. The reason as to why this is good news is not only you sell more oil to us but Seoul also sells more products to you.
I should say that South Korea has three basic strategies toward Iran. The first one is “restoration”. Before the sanctions in 2011 … two-way trade was more than $17 billion. But during the sanctions period, it was reduced to one-third. So we have to restore the peak of trade to the former state.
The second strategy is that we have to “diversify our relations” not only in trade but also in cultural, social and political fields. Even in trade, we need not to focus on oil, cars and cellphones.
The third strategy is to “interconnect relations between the two countries”. Trade in the concept of selling and buying is not sustainable enough. We can easily change our trade pattern.
In regard with the first strategy, I should say that restoration is already well underway.
It is proved by the rapid increase of trade in the last two years. But when it comes to … “competition”, we still have a far way to go.
The product portfolio from South Korea to Iran remains thin. Except for oil, there is not much to import from Iran. But after the lifting of sanctions, our oil import from your country has increased by 200%.
At the same time, our concentration on oil has increased. Now, 98% of our imports from your country are oil. So, we have to diversify our relations.

Do you have any plan for this diversification?
We need a bilateral effort contribution. South Korea can’t do it on its own. We need more Iranian effort to penetrate into our market. Relying on oil and petrochemicals is not enough.

Except for automotive assembly, do South Korean car manufacturing companies have any plans for more cooperation with Iran in technology transfer? What’s your plan for Iran’s auto market?
This year Kerman Motor already started to assemble and sell 2 passenger car models of Korean vehicles.
Kerman Motor has the intention to increase two more types within this year.
I heard that the first of the two models was very well received in the Iranian market and the company is now discussing if they can export the Korean cars to neighboring countries as the number of car sales exceed the number of what you need in the Iranian domestic market.
Within this course, which includes importing components of Korean cars and assembling the final product here in Iran, I definitely think that there can be more technology transfer.
But, if you ask whether the Korean companies have specific plans to set up their own factories here, I have no information as it is the private companies’ decision.
The Korean government can’t impose on private companies to do this. But all depends on the promotion of Korean cars in the Iranian market. If they are well received by Iranian costumers, then surely the private companies will put forward another strategy.

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