Commentary | May 16, 2016

With Sanctions Lifted, South Korea Eyes Investment Links to Iran

In a piece for World Politics Review, EWI Fellow J. Berkshire Miller writes about South Korean President Park Geun-hye's recent visit to Iran. Miller highlights the importance oil and gas play in the South Korean-Iranian relationship and how the recent nuclear deal has encouraged South Korea to once again look at Iran as a key provider of energy. During her visit, Iranian President Hassan Rouhani gave a message of support for South Korea against North Korea's nuclear armament, which was of particular note as Tehran has traditionally been an ally of Pyongyang.

South Korean President Park Geun-hye visited Iran earlier this month, pledging to forge ahead and establish a new era of relations with Tehran built on closer economic cooperation. During the three-day visit, Park and Iranian President Hassan Rouhani agreed to 30 joint economic projects, totaling more than $37.1 billion. The two sides also agreed to more than 50 memorandums of understanding dealing with everything from infrastructure cooperation and joint energy ventures to work on medical and health care projects.

South Korea was eager to quickly restore relations with Tehran following the finalization of last year’s nuclear deal between Iran and the P5+1. As an indication of her desire to expeditiously improve ties, Park was accompanied by a delegation of more than 200 business officials, representing key South Korean firms interested in investment in Iran. Seoul has also signaled a political commitment to rebuilding ties with Tehran by committing to annual foreign minister-level meetings and regular exchanges with other key ministers on economic issues.

Under the brunt of United Nations Security Council sanctions over Iran’s nuclear program, South Korean trade with Iran suffered over the past five years, dropping precipitously from $17.4 billion in 2011 to only $6.1 billion in 2015. During their meeting, Park and Rouhani agreed to significantly reverse this trend in the coming years with a goal of increasing bilateral trade to $30 billion by 2021. 

To read the enire article on World Politics Review, click here