February 2023

Economic Deals from the UAE

In January, President Yoon Suk Yeol traveled to the UAE for a state visit, where he made one of the biggest achievements in his presidency, a massive USD 30 billion investment pledge from the Mideast country.

The ongoing pandemic, the war in Ukraine, and the spread of global trade protectionism have caused disruptions in various supply sectors, ranging from energy and food resources to semiconductor, critical minerals, and many more. Supply shocks in these key sectors have spilled over to the broader economy, sending prices for almost everything through the roof and hurting many households financially across the globe.

Amid seemingly endless challenges, good news that would boost the Korean economy arrived in Korea from the UAE, where President Yoon was making the first state visit as a Korean leader since the two countries established diplomatic ties in 1980.

Yoon in January announced that the UAE had pledged a staggering USD 30 billion in investment in the nation¡¯s industries. The investment aims to increase bilateral cooperation in the fields of nuclear, hydrogen, and solar energy, as well as defense.

The UAE government said that the decision was made based on its trust in Korea, saying that it was deeply impressed by Korean companies which fulfilled contracts despite difficulties including the pandemic.

The biggest one among the contracts that the UAE government referred to is the Barakah nuclear power plant, Seoul¡¯s first attempt to build atomic reactors abroad. The facility in the western deserts near the Saudi border is a symbol of the Korea-UAE cooperation and is expected to one day account for nearly a quarter of all of the UAE¡¯s power needs.

On top of this, 48 agreements worth USD 6.1 billion covering the key sectors of mutual interest were signed by businesses from both sides. The latest landmark deals will usher in what Yoon called a ¡°second Middle East boom,¡± in which both countries will form a ¡°special strategic partnership¡± at the highest level.

Following the UAE trip, Yoon announced that the government would launch a ¡°Korea-UAE investment cooperation platform¡± so that the USD 30 billion investment pledge can be implemented effectively. The platform will consist of a regular contact channel between the two countries, an investment cooperation committee, and an investment cooperation network.

¡°As president, I will look carefully after this [UAE] investment so that it plays a big role in not only return on investment but also the UAE¡¯s mid-to-long term sustainable development,¡± said the Korean president.