|Professor Hwajin Kim, Graduate School of Law, Seoul National University|
The Crown Prince of Saudi Arabia, Mohammed bin Salman, returned from a visit to Korea last week. The visit to Japan was suddenly cancelled.
Saudi Arabia is a country that falls into the worst category geopolitically. Once you look at the map, it’s frustrating. The Arabian Peninsula, which rises to 43 degrees even in winter, is uninhabitable except in the south-western highlands where there is some moisture in the air, but Yemen and Oman have almost to occupy It only covers the western part of Jeddah and Medina and parts of the Persian Gulf. Other parts of the Persian Gulf were divided among the various tribes as the British left, followed by Qatar and the United Arab Emirates.
Saudi Arabia is a flat country that is difficult to live in and is almost invulnerable in terms of security. There aren’t even trees. Defense spending is fourth in the world, the highest in the world as a percentage of GDP. It uses 6.6%, which is similar to Japan in terms of amount. However, the military power is evaluated as a weak country. It is dangerous to build a large army, a well-trained and organized armed group in a despotic monarchy. So it depends on mercenaries. Ability to fight in an emergency is questionable.
Saudi Arabia, the southern tip of the Ottoman Empire, faced the Ottomans through Lawrence of Arabia sent by Britain at the beginning of the 20th century. It was officially launched in 1932 after the British left at the end of the First World War. The biggest reason Saudi Arabia has prospered so far is because Americans found high quality oil in the country six years later. Saudi Arabia’s oil production is now second only to the United States and more than Russia.
It is a miracle in world history that a country with a lot of wealth and weak geopolitics like Saudi Arabia remains intact even with great powers like Turkey and Iran from afar, and the answer is the United States. The US maintains order in the Middle East and the Saudis are protected. The US didn’t even make any problem with Bin Laden, the main perpetrator of 9/11, because he was from Saudi Arabia but had nothing to do with the government. It wouldn’t matter if it was another country.
However, as the United States decided to close its plate in the Middle East in the future, Saudi Arabia, surrounded by enemies everywhere, was exposed to security risks. Especially Iran, which has twice as many people. So now the Saudis really need friends. It should have diplomatic capabilities similar to those of neighboring Israel. It’s not just about building simple friendships, but about making friends who share economic interests, and Asia is a good partner.
Saudi Arabia has been a longtime friend of Korea since Hyundai chairman Chung Ju-young. Starting with the construction of Jubail Port, Hyundai made a significant contribution to the construction of Saudi Arabia’s infrastructure in the 1970s. The cost of construction brought in more than half of the national budget, creating the largest foreign exchange reserve since the founding of the country. It is evaluated as a decisive turning point in Korean economic history. A large number of workers were also sent. The workers returned from the heat for three years and bought a house of 30 pyeong.
When the world economy was failing after the first oil shock, the Korean economy made a major breakthrough by entering the Middle East, where it accumulated wealth. Subsequent investments in heavy and chemical industries were also based on the capital and capabilities accumulated in the Middle East. It is said that the special construction in the Middle East saved the Korean economy (Professor Joong-Seok Seo, Sungkyunkwan University). Even now, Aramco is a 63.4% shareholder of S-Oil and a 17% shareholder in Hyundai Oilbank.
As shown by the fact that bin Salman overcame his 70 brothers and became the heir to the throne, he is not only extremely intelligent and skilled, but also a man with an iron heart. The history of the Saudi royal family is scarier than the Joseon Dynasty or ‘Game of Thrones’.
But bin Salman, despite being the richest and most powerful ruler in the world, has the most difficult homework in Saudi history. The country must survive in the new international political environment. He knows best, so he promotes various reforms, and if necessary, he takes very strong actions such as kidnapping the Prime Minister of Lebanon or invading Yemen for strange reasons for military experience.
Bin Salman’s Saudi Arabia is already showing an unconventional diplomatic move. I canceled my visit to Japan last week and went to Thailand. The APEC Business event was held in Bangkok. Thailand is a country that has cut ties with Saudi Arabia for 30 years. Bin Salman also attended the opening ceremony of the World Cup by restoring diplomatic relations with Qatar, which had threatened to dig a canal and turn it into an island.
The important fact is that bin Salman is 37 years old. Bin Salman is likely to rule Saudi Arabia for another 30 years if nothing special happens. He is a person who will see and plan everything from an ‘owner’s’ point of view with a long term view. It is also a future-oriented new generation that allows sovereign wealth funds to aggressively invest in Nexon and NCsoft in Korea and the game industry in the United States and Japan. We also need to study and exchange the Middle East and Saudi Arabia from a long-term perspective. That is why the role of corporations should not be less than that of the government.
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