Deeper economic ties with Iran can bring Korea trade benefits of $84.5 billion and create 680,000 new jobs in the coming decade, according to a Korean think tank.
In a report released Wednesday, the Korea Economic Research Institute looked into seven industrial segments that it saw would benefit most from increased business engagement with Iran, a large and diversified market in the Middle East that is just opening up following the lifting earlier this year of decades-long international economic sanctions.
Between this year and 2025, Korea’s exports to Iran in the seven areas will rise by a combined $84.5 billion.
Broken down, construction services will increase by $18.5 billion; automobiles by $17.6 billion; petrochemicals by 14.8 billion; infrastructure and plant construction by $11.7 billion; mobile phones by $11.1 billion; home appliances by $9.8 billion; and cultural content by $1.1 billion.
Overall, production growth will amount to 188 trillion won ($161 billion). This will translate into 680,000 new jobs, including 288,000 in construction services and 154,000 in automobiles.
“Benefits are seen maximized when businesses tap the market through exports and localization at the same time,” said researcher Choi Nam-suk in the report.
He pointed out that Korea’s direct investment in the Middle East, now concentrated on Saudi Arabia, needs to shift to Iran.
Last week, Korea’s President Park Geun-hye, with a delegation of big business groups, was in Iran for a three-day state visit, during which scores of business agreements worth $37 billion were signed.
South Korea’s average annual exports to Iran stood at $4.75 billion during the 2009-2015 period.
By Lee Sun-young (milaya@heraldcorp.com)