South Korean companies may need to take more risks in Russia, especially amid signs of economic recovery there, a report said Thursday.
The report from the Korea International Trade Association noted the country's overall exports to Russia have dipped at a much greater rate than those of other countries, including the United States, that have been imposing economic sanctions against Moscow following its military intervention in Ukraine in early 2014.
Russian currency, ruble (123RF)
In 2015, South Korea's exports to Russia more than halved, plunging 53.7 percent from the year before, according to the report.
Exports of the USto Russia dropped 34.1 percent in the same year, while those of Germany, also applying sanctions against Moscow, dwindled 38.1 percent on-year.
"Also, in 2016, shipments to Russia from countries that are not taking part in the sanctions against Russia made a turnaround to a positive growth, with shipments from China growing 5.8 percent and India 12.2 percent," it said. "However, shipments from South Korea continued to shrink at 2.1 percent on-year in 2016, following a 53.7 percent drop in 2015."
The report suggested such a large drop, even exceeding the rate of drop in shipments by those seeking to punish Russia with economic and trade means, may have been caused by too much caution.
"Despite their participation in international sanctions, Western countries appear to have maintained their economic cooperation with Russia at least in areas with high growth potential," the report said. "And recently, they also appear to be expanding their investment and exports to Russia amid apparent signs of recovery in the Russian economy."
"South Korean firms, on the other hand, are moving slow as most of them hold an uneasy feeling toward trading with a country under international sanctions," it added.
Citing an earlier report from the International Monetary Fund, the report noted the Russian economy was expected to expand 1.1 percent this year, marking a turnaround from a negative growth of 0.8 percent in 2016. (Yonhap)