The leaders of South Korea and Myanmar agreed Tuesday to bolster business and diplomatic ties as Seoul looks to firm up its footing in the Southeast Asian country following sweeping democratic and economic reforms.

During a summit in Seoul, President Lee Myung-bak and Myanmar President Thein Sein agreed to push for an investment protection pact and boost cooperation on trade, energy, resources and infrastructure. Ministers signed two agreements on Seoul’s development aid and the creation of a national research institute in Naypyidaw.

“Lee highly praised Myanmar’s recent democratization and reform measures, and wish for continuous progress to accelerate its national development and economic growth, while Sein elucidated his reform policy and vision,” the presidential office said in a statement. 

Sein arrived here on Monday for a state visit, marking rapid headway in bilateral ties after Myanmar’s military junta relinquished power to a nominally civilian government last year. In May, Lee became the first Korean president to visit the capital Naypyidaw.

The two countries established diplomatic relations in 1975. The relationship soured in 1983 when a terrorist bombing in Yangon by North Korean agents killed 17 Seoul officials accompanying then-President Chun Doo-hwan. Myanmar severed ties with Pyongyang after the incident.

During his three-day stay, Sein plans to attend a meeting of Korean business lobbies and tour industrial facilities, a training academy for community leaders and other places.

Early in the day, he made an unplanned visit to the state-run Korean Trade-Investment Promotion Agency in southern Seoul and met with Oh Young-ho, its president.

During a briefing session, Sein introduced Myanmar’s newly revamped foreign investment law and encouraged greater participation by Korean firms in resource development, power production, airport construction and other infrastructure programs.

As the former pariah state opens up to the outside world, the U.S., EU and other countries have lifted many of their decades-long sanctions. This will likely help revive the poverty-riddled economy, attracting more foreign aid and investment in mining, power generation and other infrastructure projects.

Korea is seeking to boost its presence in the ASEAN country by sharing knowhow for its brisk economic ascent on the back of systemized, far-reaching industrialization, agricultural reforms and territorial development.

“Korea should craft a two-pronged policy targeting the public and private sectors simultaneously. It could help raise Myanmar’s capabilities in economic development, human resources and administrative reforms,” said Oh Yoon-ah, a researcher at the state-run Korea Institute International Economic Policy in a recent report.

Some 100 Korean businesses operate in Myanmar with a heavy focus on the garment sector, according to the Ministry of Knowledge Economy. Bilateral trade volume shot up more than 50 percent on-year to nearly $970 million in 2011.

A growing number of companies are seeking a foray into the country, which has one of the world’s largest natural gas reserves and deposits of iron ore, zinc, nickel and other minerals.

KOTRA dispatched a large-scale economic mission in April and launched a council in May with the ministry to help more than 110 corporate members branch out into the Myanmarese market.

Last week, a consortium led by state-run Korea Western Power Co. clinched an agreement with Myanmar’s electricity ministry to set up a 500-megawatt gas-fired plant and power transmission networks in Yangon by 2015. Other participants are Hyundai Engineering & Construction Co. and Hana Daetoo Securities, a local brokerage.

By Shin Hyon-hee (heeshin@heraldcorp.com)