Korea urged to bolster ties with Saudi Arabia in construction, infrastructure, ICT and clean energy

President Yoon Suk Yeol, second from right, shakes hands with one of the Saudi officials at King Khalid International Airport in Riyadh before departing the country to head to Doha, Qatar, Oct 24. Yonhap

The Federation of Korean Industries (FKI) urged Korea to maximize $15.5 billion worth of deals that were inked during President Yoon Suk Yeol's latest visit to Saudi Arabia by focusing on large-scale construction and infrastructure, ICT and eco-friendly sectors, the country's major business lobby said, Monday.

The proposal came as the association sought suggestions from Dankook University's Gulf Cooperation Council (GCC ) Institute for ways to expand Seoul-Riyadh economic ties. Yoon visited the Middle Eastern country with a delegation comprised of Korea's key business leaders earlier this month. The visit resulted in Korea signing 46 memoranda of understanding (MOU) and contracts with the kingdom's state-run firms.

The report highlighted that Saudi Arabia has the biggest economy in the Middle East and North African region, accounting for over 25 percent of the region's overall GDP valued at $4.41 trillion last year. As the world is trying to neutralize carbon emissions, this will reduce the world's dependence on fossil fuels and Saudi Arabia, one of the biggest oil producers in the world, will have to diversify even more of its local industries, the report said.

Amidst the shifting prospects for the country, Korea has an advantage built over the past 60 years of bilateral exchanges, according to the FKI. Korea has dispatched workers to construction sites in Saudi Arabia for 1,800 projects worth a combined $160 billion. As of September, Korea won 15 projects in Saudi Arabia worth $6.24 billion this year, surpassing $3.48 billion won in 2022. Vindicating the rising trade levels, the Saudi Arabian government in 2017 selected Korea as one of its eight key allies, a fact the report said will boost future bilateral ties.

But as the Saudi Arabian government is now shifting policies to utilize more local workers instead of foreigners, Korea should monitor future developments there, according to the report.

ICT, meanwhile, is one of the fastest-growing industries in Saudi Arabia and Korea. And with Korea's global competitiveness in the field, it can be most influential in the Saudi Arabian digital market, according to FKI.

With a goal to increase renewable energy output to its national power grid to 50 percent by 2030 and neutralize carbon emissions by 2060, the Saudi government announced plans to build 48 renewable energy plants, the FKI said. The country's expanding renewable energy market will need Korea's presence in the sectors of plant construction, photovoltaic farms and hydrogen production, according to the report.