This Country's Rags-to-Riches Story Is Making It Africa's New BFF
WHY YOU SHOULD CARE
Because China’s approach to Africa isn’t the only one.
By Taylor Mayol
Almost every story about China in Africa features a reporter strolling down a hilly road with a local kid trailing behind, shouting, “Ni hao! Ni hao!” True, this has happened to me, and the Chinese presence on the continent is striking. But today there’s another East Asian language cropping up — “Anyong haseyo!” the young ones call out. Enter: South Korea, a harbinger of change that brings new competition to the continent.
In recent years, South Korea has upped the ante on its engagement with sub-Saharan Africa. There’s been a massive boost in private investment and a wealth of new political relationships and hands-on development projects. Korea has even created its own Peace Corps-style organization, World Friends Korea, with around 700 volunteers in 30 African countries. Bilateral trade between South Korea and African countries jumped fourfold between 2000 and 2011 — from $5.7 billion to $22.2 billion — and exports to Africa rose five times in the same period.
That may seem small compared with $166 billion worth of trade for China in 2011, but as a percentage of Korea’s foreign aid budget — aid to Africa climbed from 12 percent in 2002 to 26 percent in 2012 — Africa’s importance to the country’s strategy is compelling. Because of the country’s role as a “middle power, Korea has a duty to contribute to Africa’s poverty reduction and economic development,” says Young Ho Park of the Africa team at the Korea Institute for International Economic Policy.
Korea believes it has something that China and the U.S. don’t: “been there, done that” experience and a rags-to-riches story that serve as an economic model for other developing countries. An aid recipient from World War II until the late 1990s — it received a total of $12.7 billion — Korea was officially switched to donor status in 2009 when it joined the OECD’s Development Assistance Committee. “Korea views itself as a responsible global player,” says Daragh Neville, projects officer for the Africa program at Chatham House. It’s evolved from a war-torn, aid-dependent republic to a high-income country and global exporter of tech and culture. After the Korean War, it was among the poorest nations in the world with a GDP per capita of $67 — about the same as Ghana at its independence — but by 2014 that number had reached nearly $28,000, earning Korea a spot in the economic big leagues with countries like Spain.
While the U.S. is famed for pushing for democracy alongside development, South Korea takes a different tack. The tiny country, about the size of Indiana, doesn’t shy away from working with quasi-authoritarian regimes that prioritize growth over democracy. Take Rwanda or Ethiopia, two of South Korea’s primary aid recipients and countries where the leaders are known as much for their economic aspirations as their heavy-handed rule. South Korea points to the success of its own postwar strongman, Park Chung-hee, who instituted the Saemaul Undong new community movement in the 1970s, credited with bridging the urban-rural divide and pulling South Koreans out of poverty.
Today, the Korea International Cooperation Agency, similar to a Korean USAID, has Saemaul Undong replica projects in 21 African countries. The ethos of these projects is duality: agricultural projects like chick hatcheries in Comoros or developing drought-resistant olives in Tunisia coupled with investments in technology. Perhaps this approach is most evident in Rwanda, a country with major informatics ambitions but where four out of five people are farmers. In 2014, the Rwandan government struck a deal with South Korea to install fiber optic cables throughout the East African nation — a move that would deliver 4G Internet to 95 percent of the country by 2017, up from from 8.3 percent in 2014. Then last October, South Korea unveiled a rural community development plan for Rwanda worth $11 million.
But of course, South Korea’s interest in Africa isn’t purely altruistic. There’s “economic gain” from securing natural resources such as oil and gas, says Park, and in fact, conglomerate SK Group already has stakes in eight oil fields in six countries in Africa. And on a continent with over a billion people and a growing middle class — albeit slowly — Africa’s market potential is massive. Samsung currently operates in 32 African countries and is designing products such as phones and refrigerators specifically with African consumers in mind. Not to mention Africa’s enormous unrealized potential as a major food producer — a fact not lost on South Korea, which imports some 90 percent of its food.
All told, foreign direct investment from South Korea to Africa reached $287 million in 2010, up from $24.3 million a decade earlier, according to UNCTAD. And while the East Asian country pursues its broader mission to establish a so-called “global Korea” and share expertise, its efforts to distinguish itself from China, seen by many as an extractive development partner, have not been entirely successful. A 2014 Chatham House report called South Korea the “lead villain” in illegal and unreported fishing off the coast of West Africa, which means it was operating in restricted areas and depleting stocks where countless residents rely on fishing for their livelihoods. And there was the highly controversial deal in Madagascar in 2009, in which South Korea’s Daewoo Logistics sought to lease roughly half of the country’s arable land. Malagasy people revolted, raising charges of neocolonialism, and the deal eventually foundered.
It remains to be seen if South Korea’s long-term bets on Africa will pay off, but K-pop may soon be blasting from matatu speakers. “Many Korea populations believe Africa is richer than we think,” says Park. And they might just be right.