Sustainable Economic Cooperation between Korea and the Middle East in Times of Lower Oil Prices

5 Pages Posted: 13 Apr 2017

See all articles by Kwon Hyung Lee

Kwon Hyung Lee

Korea Institute for International Economic Policy

Sung Hyun Son

Korea Institute for International Economic Policy

Yun Hee Jang

Korea Institute for International Economic Policy

Ryou Kwang Ho

Korea Institute for International Economic Policy

Date Written: April 5, 2017

Abstract

A global oil price decline since the second half of 2014 has negatively impacted the economies of GCC countries, which heavily depend on the oil and gas sector. This led to a decline in trade surpluses and undermined current account balances, resulting in a slowdown of economic growth in these countries. GCC countries are carrying out several policies, as they face slowing economic growth, deepening budget deficits, diminishing foreign investment and shrinking construction project markets due to lower oil prices. In response, a new cooperation framework is required to strengthen bilateral ties for shared growth. First, industrial cooperation should be reinforced to expand economic diversification and job creation in GCC countries. Second, energy security is one of the most significant rationales for bilateral cooperation between Korea and the Middle East, since Korea imports more than 60% of the oil it uses from GCC countries. Third, investment cooperation should be strengthened to facilitate joint investment in the region, including joint ventures. Fourth, institutional cooperation between governments is needed to share experiences and know-how obtained in the process of Korea's institutional reforms in the fields of tax, subsidies, privatization and FDI. Civil servant exchange programs will also contribute to deepening mutual understanding in the bilateral economic partnership.

Keywords: Economic Cooperation between Korea and the Middle East, Oil Prices, GCC

Suggested Citation

Lee, Kwon Hyung and Son, Sung Hyun and Jang, Yun Hee and Kwang Ho, Ryou, Sustainable Economic Cooperation between Korea and the Middle East in Times of Lower Oil Prices (April 5, 2017). KIEP Research Paper, World Economy Brief 17-07, Available at SSRN: https://ssrn.com/abstract=2951496 or http://dx.doi.org/10.2139/ssrn.2951496

Kwon Hyung Lee (Contact Author)

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Sung Hyun Son

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Yun Hee Jang

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Ryou Kwang Ho

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
36
Abstract Views
476
PlumX Metrics