South Korean companies shelve Libya projects as workers flee riots
South Korea, one of the biggest investors in construction projects in the Middle East for more than 40 years and a major importer of oil, may have more to fear than most as it evacuates Koreans in Libya.
Seoul, South Korea — Hundreds of South Korean workers and family members awaited evacuation Thursday from riot-torn Libya amid fears that protests there would escalate into attacks on foreign companies throughout the Middle East.
South Korean officials said a special plane is on the way to extricate Koreans from Tripoli and that there were plans to send ferries to Tripoli and the eastern city of Benghazi after rioters attacked half a dozen Korean projects, injuring three South Korean workers and a number of others from elsewhere in Asia.
As foreign companies began to shut down projects across Libya, the United States and other countries with stakes in the oil-rich Libyan economy also began evacuating citizens, issuing travel warnings while the death toll in clashes between government forces and demonstrators soared above 1,000.
South Korea, one of the biggest investors in construction projects in the Middle East for more than 40 years and a major importer of the oil needed to fuel its spectacularly successful economy, may have more to fear than most.
On top of the rioting and looting of foreign companies in Libya, Dr. Lee cites oil prices rising above $100 dollars a barrel as reason for concern. The rising price of oil, he says, was the main topic at an emergency meeting Thursday at the Blue House, the center of presidential power.
“There is risk,” says Lee when asked about the possibility of violence against foreign interests erupting in other Arab countries caught up in a democracy movement that also bears parallels to mass protests here that ended military rule and led to elections in South Korea in 1987. “The fear is very high.”
Korean officials believe rioters from poverty-stricken regions of tend to see foreign companies as oppressors ripe for looting. The level of poverty, they say, is particularly low among tribal groupings in the Libya's east, where looters stole or wrecked vehicles and set fire to buildings.
Only a speed bump, says Hyundai
Hyundai officials are convinced, however, that the evacuation of 100 Hyundai workers, including 22 Koreans and 78 from other countries will bring only a temporary halt to a wide range of projects.
Whoever finally wins in the power struggle in Libya, says Yoon Young-Keun, a Hyundai Construction manager in Seoul, “they need contractors.” As for concerns that Islamic radicals might eventually come to the fore, he says, “We can go with them, too.”
That attitude reflects Hyundai’s long experience in a region in which it has built port facilities, hospitals, apartment blocks, highways, and bridges, among other projects, since the late 1960s. A major figure in that success was South Korea’s President Lee Myung-bak, who rose to chairman of Hyundai Construction, the “mother company” of the Hyundai empire, in the 1970s.
A 'golden land' for Korea
“The Middle East has been the golden land for Korea,” says Park Hyun-do, senior researcher in the Middle East Institute of Myongji University here. “It’s been the land of opportunity since the 1970s.”
Mr. Park fears surging emotions may also turn against Israel, always a target of Arab wrath. “I worry about another possible Arab-Israeli conflict,” he says.
Aside from the danger facing construction projects, Japan and South Korea as huge oil importing economies face the impact of Middle East mayhem on oil prices. Both countries rely almost totally on oil imports, 85 percent of it from the Middle East.
“We are a major oil importer and a large investor,” observes economic adviser Lee Jong-wha. “Developments in the Middle East do have a large impact on the Korean economy. There could be expansion of tensions. If oil prices increase by 10 to 20 percent that has a significant impact.”
For now, however, Korean officials say they do not have to go into emergency reserves while the Korean economy is predicted to grow by 5 percent this year. Korea gets 40 percent of its oil from Saudi Arabia and much of the rest from Persian Gulf states while importing five percent from Libya.
“We wonder about what’s going on after the democracy movement,” says Song Dae-sung, president of the Sejong Institute, an influential think tank here. “Liberal democracy is so difficult. I worry so much about the consequences.”