The Department of Foreign Affairs and Trade, Australia

THE REPUBLIC OF KOREA: AN EMERGING ECONOMIC AND STRATEGIC POWER

Address by Mr Alexander Downer, MP, Minister for Foreign Affairs of Australia, to the Seoul Foreign Correspondents' Club, 1 July 1996

I am delighted to have this opportunity to address the Seoul Foreign Correspondents' Club, on this my first visit to the Republic of Korea as the Minister for Foreign Affairs.

The new Australian Government regards engagement with Asia as its highest foreign policy priority and the strengthening and diversification of Australia's partnership with the ROK is a fundamental element of this goal.

In one sense, Australia desire for greater engagement in Asia and a strong relationship with Korea are nothing new.

Australia's partnership with the ROK is built on long standing and solid foundations.

The first contact between Australia and Korea occurred in the mid-1880s.

Contemporary links began with the establishment in 1947 of the United Nations Temporary Commission on Korea (UNTCOK), which facilitated the transfer of power to a democratically elected Korean Government following the Second World War.

These ties deepened significantly during the Korean War when some 18,000 Australian troops served under United Nations Command. Three hundred and thirty nine Australians lost their lives during that conflict.

Again, relations between our two countries achieved an even more substantial footing when in 1965, the then Australian Government headed by Prime Minister Menzies signed a bilateral trade agreement with the Republic of Korea instituting ministerial trade talks - Australia's first such regular forum at that level with any country.

Today I would like to consider how Korea and Australia can again work towards achieving an even closer relationship.

Korea and Australia: A Unique Complementarity
The ROK's economic restoration and expansion since the devastation of the war has been breathtaking in scope. Looking at its contemporary prosperity and dynamism, it is difficult to recall that the ROK's per capita income was a meagre US$79 in 1960.

Since then, the ROK has averaged 8.2 per cent real GDP growth per annum. Between 1960 and 1995, the ROK's per capita GDP rose a staggering 13,000 per cent. Per capita GDP passed $10,000 in 1995 and is forecast to be $19,000 by the turn of the century.

The ROK is now the 12th largest economy in the world and is expected to be the 7th largest by 2020. Apart from Taiwan, such a prolonged period of economic growth has no parallel. It is an economic record which has captured the imagination of the rest of the world, and is a tribute to Korean industriousness, marketing and production skills.

What is less well understood in either of our countries is the major contribution Australia has made to the ROK's phenomenal economic success. Australian inputs - our coal and our iron ore - provided one of the important pillars on which this economic miracle was constructed. Australian raw materials were used to produce the goods that Korea subsequently sold on global and domestic markets.

BHP gave early assistance to POSCO in the development of their iron and steel industry. POSCO now is Australia's single largest customer in the world.

Equally, not enough people in either country appreciate the sheer size and dynamism of trade between Australia and the ROK. The ROK has now overtaken the United States as Australia's second largest export market. Bilateral trade last year rose nearly 30 per cent to A$8.3 billion. This level of trade shows every sign of growing to around A$12-15 billion by 1999.

Korea: An Emerging Economic, Political and Strategic Partner
South Korea is changing in fundamental ways. We are witnessing the country's transition to an influential middle ranking power in international affairs. Commensurate with this role, the ROK has been expanding, and Australia has warmly welcomed, its participation in multilateral political, security and trade organisations.

The distance the ROK has travelled in a relatively short period is perhaps most clearly demonstrated by the fact that, only five years after becoming a member of the United Nations, it has secured a seat on the UN Security Council for the period 1996-97 - clear testimony of widespread international support for and confidence in the ROK.

There are other indicators of the ROK's growing influence.

Along with Australia, the ROK was amongst the initial movers in establishing the Asia Pacific Economic Cooperation group (APEC). Our two countries are now working together closely to build on the success of the Bogor Declaration and the Osaka Action Agenda, through credible Individual Action Plans.

The ROK entered the ASEAN Post Ministerial Conference as a full dialogue partner in July 1991. Nevertheless the ROK has, like Australia, been a strong and effective supporter of the ASEAN Regional Forum (ARF), and of the evolution of a comprehensive ARF work program.

Seoul will be hosting the third Asia Europe Leaders' Meeting (ASEM) in the year 2000. Australia greatly appreciates the ROK's continuing strong support for Australia's inclusion in regional groupings such as ASEM and the Mekong Basin Cooperation.

The Australian Government strongly supports Seoul's application to join the OECD and is keen to see it accede by the end of 1996. Apart from being of direct benefit to South Korea, its membership is important for the entire region, not least because it should act as a catalyst for increasing the OECD's focus on the Asia Pacific region.

It is a matter of considerable importance to Australia that the ROK has become a significant dialogue partner on regional and international issues. This clearly reflects the growing commonality of our interests.

The Continuing Challenge of a Divided Korea

For most of the period since the Korean war the ROK's foreign policy has, understandably, been dominated by the threat posed by the North. It is a matter of considerable regret to all of us that these threats to stability on the Korean Peninsula persist.

But I must say that the ROK's spectacular economic development has been an unmistakable vindication of liberal, market economics over a command economy which has produced shortages and hardships. We saw this clearly in the former Eastern bloc of Europe in the 1980s, and we see it now between North and South Korea.

The Australian Government holds the firm view that, in the final analysis, the future of the Korean peninsula is in the hands of all Koreans. For that reason, Australia was quick to welcome the recent visionary initiative of Presidents Kim Young- Sam and Clinton in Cheju in proposing Four-Way talks as a means to break the impasse on the peninsula. Australia hopes that this initiative will lead to constructive dialogue - and the sooner the better.

Australia's support for progress on the Korean peninsula motivated the new Australian Government's positive response, soon after we assumed office, to the urgent funding needs of KEDO. Australia, like other KEDO members, believes that the consortium has a vital role to play in assuring stability on the peninsula and in North East Asia more generally. It has been a matter of considerable regret that some countries have not shared this appreciation of KEDO's role - and have not contributed more generously to its funding.

A similar appreciation lay behind the Australian Government's recent decision to grant a further A$500,000 to the humanitarian needs of the people in the North as assessed by the United Nations. Australia welcomes the recent ROK decision to contribute US$3 million to the UN emergency appeal for the DPRK. The decision underscores the ROK's continuing humanitarian concern for fellow Koreans living north of the 38th parallel.

Given the situation in the North, it is unlikely to be the last time its people will need outside humanitarian aid.

Australia recognises that the ROK's decision to assist with humanitarian aid to the North was, no doubt, not an easy one to make, particularly in view of the lack of DPRK responsiveness to continuing international calls, including from Australia, for meaningful North-South dialogue.

South Korea cannot do it alone. It needs the constructive cooperation of the Pyongyang. The DPRK should appreciate that it needs the ROK to provide the resources, commitment, technology and know how required to help the people of North Korea achieve acceptable standards of living. The limited international response to the UN's first humanitarian appeal on behalf of the DPRK underscores this point.

The challenge for the ROK, and indeed other countries interested in the security of the Korean Peninsula, is to find the right balance in engagement with the North, particularly in the humanitarian area, while not rewarding intransigence or a refusal to embark on meaningful economic reforms.



A forward looking policy which is at the same time measured but generous will require major international statesmanship, conviction and perseverance - qualities that the South Korean people and Government have demonstrated amply throughout the ROK's economic transformation from the devastation of war.

From Australia's viewpoint, it is important that the building blocks for future cooperation and for future reunification be put in place. Australia will continue to assist the process of dialogue and reconciliation wherever possible and appropriate.

Liberalisation and Globalisation

A key aspect of President Kim Young-Sam's economic reform policy has been to liberalise further the ROK's economy. I am mindful that President Kim announced his concept of globalisation for Korea or "segyehwa" [PRON. SAIR-GEH-HWA] during his visit to Australia in late 1994. The President's `Sydney Declaration' was a significant milestone. It looked to open the ROK's economy and culture to the world, and gave a commitment to continue the process of democratising the Korean political system.

Much has been achieved in the intervening years. I am delighted that President Kim reaffirmed his Government's vision of globalisation in his 1996 New Year's speech.

Australia wholeheartedly supports the thrust of these reforms. Pleasingly, part of the liberalisation and globalisation agenda involves exposing the rest of the world to the ROK's rich, but under-appreciated culture.

The Australian Government is taking a similar policy course to make Australia more internationally competitive, to integrate Australia more fully and effectively in Asia, and to ensure that Australia plays an active role in helping shape the regional and international economic and security architecture of the 21st century.

Taking the Next Steps in the Bilateral Relationship

The Australian Government recognises that the impressive commercial and economic relationship existing between our two countries cannot be left unattended. For it to be sustained into the next century, our two countries must continue to work hard at expanding the relationship. The Australian Government is firmly committed to raising the profile of the bilateral relationship in Australia and hopes to see the same occur in the ROK.

Both countries have a strong commitment to diversifying the range of goods and services traded between us. This effort has already yielded results. The composition of Australian exports to the ROK has changed rapidly from commodities towards elaborately manufactured goods and services.

This is a clear sign of the increasing competitiveness of Australian goods. It indicates the extent to which Australia is now identified as a strong supplier of sophisticated, high technology products and services.

Cooperation in other areas is also proceeding apace. Earlier this year, for example, our two countries signed a Memorandum of Understanding on cooperation in environmental technology - an area of major importance to the ROK.

Striking growth is also being achieved in tourism. The ROK has become one of Australia's fastest growing tourist markets. By the turn of the century, the number of Korean visitors to Australia is forecast to surpass 500,000. Australian tourism to the ROK is small, but is growing at a fair pace.

In the education market, Australia has become the third major destination for Koreans studying abroad, after the United States and Japan. Some 9,000 student visas are expected to be issued this year, a 50% increase on 1995, which places Korea at the top of Australia's student education market.

No commentary on the growth of our bilateral relationship would be complete without acknowledging the extraordinary contribution of the Korean community in Australia. As a multicultural society, Australia is proud of their contribution in a wide variety of fields. Koreans in Australia have become increasingly prominent in small and medium enterprises and are now exporting their products back to Korea. Both countries are fortunate to be able to benefit from the personal bonds these people add to the relationship.

Bilateral Initiatives on Multilateral Issues

The Australia-Korea relationship has clearly entered a new stage of development and dynamism, reflecting our common interests and increasing capacity to co-operate to influence regional structures.

Next week, Australia and the ROK will conduct the first ever political-military (or pol-mil) talks held between our two countries. They will involve an exchange of views on strategic and security issues of mutual interest. For Australia, these talks reflect the fact that we regard the ROK as a major regional power, with a key role to play, particularly in North Asian strategic and security affairs.

Equally, consultations between Australia and the ROK on UN General Assembly matters will be inaugurated later this month, while inaugural annual aid discussions were held last month.

The Government's Overall Approach to Korea

The Australian Government's objective , as I have made clear, is to strengthen Australia's relations with the ROK across the board, and to engage political and business leaders in both countries more effectively than in the past. Australia aims to be progressive in its trade dialogue with Korea. The Government wants to encourage more ministerial, parliamentary, and senior business visits in both directions, and to increase science and technology cooperation.

Conclusion

These contacts point to the most important aspect of any relationship between two countries: that of its people.

Perhaps the surest sign of the strength of Australia and Korea's relationship is the astounding statistic that by the turn of the century, the number of Korean visitors to Australia is forecast to surpass half a million people. It is pleasing, too, that Australia's visits to Korea are also growing at a fair pace.

This kind of people to people contact is indispensable in strengthening the relationship between our two countries.

Particularly important, too, is the enormous increase in the number of Korean students now studying in Australia. In the education market, Australia has become the third major destination for Koreans studying abroad, after the United States and Japan.

Some 9,000 student visas are expected to be issued this year, a 50 per cent increase on 1995, which places Korea at the top of Australia's student education market.

There are some who say these student links are the key to our relationship. And not without good cause either. In the long run, those links will stay with Korea's future leaders for a lifetime.

These visits and exchanges are a clear indication of the burgeoning relationship between our two countries and of the very positive interaction which is occurring between the people from the Korean peninsula and the island continent of Australia.

As our two peoples relate to each other, come to understand our different histories and traditions, I am confident of one thing: that the more we meet and interact, the more we will grow to appreciate and respect each other and grow as neighbours and friends to our mutual advantage.

That is the way it should be. One of my predecessors Richard Casey, who perhaps more than anyone, pioneered Australia's modern relationship with our Asian neighbours, wrote a book about Australia's foreign policy which was simply and appropriately entitled "Friends and Neighbours." What Casey saw then, is even more possible for us today. It is up to all of us to make it happen.