What do Peru and South Korea have in common?
* By Jorge Roldán, Chief of the IIC’s Technical Assistance and Strategic Partnerships Division, and Helga Flores, Principal IIC External Relations Advisor
Since Peru and South Korea signed a free trade agreement in 2011, the Andean country has risen into fourth place among its competitors in the region that export to Korea. Today, the land of the Inca sells almost a third more to Korea than it did three years ago and is becoming increasingly important as the nerve center of exchange between Latin America and the Asian tiger.
AUGUST 14 2020
[caption id="attachment_1874" align="alignleft" width="500"]
Participants at the IIC B2B event in Lima[/caption]
As South Korea is located at the tip of a peninsula, it seeks a stable supply of natural resources of the kind that are abundant in Peru. For its part, Peru has increased its exports of raw materials and agricultural goods by more than 40% between 2012 and 2013.
The two trade partners are currently entering a new phase of their economic relationship that goes far beyond raw materials. In addition to their traditional exchange in commodities, Korean companies are now looking to Peru for joint entrepreneurial opportunities in specialized fields like intelligent hospital management.
To support the creation of these new trans-Pacific businesses, the Inter-American Investment Corporation (IIC) is building bridges with the Korean Council on Latin America and the Caribbean to enable companies from both countries to meet face to face. The effort is part of a broader strategy by the two institutions, with similar initiatives carried out with entrepreneurs from the Dominican Republic and Colombia.
At a recent event in Lima, almost 100 small and medium-sized enterprises (SMEs) from Peru and Korea participated—not to discuss, for the umpteenth time, opportunities for trade with Asia but to seize very specific opportunities for joint enterprises in everything from digitizing government to intelligent transportation, from manufacturing to energy and robotics. The contacts made between Asian and Latin American entrepreneurs are expected to lead to the creation of joint ventures under an economic cooperation arrangement that goes beyond the promotion of exports and imports.
The South Korean government has always expressed great interest in developing SMEs in Latin America and the Caribbean, and it is no coincidence that it has established a US$40 million fund at the IIC to promote their growth and foster joint businesses through activities like the event held in Lima.
As a member of the Pacific Alliance, Peru is ever more focused on opportunities abroad. It has made clear its desire to strengthen its trade relationship with South Korea through greater exchange and through knowledge-sharing activities. Now that the SMEs on both sides of the Pacific are establishing new business opportunities, the bond is stronger than ever.
So, what do Peru and South Korea have in common? SMEs looking to complement one another and catalyze a new economic relationship between the two countries. And if all goes well, the coming years will see jointly-owned businesses and bilateral trade volume that surpasses the US$3.13 billion in imports and exports seen last year.
Follow the IIC Twitter handle at @IICinfo.
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