BELARUS NEWS AND ANALYSIS

DATE:

11/02/2007

Belarus companies urged to look east

Belarus and Korea have more in common than most people think. For one thing, geographically they are two small countries sandwiched between powerful neighbors.

Both countries also share the problem of a lack of resources and so rely heavily on their manufactured exports to sustain growth.

"We are in the same situation as Korea; Korea is totally export oriented and totally dependant on imported raw materials," said Belarusian Ambassador Aleksandr Guryanov during an interview with The Korea Herald.

The ambassador has been in Seoul for almost a year and during that time has been active in promoting business exchanges between the two countries, but it hasn't been easy, he confessed.

"For the moment we are not satisfied with the level of trade volume but it's steadily growing," he said.

Trade between the two countries stands at about $100 million with a deficit on the Belarusian side. During the past few years Korean companies have been very active in promoting and selling their products in the Belarusian market.

"Still, we have a problem of active business exchange because we feel those branches of industries aren't developing, since there are no contacts there is no progress," he said.

Guryanov explained that Belarusian businesspeople mostly look to the west for business development, because of its proximity, but his message for them is to look east.

"I tell them that sometimes you should travel a greater distance to find a better deal," he said.

At the vanguard of the Korean-Belarusian relationship is the science and technology sector.

Korean companies and scientific institutions have not been hesitant in traveling the great distance between the countries to make contacts and look for technologies that can benefit their organizations back home.

"We have good progress in this sector," he said. "Korean companies have found very sophisticated technologies in Belarus. They are especially interested in materials, biotechnologies and others."

To help grow this relationship, both trade ministries have signed and subsequently established close relations and agreements recently.

Companies from the biotech industry in both countries have invested large sums of money in setting up a joint research center in Minsk.

"All the technologies they (Korean scientists) found in Belarus are developed in that center and then sent to Korea for implementation in their enterprises. We found a very interesting thing that Belarus now has a very strong basis in theoretical sciences. But at the same time Korea is famous for practical implementation of modern technologies so we matched our interests," he said.

Samsung and LG are just two of the many large companies who are using the technologies developed out of this center.

"This is an example of good cooperation between both countries and I always say that we should focus on our sciences," Guryanov said.

The 34-year-old ambassador explained that he is very interested in implementing joint projects in Belarus.

Their selling point is that they are a transit country on the border between two huge markets: The European Union on one side and the Russian Federation and the Commonwealth of Independent States on the other.

Another plus in developing joint ventures with Belarus is that there are six economic zones where Korean companies can enjoy several benefits when exporting their manufactured goods to the Russian market, such as no taxes or duties. For goods going into the EU, Belarus' agreements will give Korean companies the advantage of no taxes on exported products made within these economic zones.

On the other side of this relationship, Belarus' top exported sector is the semiconductor and microchip industry.

"This is good because Korea is No. 1 internationally in this field and everyone is asking me why I'm so lucky to provide shipments of this product."

It is no secret that Korea makes very sophisticated microchips that power some of the most advanced computer systems in the world, but for everyday products such as television sets and air conditioners less advanced microchips will suffice.

"There is no production of those microchips in Korea so we found a very good niche," the ambassador said.

Last year both countries started a new agreement for companies that produce electronic components for automobiles, which has resulted in microchips being installed in some GM Daewoo cars.

"Belarusian electronic companies are buying a lot of LCD components from Korea which we think is a good area for cooperation," he said.

When people go out to buy a television set they are automatically attracted to the new LCDs from companies like LG and Samsung.

It's become such a hot seller that LG has recently opened a factory near Moscow.

So here is the problem that Belarus had to overcome. Of course LG doesn't need to open a factory in Belarus now that they have a factory pumping out sets for that part of the world.

"So we are now using parts from LG and installing them under a Belarusian company's name," he said. "The thing is LG will never be able to produce a cheaper product in the Russian market."

It is true that these sets are pricey, making it possible for the majority of those sets to be sold in large cities like Moscow and St. Petersburg while leaving out other parts of Russia and CIS countries.

"So they will buy Belarusian TV sets which have LCD panels from Korea. This is a good example of cooperation. We have two companies that produce TV sets: one is using Samsung LCD panels the other is using LG."

Guryanov is hopeful trade will increase in the years to come with more businesspeople traveling to and from both countries.

"We are planning a visit to Korea by our prime minister sometime this year. In Belarus the prime minister is the chief economist of the country so he will bring with him heads of companies from Belarus."

This year is also the 15th anniversary of diplomatic relations between the two countries and both are celebrating this important year with the opening of the Korea-Belarus Friendship Association. "In Belarus we have had a Belarus-Korea friendship association for the past five years and it is working very well."

Guryanov was sent to Korea by his president with the aim of building on the practical cooperation between the two countries - a sentiment that was shared by President Roh Moo-hyun in a conversation with the ambassador.

"I have many ideas in my young brain but sometimes it's hard to implement them because of the distance, but we will," he said with optimism.

(yoav@heraldm.com)

By Yoav Cerralbo

Source:

http://www.koreaherald.co.kr/SITE/data/html_dir/2007/02/12/200702120026.asp