By Chad 0′Carroll

News emerged today on the Globes.il news website that suggests Israel expects South Korea to be potentially interested in acquiring Iron Dome technology if talks with Daewoo Shipbuilding & Marine Engineering Co. about the purchase of four patrol boats for Israel’s navy prove successful. As conflict in Gaza continues to escalate, news about the repeated success of Israel’s Iron Dome missile defense system in protecting the country from Hamas’ rocket threat continues to make the system more attractive.

With Israeli officials saying that 80-90 percent of attempted intercepts have now succeeded, some are now citing Iron Dome’s record as evidence that Ronald Reagan’s dreams of building a space based missile defense might have been well founded.  And if Iron Dome proves missile defense really works, might South Korea now be looking at a potential defense against the threat of North Korea’s wide ranging projectile arsenal?

Alas, anyone hoping that Iron Dome might be a quick fix to North Korea’s missile threat will unfortunately be mistaken. That’s because the missiles owned by North Korea’s military vary significantly from the type of rockets possessed by the likes of Israeli’s local foes – Hamas and Hezbollah.

Investing huge resources into their development since the early 1970s, North Korea today possesses a large arsenal of SCUD variant ballistic missiles (Hwasong series).  Bringing most of South Korea into range, these missiles provide Pyongyang with a delivery system for kinetic and non-conventional payloads (nuclear, chemical, biological).  Travelling at several times the speed of sound and at extremely high altitude, it not hard to understand why they are difficult to defend against.  Indeed, these characteristics allow North Korea to hit targets extremely quickly and in the event of carrying a non-conventional payload, with potentially extremely deadly results.

In contrast to North Korea’s current ballistic missile capability, Israel faces a missile threat of a very different nature.  Although some foreign made rockets within the arsenal of Hamas can travel up to 75km, the majority of its “Grad” type devices have a range of just 20km. Often home-made, these small rockets carry kinetic payloads of between just 5-75kg, meaning their destructive impact is relatively low when compared to WMD carrying ballistic missiles.  And because they are deployed using primitive launching technology, these short-range rockets fly at low speed and low altitude – making them relatively easier to defend against.

Debates have long-swirled in military circles about the utility of ballistic missile defense systems. While some argue that with sufficient infrastructure these systems could theoretically intercept the types of missiles North Korea possesses either at launch or in their final phase, others suggest that much like trying to shoot a bullet with another bullet, this type of threat is almost impossible to defend against.   In contrast, the low-speed and low-altitude characteristics of the rockets that Israel faces mean they are much easier to intercept after launch than a ballistic missile.  Having kicked off the Iron Dome project after the Second Lebanon War of 2006, it is therefore understandable that Israel was able to enjoy the level of success it did in just six years.

But while Iron Dome will be of little use in defending South Korea from North Korea’s ballistic missiles, one area that it could prove useful in is intercepting artillery shells like those used in the bombardment of Yeonpyeong, two years ago. That’s because Iron Dome has a second role beyond intercepting rockets: to counter the flight of 155mm artillery shells and mortar rounds.

As we know, North Korea possesses thousands of artillery units, many of which are positioned strategically along the DMZ.  Although Iron Dome would likely be quickly overwhelmed in the case of a large scale simultaneous artillery attack, it could nevertheless be a potentially useful defense for South Korea against small-scale attacks such as the one witnessed at Yeonpyeong two years ago. This is all the the more true when considering that Iron Dome is able to respond to multiple threats simultaneously – something that would have been useful in intercepting the several artillery units North Korea used to attack the island last year.

Time will tell if South Korea decides to purchase the Iron Dome defense system and it seems that much relies on whether or not Israel is able to buy the naval craft from the ROK that it currently desires.  But whether the extremely expensive price tag will be worth it for South Korea (each battery costs $50 million while the individual missiles between $40,000 to $100,000) to defend against what could be rare small scale attacks is hard to judge – especially when considering the North Korean ballistic threat will remain.

Chad 0’Carroll is the Director of Communications for the Korea Economic Institute. The views expressed here are his own.

Photo from Israel Defense Forces photostream on flickr Creative Commons.

By Troy Stangarone

With sanctions by the United States and the European Union continuing to tighten on Iran, Korea has announced that it will halt imports of Iranian oil as of July 1. Korea’s decision makes it the first of Iran’s major export markets, and a key Asian consumer of Iranian oil, to fully cut off its supply of Iranian crude. Korea’s move contrasts with Iran’s other key export markets and could pay dividends to Korea in the future, but does not come without costs.

While the United States recently granted Korea a 180 day waiver from U.S. financial sanctions, the European Union has refused to grant a waiver from its ban on the sale of protection and indemnity insurance (P&I) for shipments of Iranian oil. The EU’s sanctions have proven effective because 90 percent of P&I is handled through European insurers, including 100 percent of Iranian shipments. Without the ability to purchase insurance for their shipments, Hyundai Oilbank and SK Energy would have been unable to insure a tanker’s cargo, its liability after a collision, environmental pollution and the risk of war – a real potential given Iran’s prior threats to seal off the Strait of Hormuz and Israel’s unease with Iran’s nuclear program.

Asian countries are the biggest purchasers of Iranian oil, accounting for 60 percent of Iran’s oil exports. However, in contrast with Korea, the 4^th largest purchaser of Iran’s crude oil, Japan, India, and China have all sought ways to get around the EU ban. Japan recently passed a law to provide its importers with sovereign, state based, insurance for their imports,  an option Korea choose not to take. India and China have reached varying deals for Iran to provide insurance and ship the oil.

While Korea imports almost 10 percent of its oil from Iran, it has been preparing for this eventuality. Had it not received a waiver from U.S. sanctions, it would have likely had to take similar steps. Knowing that, Korea has essentially taken three measures to address the crisis. First, it sought to build up its oil reserves.  It stockpiled Iranian oil, increasing imports by 57 percent in April, before declining by 40 percent in May as it worked to secure a waiver from the United States. At the same time, Korea sought out alternatives to Iranian oil during President Lee Myung-bak’s trip to the Middle East in February. The deals struck on that trip have allowed Korea to replace its imports of Iranian crude with other suppliers in the Middle East. According to Reuters:

Shipments from Kuwait in the first five months rose 23.3 percent to 348,493 bpd, while those from Saudi Arabia rose 7.9 percent to 838,678 bpd. Imports from the UAE increased 8.6 percent to 258,263 bpd, the KNOC data showed.

January-May imports from Qatar rose 14.3 percent to 280,829 bpd.

In the short term, Korea has addressed its energy needs in a manner that reduces its risks from the uncertainty surrounding Iran’s nuclear program. It will also have distinguished itself from its competitors in the region by not skirting the sanctions. This will likely not go unnoticed by the United States, the European Union, and numerous Middle Eastern states that have concerns about Iran’s nuclear program. This could benefit Korea through deeper ties with other states in a key region for meeting Korea’s energy needs.

However, there are potential costs. Iran has not yet made a statement on Korea’s decision, but Korea does have broader interests in Iran that its decision to halt imports could affect. First, Korea has developed a significant commercial relationship with Iran and it has been becoming an increasingly important market for Korean exports. Over the last decade, Korea has seen its exports to Iran increase from $1.2 billion to $6.0 billion last year. Iran could seek to limit the access of Korean exports to its markets in retaliation. Additionally, should a solution be found to the Iranian nuclear crisis, Korea could find itself less welcome in Iran than Japan, India, and China, all of whom will continue to import Iranian oil.

While the potential for costs exists, Korea has deftly handled a difficult situation. As an energy importer, it has managed to replace most of the oil that it would have lost and ensure that its broader economy will not be impacted by either U.S. or European sanctions on Iran. It also avoided having the state take on additional liabilities by not choosing to supply insurance for Iranian shipments. At the same time, the steps it has taken should also help Korea to deepen its ties with more stable energy suppliers in a volatile region.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade at the Korea Economic Institute. The views expressed here are his own.

Photo from Daniel Ramirez’s photo stream on flickr Creative Commons.

By Troy Stangarone

In recent years, the perception of Korea on the global stage has begun to change. This shift is partly a reflection of Korea’s emerging economic stature. While China may get much of the press, decades of economic success have led other developing nations to view Korea as a model for economic development, a role which Korea has begun to embrace.  At the same time, Korea’s own economic growth has seen it become one of the top ten trading nations and an emerging voice in global economic forums such as the G-20.

While Korea’s economic success has brought it a more significant role on the global stage over the last few years, that same success has also expanded Korea’s national interests around the globe. This is perhaps nowhere more evident than in the Middle East, where Korea’s interests and relations are rapidly changing.

While the Middle East has long been a source of energy imports, Korea’s own trade with the region was often limited, though the region was a significant source for construction projects. In the last decade alone, Korean exports to the Middle East have grown from only $7.1 billion in 2001 to $34 billion last year, or nearly two-thirds of Korea’s exports to the United States. At the same time, the Middle East remains a key supplier of energy to power the Korean economy with the region accounting for about 87 percent of Korea’s oil imports and nearly 50 percent of its imports of natural gas.

Korea’s dependence on the Middle East for energy and its success in developing export markets in the region gives Korea a strong interest in peace and stability in the region. At the same time, Korea is seen as a more attractive partner in the Middle East. In a recent interview with the Korea Times, Saudi Arabia’s Ambassador to the Korea said that “The Kingdom pays special attention to its relationship with the Republic of Korea, in recognition of Korea’s leading role in the international community.”

The enhanced standing that Korea is developing in the region was evident on President Lee Myung-bak’s recent trip. Ostensibly about securing commitments for increased oil supplies from the region in anticipation of cooperating in U.S. sanctions efforts towards Iran, President Lee left the region with an agreement to raise Korea’s relationship with Turkey to that of a strategic partnership, the establishment of a high level cooperation committee to handle cooperation between Qatar and Korea on economic and security issues, and an agreement to negotiate a defense cooperation pact with Saudi Arabia, which will send its first military attaché in Asia to Korea.

On the economic side, President Lee also saw benefits. With indications that Korea is preparing to cut its imports of oil from Iran (which accounts for roughly 10 percent of Korea’s oil imports) by upwards of 50 percent, Korea secured a pledge from Saudi Arabia to make the difference in any oil shortage and a new 20 year contract to supply crude oil to Korea.  Qatar also agreed to a 20 year contract to provide Korea with an additional 2 million tons of liquefied natural gas per year.

With the region as a whole undergoing significant political change, Korea’s growing ties with Turkey could also be a strategic benefit to Korea in the long run as many of the transitioning governments in the region look to Ankara as an exemplar of Middle Eastern democracy. To those ends, Korea and Turkey are already in the process of negotiating an FTA that could serve as a broader Middle East export platform for Korea and the two sides also agreed to resume talks on the construction of two nuclear reactors in Turkey. If successful, the talks would represent the second major nuclear contract for Korea after its 2009 deal to build four plants in the United Arab Emirates.

However, despite growing ties to the Middle East, Korea also finds itself more exposed to instability in the region. The current confrontation with Iran has put the majority of Korea’s oil imports at risk should tensions over Iran’s suspected nuclear program break out into conflict, while the tumult of the Arab Spring has impacted Korea’s exports to some of the impacted nations in the region, such as Libya where exports fell from $1.4 billion in 2010 to a mere $181 million in 2011. While not as extreme a drop, even exports to Egypt fell from a high of $2.2 billion to $1.7 billion as a result of the transitions taking place in the region.

Korea has been able to benefit from increasing exports to the Middle East as part of a conscious strategy to diversify its export markets. Beyond the Middle East, Korea has also made increasing inroads into Latin America and Africa and has developed a strategy of using FTAs to ensure that Korea is not dependent upon any one market for its exports. At the same time, while Korea has been pursuing more renewable resources and energy efficiency under its “Green Korea” policies, it has not yet been able to successfully diversify the sources of its energy imports.

In the long run, Korea is likely to benefit substantially from enhanced ties with the Middle East. If new, democratic governments in the region are able to expand the benefits of economic growth to the wider population, Korea would likely benefit from increasing consumer markets in the region. However, as its energy and economic ties to the region increase, Korea will also find itself increasingly caught in the conflicts of the region. So far, Korea has managed to navigate these challenges in the Middle East well, as long as it continues to do so it will likely see its status in the region rise.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade at the Korea Economic Institute. The views expressed here are his own.

The photo is from the dead pixel’s photo stream on flickr Creative Commons.

By Troy Stangarone

In his remarks before Congress, President Lee Myung-bak pledged to help Libya through its transition saying “We will take part in the international effort in bringing democracy to Libya and rebuilding its shattered economy.”  While Korea’s efforts in helping Libya are laudable, Korea may also be in a position to help utilize lessons from its own development to help with the transition in the Middle East.

In the aftermath of the Korean War, Korea had very little industry or resources with which to develop its economy. However, over the last sixty years Korea has gained a wealth of experience as it successfully made the transition from developing to developed economy. Since 2004, Korea has sought to share that knowledge with other developing countries, and to that end the Korean government has supported the Korea Knowledge Sharing Program. As of 2010, the program has been involved in research and consultations with approximately 20 countries and 200 topics and counts among its successes the Kuwait Five-Year Economic Development Plan, the establishment of the Vietnam Development Bank, and the Navoi Free Economic Zone of Uzbekistan.

Beyond its own efforts, Korea sought to place the issue of development on the agenda at the Seoul G-20 Summit as it worked to become the ‘bridge’ between the developed and developing world. While not what was envisioned at the time, marrying Korea’s efforts through its Knowledge Sharing Program with an augmented version of the G-20 development agenda agreed to in Seoul might be an ideal means to provide and coordinate technical economic assistance from Korea and other G-20 nations. Critically, the G-20 agenda also includes a knowledge sharing component. Since the G-20 includes both advanced and developing nations, it may be viewed in a positive light in the region and have more practical experience to draw on.

At the same time, much like Egypt, Tunisia, and Libya, Korea has experienced a transition from dictatorship to democracy. Each of these nations would benefit from technical assistance with the transition to democracy as they build democratic institutions and organize free elections.  This may especially be the case in Egypt where concerns over backsliding by the military in the transition to democracy have already begun.  Korea could share its lessons from this difficult process as well.

A successful transition and stability in the Middle East matters for Korea as well. Many of these markets had seen significant increases in exports from Korea over the last decade before the Arab Spring took hold. Taken as a whole, the Middle East and North Africa now imports roughly two-thirds of what the United States imports from Korea. The region is also a key source of energy for the Korean economy. Korea currently imports nearly three quarters of its oil from the Middle East, as well as a significant portion of its natural gas.

The transitions in the Middle East have created a great deal of uncertainty in the region over the last year.  However, they also represent a challenge for the international community that seems to be ideally suited for Korea’s participation as it seeks to become more of a global player and to share its experiences with other developing countries.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade for the Korea Economic Institute. The views represented here are his own.

Photo by mbaudier, Flickr Creative Commons