Panama

The two Koreas get a very different reception in Panama

 

Special to the Miami Herald

Panama’s July 14 seizure of a North Korean-flagged freighter carrying undeclared military cargo came just days after South Korea announced its intention to explore a free trade agreement with the Central American nation.

“We are promoting the investment of Korean companies in Panama to reinforce trade,” said Cho Byoung-lip, South Korean ambassador to Panama. “In this sense, the signing of an FTA between the two countries will serve as a catalyst for the promotion of trade and investment.”

In Panama, the relationship with the two Koreas couldn’t be more different.

As Panama continued to search the freighter Chong Chon Gong this week for military equipment that Cuba said was being sent to North Korea for repair but was buried under sacks of sugar, relations with South Korea were on an upward track.

Seoul said it appreciated Panama’s seizure of the freighter and its suspicious cargo. “If the shipment turns out to be in breach of U.N. resolutions, we expect the U.N. Security Council’s sanctions committee to take relevant steps expeditiously,’’ said a South Korean foreign ministry official last week.

Panama doesn’t maintain diplomatic ties with the Democratic People’s Republic of Korea, the formal name of North Korea.

But diplomatic relations with South Korea go back more than 50 years and Panama has intensively courted South Korea (the Republic of Korea) since 2009 as part of President Ricardo Martinelli’s aggressive policy of opening Panama to global business.

The Asian nation has responded by increasing political, economic and cultural commitments. In 2011, it invested $76.4 million in Panama and increased investments to $105.6 million in 2012.

More than 17 South Korean multinationals already operate in Panama — including Samsung, LG, the Korea Exchange Bank, Kia Motors, Hyundai, Daewoo and Hankook — using Panama and its free trade zone in Colón as a hub for their regional activity.

Hyundai leads car sales in the Panamanian market.

Korean imports between 2002 and 2012 grew from $63.5 million to more than $356 million as Panamanian exports to Korea expanded from just $49,920 to nearly $25 million, according to the Panama Ministry of Commerce and Trade.

Panama’s main exports to South Korea include scrap metal, shrimp and roasted coffee, and it is pushing to diversify into other exports such as beef. Panama imports automobiles, construction-grade iron and steel, bus and truck tires, heavy machinery and the valves that will regulate the chambers of the expanded Panama Canal.

A South Korean consortium led by state-run Korea Resources Corp. also has a 20 percent stake in a 30-year concession to exploit the $6.2 billion Cobre Panama project, one of the world’s largest undeveloped copper mines, located 75 miles west of Panama City.

Panama, one of the few nations to maintain a two-China policy, has a one Korea policy.

“Panama is a traditional political ally of Korea,” Cho said. “With respect to the matters of the Korean Peninsula, Panama has supported the position of South Korea, and both nations showed close cooperation during the third nuclear test last February,” he added, referring to North Korea’s underground nuclear test — the largest to date.

In 2010, South Korea and Panama celebrated 50 years of mutual prosperity and peace with the visit of former South Korean President Lee Myung-bak, the first meeting of heads of state from both nations since diplomatic relations were established in 1962.

President Martinelli visited Seoul just a few months later. As a goodwill gesture, South Korea will donate a 34-foot replica of the Dabotap Pagoda, a national treasure, in celebration of the 500th anniversary of the discovery of the South Sea, which indirectly led to the founding of Panama City.

Much like Seoul, Panama has been sprinting toward a makeover that has transformed the face of the capital city and the country’s economy in less than a decade.

The economy continues to grow steadily after doubling from 2003 to 2009. Buoyed by booming transportation and logistics services sectors along with heavy infrastructure development, current Panamanian projects include extensive road works, a subway system and, of course, an expanded Panama Canal, which is expected to be delivered by mid-2015.

According to Aram Cisneros, the Panamanian ambassador in Seoul, the shipping industry is at the core of the relationship between the two countries. South Korea is variously cited as the fifth- or sixth-largest user of the Panama Canal and owns about 11 percent of the 9,000 Panamanian-flagged ships in the world.

Canal Administrator Jorge Quijano visited South Korea earlier this year to meet with potential investors in terminals along the expanded waterway, which will include a new set of locks to accommodate wider, longer and heavier ships.

Part of the renewed commitment between the two nations is a technology exchange that has led to an eGovernment portal and a $700,000 information and technology center for Panama. Located in the capital’s City of Knowledge and overseen by the Korean Information Society, the state-of-the-art facility is part of a Memorandum of Understanding signed with the South Korean Ministry of Public Administration and Security.

The Korean government sponsors a knowledge-sharing program, which promotes exchanges in areas such as education, agriculture, logistics, public services and the labor market as Panama seeks to mimic South Korea’s economic success and become more than just a path between two seas.

“In spite of the obvious historical and cultural differences, Panama has a lot to learn from Korea,” Cisneros said, noting that South Korean per capita GDP has risen from $85 per person 60 years ago to $30,000 today.

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