Yoon vows support for Ukraine reconstruction with Poland

Eyes are on possibility of Korean businesses' participation in 'new Marshall Plan'

President Yoon Seok-yeol, who is on an official visit to Poland, shakes hands with Polish President Andrzej Duda at the official welcome ceremony held at the presidential palace in Warsaw on Thursday. (Yonhap)

WARSAW, Poland -- President Yoon Suk Yeol said South Korea will continue to support Ukraine's reconstruction in partnership with Poland, while also expanding strategic cooperation with Warsaw in defense and high-tech sectors including clean energy, next-generation batteries, electric vehicles and information technology.

In a summit with his Polish counterpart Andrzej Duda on Thursday, the two leaders discussed cooperation on a wide range of issues between the two countries, which have seen significant growth in trade exchanges in recent years. Yoon is the first South Korean leader to visit Poland in 14 years. His visit comes after his participation in a three-day NATO summit held in Lithuania as the leader of an observer country.

In a joint statement, Yoon said the two countries have become “indispensable cooperative partners” in many fields, including economy, security and culture, noting that Poland was the first country in central and Eastern Europe to establish a strategic partnership with Korea in 2013.

The two leaders agreed to continue providing necessary support to further expand trade and investment cooperation between the two countries.

Specifically, they agreed to collaborate in supporting Korean companies' participation in Poland's initiatives to build nuclear power plant and high-speed railways connecting the city with a new airport. They also agreed to secure future growth engines, noting the expansion of Korean companies into cutting-edge industries in Poland, including EV batteries and 5G networks.

He added that the two leaders agreed on nuclear power generation as the optimal approach to achieving both energy security and carbon neutrality.

Assessing the prompt delivery of the defense export contract signed between Korea and Poland last year, Yoon mentioned that the two leaders discussed Warsaw's plan to procure additional weapons from Korea. They concurred on making further efforts to ensure that cooperation in the defense industry between the two countries continues in a mutually beneficial manner.

President Yoon Suk Yeol, who is on an official visit to Poland, holds an expanded meeting between Korea and Poland with Polish President Andrzej Duda at the presidential palace in Warsaw on Thursday. (Yonhap)

Korean defense companies racked up exports to Poland last year, with transactions amounting to 17 trillion won ($13 billion). These exports included sophisticated weaponry such as Chunmoo rocket launchers, K2 tanks, K9 self-propelled howitzers and FA-50 fighter aircraft.

At the summit, the leaders signed a memorandum of understanding on the Trade and Investment Promotion Framework. The aim of the framework is to enhance supply chain cooperation; develop joint ventures between companies; facilitate trade by removing trade barriers; and foster exchanges and cooperation among businesspeople, technicians and experts.

Poland ranks as Korea's leading trading partner among central European countries. Major companies including Samsung Electronics, LG Electronics, LG Energy Solutions and Daewoo Engineering and Construction have established a presence in the market. Currently, approximately 350 Korean companies operate in the country. Bilateral trade volume reached a record high of $9 billion in 2022 despite the global economic downturn.

During the summit, Yoon also agreed to support Ukraine for its reconstruction with Poland.

Korea and Poland also inked a memorandum of understanding on development cooperation for Ukraine. The memorandum was signed between Korea's transport minister and Poland's plenipotentiary representative for development cooperation in Ukraine, who oversees and coordinates Poland's support policies for Ukraine.

The main points of the agreement include cooperation on reconstruction and development projects in Ukraine; collaboration on national, urban and infrastructure planning; and fostering exchanges and cooperation between public and private enterprises from both countries. The presidential office clarified that the deal aims to bolster cooperation between the two countries to assist Ukraine's reconstruction and lay the groundwork for encouraging and facilitating exchanges and cooperative activities between public and private companies.

President Yoon Seok-yeol and First Lady Kim Kun-hee, who are on an official visit to Poland, talk with Polish President Andrzej Duda at the official welcome ceremony held at the Warsaw Presidential Palace on Thursday. (Yonhap)

Yoon said he is confident that the memorandum on infrastructure cooperation and reconstruction cooperation signed between the two countries on the day will serve as “a good basis for expanding cooperation” between businesses of the two countries.

Yoon’s pledge to join hands with Poland for Ukraine’s reconstruction also raised the possibility of Korean companies’ participation in the project, which is being dubbed a new Marshall Plan. Being the closest country to Ukraine, Poland is widely expected to serve as a hub for this reconstruction project.

Yoon was accompanied by a delegation of 89 Korean business leaders including LG Group Chairman Koo Kwang-mo, Hanwha Group Vice Chairman Kim Dong-kwan and Daewoo Engineering and Construction Chairman Jung Won-ju.

According to a recent report by the Korea Institute for International Economic Policy, the Ukrainian government has delineated its reconstruction into three stages: wartime economy, the postwar recovery and the new economy. It estimates the total recovery cost to be at least $750 billion. Some projections indicate that the restoration cost could reach $900 billion.

Over 500 businesses from 42 countries and 21 economic sectors with a total market cap of more than $5.2 trillion recently signed the recently launched Ukraine Business Compact, a statement of international business support for Ukraine’s recovery.

By Shin Ji-hye(shinjh@heraldcorp.com)