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Korean Miracle in Hungary

Interview with Korean Ambassador Kyoo Sik Choe

D&T
September 28, 2020

Last year, the Republic of Korea overtook Germany as the top source country of foreign direct investments in Hungary. The Korean Ambassador Kyoo Sik Choe explains to Diplomacy&Trade the reasons behind this development. He also talks about the handling of the COVID-19 pandemic in his country and how much he appreciates the sympathy of Hungarians for the Korean victims of a boat accident in Budapest last year.

In 1989, Hungary was the first Eastern European country to establish diplomatic relations with the Republic of Korea and therefore, the two countries celebrated the 30th anniversary last year. According to Ambassador Choe, bilateral relations have developed significantly in the political, economic, cultural and consular fields over these three decades. “In the field of economic cooperation, the greatest development is that in 2019, the Republic of Korea overtook Germany as the top source country of foreign direct investments in Hungary. Minister Szijjártó mentioned this as a ‘miracle’ in bilateral relations. Another indication of the fast growth in economic ties is the fact when you interviewed me for the previous Korea Focus in Diplomacy&Trade two years ago, I mentioned that the volume of bilateral trade in 2017 was USD 1.9 billion (according to Korean statistics), while now, I can proudly say that this figure for 2019 was already USD three billion! While in 2017, there were 90 Korean companies in Hungary, their number in 2020 is 190. I would also like to emphasize the importance of launching a direct flight between the Republic of Korea and Hungary in 2019. This is really good news for both countries!”

The number of Korean nationals in Hungary also increased. In early 2018, there were 1,200 of them but now, there are 3,700 Koreans here. This welcome growth is not only due to the higher number of Korean employees resulting from the increase in investments but also, there are more and more Korean students in Hungary, the Ambassador adds.

Attracting features
When talking about the circumstances that led to Republic of Korea becoming the largest source country for foreign investment in Hungary, the Ambassador highlights that “perhaps, the most important of these factors is the geographical location of the country. Hungary not only borders on seven countries but it is also situated along the roads connecting Western Europe with the countries of the Western Balkans and with the Commonwealth of Independent States (CIS) formed after the dissolution of the Soviet Union. As examples, let me mention Celltrion Healthcare Hungary Kft., which has its headquarters in Hungary responsible for its operations in 16 countries, including those of the CIS and the markets of East Central Europe while the LG Electronics office in Budapest supervises the company’s activities in ten countries of the Western Balkans and East Central Europe.”
Another factor is the investment incentives policy of the Hungarian government. The rate of corporate tax is low, there is a wide range of business incentive programs and some important companies are given VIP status, which allows them to process administrative issues much more simply. “This business-friendly policy can many times be a decisive factor when finalizing an investment project. All this makes it possible for Korean companies to operate in a safe and stable manner in Hungary,” he points out.

Coping with COVID-19 in business
The pandemic situation has caused a lot of problems globally. Ambassador Choe points out that when travel restrictions were introduced in Hungary, Korean companies were given exceptional treatment. As a result, many Korean companies were able to minimize negative effects of the travel restrictions. Later, the Republic of Korea was listed as a ‘green’ country. “After Hungary lifted travel restrictions for those from the countries of the Schengen zone at the end of June, the Republic of Korea was the first outside this group of countries that was granted similar treatment. The reason must have been that the Hungarian government appreciated the Korean efforts introduced to combat the COVID-19 epidemic, while the importance of Korean investments was also a major factor in this decision,” according to the Ambassador.

Korean corporate presence in Hungary
Basically, all globally important Korean companies are present on the Hungarian market: Samsung Electronics, Samsung SDI, Hankook Tire, SK Innovation, KDB Bank, LG Electronics, Lotte, Doosan and others. Ambassador Choe says that “of course, it is not only them who are here but also a wide circle of Korean suppliers that they cooperate with. Last year, Korean companies accounted for 48% of all foreign direct investments in Hungary, which demonstrates the weight of Korean firms among foreign investors well. This was also appreciated by the Hungarian side that gave Samsung SDI the title of the largest foreign investor of 2019. At the same time, the company creating the most jobs in Hungary was given to SK Innovation.”
He adds that “currently, we are facing a turning point as car manufacturing is being shifted from the production of traditional cars to electric vehicles. Many Korean companies using this new technology have come to Hungary, which means – with the global automotive supply chain already available in this country – that these new electric vehicles investments will help the Hungarian economy in its transformation to the use and further improvement of new technologies. This can easily make Hungary one of the global centers of electric vehicle production.”

Aftermath of a boat tragedy
The sinking into the River Danube in the summer of 2019 of the Hableány tourist boat took the life of 25 Koreans in Budapest. The Korean Embassy works together with the Ministry of Foreign Affairs and Trade and the Budapest Municipality to cherish the memory of the victims of this very unfortunate incident. “As a result of trilateral dialog among these parties, a memorial will be set up to honor the victims. The venue of the memorial has been designated: it will be at the Pest side bridgehead of Margaret Bridge. There is already a temporary place of commemoration there with a lot of candles as a sign of solidarity with the victims. The necessary permissions are being arranged and if all goes well, the memorial will be inaugurated later this year, I hope,” Ambassador Choe says.
He mentions that the court hearing in the case of the boat tragedy, first postponed due to the COVID-19 situation, has now resumed. Accused is the Ukrainian captain of the ship that collided with the Hableány. The second hearing has taken place this September. “We trust the Hungarian courts and that these court trials will shed light on the circumstances, those responsible will be made accountable, and, based on the final sentence, the families of the victims will receive just compensation. We hope that the final verdict will heal the wounds of the families of the victims and the victims will finally be able to rest in peace.”
Unfortunately, one of the victims has still not been found. In order to help the search, in January this year, the Korean Embassy in Budapest – on behalf of the victims’ families –published a call in the Hungarian daily newspaper Népszava that those who provide any related information will receive a reward.

The three T strategy
As in many countries of the world, Hungarian authorities have also taken various measures to combat the COVID-19 pandemic. The number of those infected with the new coronavirus, and that of epidemic-related deaths, is relatively low, compared to many other European countries. As far as the Republic of Korea is concerned, the World Health Organization has spoken about the handling of the situation with words of appreciation.
“Since the start of the epidemic, the Korean government has been pursuing a policy characterized by three Ts: Testing, Tracing and Treatment. It means a lot of testing, a thorough search for contact persons and treatment until full recovery. People’s movement and economic activities have not really been restricted, just minimally when absolutely necessary. It was at the end of February that the most cases were registered in the Republic of Korea but even then, no cities or borders were closed – the epidemic was treated quite successfully, the Ambassador highlights.
Nowadays, the pandemic is spreading again at an increasing rate in Seoul and the surrounding counties, but now, Korean authorities have the experience to introduce preventive measures and act proactively to fight the disease. The figures are still favorable in international comparison: the death rate is around 1%.

Cultural ties
On the cultural front, Ambassador Choe is happy to report that last December, the Korean Cultural Center – the biggest one in Europe and the second largest in the world after the one in Japan – was re-opened in Budapest. The same month, a Hungarian cultural center opened in Seoul. “It does not only mean that the Center in the Hungarian capital is large but the interest shown by the Hungarian public in it is also significant – as is the rate of participation by Hungarians in the programs organized by the Center. In Europe, there are 444 Korean culture clubs, and out of these, you can find 131 in Hungary. Since 2007, we have organized the Korean Film Festival (KFF) in Budapest every year and this September, we have the 13th edition of this event. It was at the Korean Film Festival last year where the Hungarian audience could watch the movie ‘Parasite’ that went on to claim four Academy Awards at this year’s Oscars gala.”
As a final thought, the Ambassador remarks that “We are very grateful both to the Hungarian government that announced the creation of a memorial of the sightseeing boat tragedy and also to those Hungarians who helped in the rescue operation and have sent so many hand-written letters of condolence. We very much appreciate this show of solidarity of the Hungarian people. I am sure this will further contribute to the improvement of relations between Koreans and Hungarians in the upcoming 30 years.”

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