IT has been just over a year since Lee Chi-beom took up his posting as South Korea’s Ambassador to Malaysia.
Despite the slowdown in activities caused by the Covid-19 pandemic, the envoy has been trying to break new ground especially with both countries marking their 60th anniversary of diplomatic relations this year.
The 66-year-old former environment minister (2006-2007) is well aware of the heavy responsibilities on his shoulders here.
Lee says he wants to say a special “thank you” to the people and government of Malaysia at this time.
“With their help, South Koreans are safe and healthy in Malaysia. A few who had been infected with Covid-19 have recovered and returned to their normal routines, ” he added.
Lee says there was a lot of things in his “to do” list with Malaysia. “Because of Covid-19, I could not fulfil many of my planned activities, ” he said, adding that he had only managed to visit Johor to date.
As his country battles a third wave of Covid-19 infections, Lee speaks to StarBiz on a wide range of issues, including cooperation in the all-important effort to save people from the deadly virus.
Q: In 2019, President Moon Jae-in stated that South Korea would elevate its bilateral relations with Malaysia to that of a Strategic Partnership. What is being done on this front?
A: The South Korean side is of the opinion that the elevation of its bilateral relations with Malaysia is crucial for the establishment of a deeper and more diverse cooperative partnership. Malaysia is a core partner of South Korea’s new southern policy. The two countries should be alert on the intensifying conflict among powers, especially between the US and China. The year 2020 marked the 60th anniversary of diplomatic ties between our countries.
Notwithstanding the Covid-19 situation, South Korea and Malaysia continue their cooperation in many fields. Our officials have been having meetings in Seoul and Kuala Lumpur despite Covid-19. This situation is much better than in other countries, where contacts are possible only through telephone and virtual meetings.
Q: The president presented the New Southern Policy Plus at the Asean-ROK Summit. What are the implications for Malaysia and the Look East Policy 2.0?
A: The Asean-South Korea and South Korea-Malaysia relations have developed significantly since the proclamation of the New Southern Policy in November 2017. Asean has become the number one overseas travel destination for South Koreans with more than 10 million visiting the region in 2019. Asean is also South Korea’s second-largest trading partner, next only to China.
Likewise, people-to-people exchanges between South Korea and Malaysia have grown to over one million visitors in 2019. Malaysia is now one of the most popular tourist destinations for South Koreans travelling overseas. Bilateral trade between our two countries have also increased close to US$20bil in 2019, placing Malaysia as the 10th largest trading partner for South Korea. Compared to the figure in 1965, our bilateral trade volume has multiplied more than six thousand times.
Q: South Korea was one of the first countries to contract Covid-19. Your successful approach, in terms of your aggressive testing and high-tech contact tracing, has been a model for the world. Can you tell us more about this?
A: The most important factor in South Korea’s successful response to the unprecedented Covid-19 crisis was the mature citizenship and resilience displayed by our people, as well as the strong cooperation between the government and private institutions. Embracing the three main principles of openness, transparency, and democracy, the South Korean government actively communicated with citizens so as to encourage their voluntary participation.
As a result, we have successfully contained the spread of Covid-19 without a lockdown or closing the border, while still maintaining our daily lives as much as possible.
In addition to rapid and aggressive testing, and high-tech contact tracing, also treatment by our dedicated world-class medical team with support from advanced healthcare and medical system have all contributed to South Korea’s successful response to the pandemic. This 3Ts strategy has now become the global standard in combating the pandemic.
Q: You are currently battling a tenacious new wave of infections centred in Seoul in what is your country’s worst flare-up since February. What is the latest situation?
A: It is the most critical situation since the pandemic with a record-high number of more than 1,000 new cases daily. In response, the President chaired an emergency response meeting himself and called for all-out effort to curb the spread of infections. The government is carefully monitoring the situation to decide whether to raise the social distancing alert to the highest level, which is Level 3 of the five-tier system (levels 1,1.5,2, 2.5 and 3).
Fortunately, the South Korean medical system can still maintain the 3T strategy of testing, tracing, and treatment – with currently available resources, but not for long if the spike in number of cases continues. Therefore, the government and the private institutions are working together, making utmost use of our virus control capabilities, to flatten the curve as soon as possible.
Q: What efforts did your government undertake to protect the national economy?
A: There have been various countermeasures to support affected businesses and individuals, as well as protecting people’s livelihoods and addressing job security issues. Immediately after the outbreak, the government established a President-chaired Emergency Economic Council Meeting to take pre-emptive measures and launched a 31 trillion won (US$284bil) stimulus package to support the economy. The South Korean government organised four extra budgets in 2020. In addition, Emergency Economic Central Counter measures was activated to examine the economic situation and risk factors.
The Korean New Deal has three main pillars including the Digital New Deal, Green New Deal, and strengthening employment and the social safety nets. While the Digital New Deal aims to push South Korea’s transition to digitalisation, the Green New Deal aspires to transform South Korea into a low-carbon economy.
Q: How do you evaluate the situation in Malaysia and the government’s response to the pandemic?
A: The Malaysian government enforced the strict movement control order for two months at an early stage of the outbreak since March 18. As a result, the number of new infected cases in a day was well controlled with around 10 cases until early September. Malaysia seems to be going through the third wave of the pandemic like South Korea. But taking all things into consideration, I am of the view that Malaysia is managing things very effectively and systematically to avert the spread of the pandemic.
The Malaysian government has also made a purchasing contract for vaccines with Pfizer on Nov 24 to achieve the target of vaccinating more than 60% of its population. Economy-wise, it is true that Malaysia’s economy is facing challenging times just as other nations are facing deep downturns due to the prolonged Covid-19 pandemic. Nevertheless, I think that Malaysia has done comparatively well in responding to the crisis and has taken relief and stimulus measures to protect the well-being of Malaysians.
Q: Can you tell us about the cooperation between South Korea and Malaysia on Covid-19?
A: Faced with unprecedented challenges, both the South Korean and Malaysian governments have been working closely. Many companies of both countries are keeping active Covid-19 related cooperation. On the request of the Malaysian government, South Korean sides shared its experience and solution for 27 inquiries regarding public health and 19 inquiries regarding economic policy to overcome Covid-19 crisis. The South Korea Chamber of Commerce Malaysia (Kocham) made a donation of test kits to Malaysia’s Health Ministry, Coway donated 100,000 face masks to Malaysian police, Cuckoo donated air and water purifiers to the local quarantine facilities, and Lotte Chemical donated one million swab kits and raw material that can produce 100,000 pieces of face shield.
Besides this, South Korean company Osang Healthcare is making an effort to donate 20,000 test kits to Malaysia’s Health Ministry. Korea Housing Finance Corp also delivered 3,000 pieces of KF94 masks to Malaysia’s Cagamas Bhd recently.
AirAsia donated 10,000 facemasks and 40,000 gloves to Daegu city that has many cases of Covid-19 infections in the early stage and also provided assistance for South Korean passengers from third countries to come back to South Korea via Malaysia.
In April, at the Asean Plus Three Special Summit on Covid-19, President Moon pledged to provide medical assistance to Asean countries. To implement the pledge, the South Korean government has launched a project titled “Enhancing the Detection Capacity for Covid-19 in Asean Countries.” The project provides each of the 10 Asean countries with medical supplies and equipment worth a total US$500,000 from the Asean-ROK Cooperation Fund (AKCF).
We delivered 23,000 Covid-19 test and swab kits each to Malaysia’s Health Ministry last month. More deliveries of PCR and Personal Protective Equipment (PPE) will soon be on its way.
South Korea will further enhance cooperation with Malaysia through the one of the seven key initiatives of the recently announced New Southern Policy Plus, “Comprehensive Cooperation on Health Care Initiative”.
Prime Minister Tan Sri Muhyiddin Yassin pointed out at the Asean-ROK Summit that Malaysia itself has benefitted from South Korea’s assistance in increasing its Covid-19 testing capacity (from 16,500 tests a day to 22,000 tests). As such, Malaysia and South Korea are working together even in coping with Covid-19 and expanding the horizon of cooperation in new areas.
Q: Seoul is one of the top destinations in the world. Is there a possibility of a travel bubble implemented between our countries?
A: First of all, Kuala Lumpur is also one of the top destinations for world travellers and Kuala Lumpur has received more overseas visitors than Seoul. Despite the Covid-19 situation, our government has been making efforts to guarantee Malaysian businessmen’s activities in South Korea. If they can meet some requirements, Malaysian businessmen can enter South Korea and conduct their activities with quarantine exemption.
Our embassy is also continuously asking Malaysia government to implement a travel bubble or rapid entry process for officials and businessmen. When the Malaysian side is ready, a travel bubble can be implemented immediately. Under the Covid-19 situation, the South Korean government is already implementing rapid entry process for officials and businessmen with China, Japan, Indonesia, Singapore and Vietnam. We hope to implement a similar process with Malaysia soon.
Q: How can South Korea contribute to Malaysia’s artificial intelligence (AI) and 5G deployment?
A: In November last year, South Korea’s Ministry of Science and ICT and Malaysia’s Communications and Multimedia Ministry signed an MoU to forge bilateral cooperation in the area of information and communication technology (ICT). Based on the MoU, both countries are working together to further enhance cooperation for high-tech exchange, sharing of knowledge and expertise especially in the field of ICT.
The South Korean government will inject 1 billion won for the ICT cooperation project starting this year over the next three years to carry out consulting research in the ICT sector. This year, in collaboration with MDEC, South Korea is conducting joint research on AI-based smart farming. For the second and third year of collaboration, both sides will select a field in AI and 5G sectors to further bilateral technical cooperation via expert exchanges, seminars and site visits.
If South Korea’s high-tech industries and new digital technology can be matched with Malaysia’s developed infrastructure and high-skilled manpower, we will be able to raise the synergy effects between our two countries.
Moving forward, both our governments will explore specific cooperation programmes related to high-tech industry and new digital technology via cooperation channels like Korea-Malaysia Economic Cooperation Committee, Korea-Malaysia Business Forum and so on to strengthen our bilateral cooperation in the era of the 4th industrial revolution.
Q: Is Malaysia still the preferred choice of South Korean enterprises?
A: Malaysia is expected to remain as an attractive investment destination for South Korean companies because of its high purchasing power, excellent trade and investment environment, and your government’s continuous efforts to develop new industries.
Firstly, the International Monetary Fund has projected Malaysia’s real GDP to grow at a rate of 7.8% next year, the highest among Asean countries. In 2019, Malaysia was the only Asean country – except the city-state – which recorded GDP per capita exceeding US$10,000, backed by its stable economic growth and high purchasing power.
Secondly, the World Bank Doing Business 2020 Report has ranked Malaysia in 12th position among 190 economies worldwide, and according to Fitch Solutions’ Trade and Investment Risk Report, Malaysia has scored 74.2 in trade and investment stability index from 2016 to 2020, which is higher than Thailand, Indonesia, the Philippines and Vietnam.
The Malaysian government is striving to strengthen the position of smart manufacturing, electric vehicle, ICT and medical industry by promoting Industry 4.0 and increasing the competitiveness of core sectors like manufacturing, service, trade, technology and productivity. With such efforts, Malaysia is increasingly being considered as a viable relocation destination for global companies affected by the headwinds.
It is also noteworthy that a survey of 320 global companies conducted by J.P. Morgan in July revealed that companies chose South-East Asia as the destination for supply chain relocation. Among the respondents who chose South-East Asia, 20% of them responded that they would consider relocating to Malaysia.
Q: How are the other big South Korean companies performing in Malaysia, such as Samsung, Kia, Lotte Chemical Titan and CJ Bio?
A: The pandemic outbreak has given both positive and negative impact on South Korean companies operating in Malaysia, depending on the types of business. Samsung Electronics is investing US$25mil annually for facilities upgrade and maintenance and as for Samsung SDI, apart from their main small-size battery business, it is too early to tell whether it will make additional investment on large-size battery or core parts business.
Kia’s performance was not so good in 2020 due to the Malaysian government’s tax incentive measures for local brand and locally manufactured vehicles. However, Kia considers Malaysia as an important market, hence they are developing a new strategy for 2021 and are planning to expand new vehicle models from 2022 to increase market share and enhance brand image.
Lotte Chemical Titan reported a drop in sales due to the movement control order (MCO) and forced shutdown of clients in non-essential business sectors early this year. However, as the market started to recover since May due to the increase in demand for disposable products as Covid-19 preventive measures, the company’s performance improved to a level higher than 2019.
As for CJ Bio, since feed additives is classified as an essential product, the impact due to Covid-19 was not so serious. However, tight entry restrictions is causing delay in technical experts’ entry into Malaysia and resulting in subsequent delay of production schedules, and this may affect the company’s sales and profit.
Q: Should K-beauty and K-fashion manufacturers grow their business in Malaysia? What is your view?
A: K-beauty and K-fashion manufacturers should take advantage of the recent Korean Wave and expand their business presence in Malaysia by tapping into Malaysia’s strengths as a halal market and South-East Asia’s premium market. In this regard, it is an encouraging fact that more companies have started to recognise Malaysia as a test bed to reach out to the South-East Asian and Middle-East markets. A 4-level South Korean retail zone known as District K will be located at 1Utama shopping centre, housing 26 South Korean brands on F&B, beauty, accessories, entertainment, etc. In the era of Covid-19, it is necessary for K-beauty and K-fashion companies to respond promptly to Malaysia’s changing distribution market and consumer’s preference.
The pandemic has accelerated the shift towards a more digital world and triggered changes in online shopping behaviours. South Korean companies need to develop strategies to respond to such changes and developments. To take cosmetics as an example, nowadays companies are seeing increased sales in skincare rather than make-up products, reasonably priced products with simple packaging rather than excessive packaging. It is becoming increasingly important for companies to set out detailed strategies to address consumer needs and respond to consumer preference changes promptly.
Q: How can South Korea assist Malaysia on the Industrial Revolution 4.0?
A: Malaysia is one of the richest countries in the Asean region with a GDP per capita of almost US$10,000. Unlike other Asean nations which focus on labour-intensive industries, Malaysia puts emphasis on high technology manufacturing industries like electrical and electronics (E&E), chemical, machinery and equipment and so on. Backed by such industrial structure, Malaysia is poised to emerge as a developed nation by becoming more open to international trade.
The Malaysian government wants to drive growth by attracting FDI in the advanced technology and high value-added industries by focusing on technology transfer and manpower capacity building through local companies’ participation in the global supply chain. Looking at such efforts, I believe Malaysia is prepared to join hands with South Korea to respond to the 4th industrial revolution.
If South Korea’s high-tech industries and new digital technology related to 4th industrial revolution can be matched with Malaysia’s developed infrastructure, affordable energy and high-skilled manpower, we will be able to raise the synergy effects between two countries.
Q: Finally, as a former minister of environment, do you have any specific plan with Malaysia, such as in the field of green-tech?
A: The South Korean government announced the Korean New Deal in July 2020 in order to overcome the economic crisis posed by the Covid-19 pandemic and design the new future of South Korea. The Korean New Deal has two main pillars of Digital New Deal and Green New Deal. The Green New Deal is a strategy for transforming the carbon-dependent economy into the green economy that presents the eco-friendly and low-carbon industry.
President Moon recently announced ‘Carbon Neutrality by 2050’, delivering South Korea in cooperation with international community is going carbon neutral by 2050 in response to the global climate challenge. In this regard, South Korea will focus on the Green Mobility such as establishing the foundation of renewable energy, electric and hydrogen-fuelled vehicles and also expand low-carbon green industrial complexes in the years to come.
Based on the knowledge and experience acquired through my participation in the various environment organisations for around 20 years, I will further explore the promising businesses that could be engaged with the climate change and Korean New Deal with Malaysian partners. When I met your Housing and Local Government Minister in July, I talked deeply with her about South Korea’s garbage and waste recycling and disposal policy. And as many Malaysians have been much interested in South Korea’s water quality and sewage management, I will focus my efforts to activate our cooperation in these fields, too.
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