[The Editors' Verdict] UAE President Focuses on HYBE and NCSOFT

The 1-night, 2-day state visit of Mohammed bin Zayed Al Nahyan, President of the United Arab Emirates (UAE), was a significant topic not only in political circles but also in the business community. Even setting aside the achievement of signing the Comprehensive Economic Partnership Agreement (CEPA) with President Yoon Suk-yeol?the first such agreement with an Arab country?the rare scene of top business leaders gathering for a meeting with the UAE president drew considerable attention.

On the 28th, President Mohammed held a meeting with business figures including Samsung Electronics Chairman Lee Jae-yong, SK Chairman Chey Tae-won, and Hyundai Motor Group Chairman Chung Eui-sun. However, what attracted even more attention was the separate meetings held afterward with Bang Si-hyuk, Chairman of HYBE; Kim Taek-jin, CEO of NCSOFT; Cho Man-ho, CEO of Musinsa; and Song Chi-hyung, Chairman of Dunamu. This expanded the connection with our business sector, signaling that the UAE is paying attention not only to our manufacturing industry but also to our soft power.

South Korea established diplomatic relations with the UAE in 1980. At a time when Middle Eastern diplomacy was weak, establishing ties with the oil-rich UAE was essential. At that time, the UAE’s oil reserves were estimated at 30 billion barrels. More importantly, establishing diplomatic relations with the UAE was special because it strengthened South Korea’s position by surpassing North Korea, which was competing for influence in the Middle East. The UAE became the 13th Middle Eastern country with which South Korea established diplomatic relations, surpassing the 12 countries that had diplomatic ties with North Korea for the first time.

The relationship with the UAE has since become special. In 2009, the Barakah nuclear power plant project was awarded to South Korea, marking the first export case of Korean-style nuclear power plants. According to the Bank of Korea, trade volume between the two countries has also increased significantly. South Korea’s exports to the UAE, which were only $120 million at the time of establishing diplomatic relations, reached $4.4 billion last year. After the nuclear power plant export, annual export amounts even exceeded $7 billion.

Although unfamiliar to us, Korean nuclear power, defense, and other heavy industries are popular in the UAE, as is K-content. According to the “Overseas Content Market Analysis Report” released last year by the Korea Creative Content Agency, Naver Webtoon has become one of the four major online platforms in the UAE, and last year, three Korean dramas ranked among the top 10 on Netflix. In 2022, the content market size in the UAE was $9.27 billion, growing 11.2% compared to the previous year. Consulting firm PwC forecasts that the market size will exceed $12.8 billion by 2027.

The UAE’s influence in the semiconductor industry is also significant. The UAE is a semiconductor exporting country. According to UN statistics, its export volume was $350 million in 2022. Although this is only one-hundredth of South Korea’s semiconductor exports of $35 billion in the first quarter of this year, the UAE’s semiconductor exports are increasing annually. Notably, the owner of GlobalFoundries, the world’s fifth-largest foundry company, is Mubadala Investment Company, the UAE’s sovereign wealth fund. GlobalFoundries also attracted attention as the first company to receive government subsidies under the U.S. CHIPS Act.

The significance of this meeting with top business leaders lies in the fact that it can be seen as a signal that economic cooperation between South Korea and the UAE is entering a new phase. The UAE has shown sincere interest in our soft power to the extent of directly contacting companies such as HYBE, Dunamu, and NCSOFT. Since the establishment of diplomatic relations, the UAE has been expected to serve as a foothold for South Korea’s entry into the Middle East. The Middle East includes populous countries such as Egypt and Iraq, with populations of over 100 million. The UAE president’s visit to Korea has opened another opportunity for our companies’ business in the Middle East.