Daewoo's African Dream
Korea Times | 02-17-2009
By Oh Young-jin
Assistant Managing Editor
"We can't eat semiconductors or auto parts.''
When Richard Shin of Daewoo Logistics told me this during an interview last week, it hit me hard. Shin is the manager of the Korean firm's $6 billion project to carve a 1.3 million hectare farm out of Madagascar, a formal French colony. Daewoo is under fire for allegedly attempting to colonize the African island state.
The size of the land at stake is about that of Belgium or South Gyeongsang Province. If the plan is implemented, the area will turn into fields of corn and maize. The project comes with promises from Daewoo to give jobs to tens of thousands of Malagasies and build modern hospitals and other public infrastructure.
For people from nations that have practiced colonialism or who study total exploitation, Daewoo's project may sound familiar, considering state and corporations ``cooperated'' to lead each other in the history of colonial subjugation.
Korea doesn't exactly fit in this category of colonial powers, being a former colony itself and geographically sandwiched by big powers. Being a Korean who lives consciously or subconsciously with this set of limitations, I found the media's accusations of neocolonialism odd when I read about them some three months ago, leading me to last week's interview with Shin.
My conclusion is that whether one calls the Daewoo project an act of neocolonialism or not starts with "Korean psychology,'' an amalgamation of several elements. One such element, as Shin indicated, is food insecurity. Some say Korea's grain self-sufficiency rate is about 50 percent but this figure can be deceiving, considering much of it accounts for rice and virtually all stock feed, which is imported.
A large number of cattle and pig farmers went under during a food crisis last year. With the situation being as it is, Korea is not safe from ``food riots'' that took place in Mexico and Thailand. Besides, it was less than a half century ago that Koreans had to eat unripe barley, porridge made from it or forage for anything in the forest to eat and survive the spring when their staple food, rice, ran out, and nothing else was available.
Korean mountains are another element. Korea is a small country with one of the highest population densities in the world, and 70 percent of its land is mountainous. And some wonder why Koreans appreciate the vast flatlands in Texas or undulating green pasture in Australia so much.
Daewoo's Madagascar project started with a similar set of psychological elements.
By the way this project is ongoing, however, this uniquely Korean dream may end up being the least bit Korean.
"Few Korean companies are paying attention to our project,'' Shin, of Daewoo Logistics, said. "Whenever they find any fallow land, they want to build apartments.''
In contrast, foreign companies are more positive about investing in the project. According to Daewoo Logistics, they include agricultural multinational firm Syngenta, farm tractor company John Deere, plantation company Land Kom and Caterpillar Inc., an industrial equipment manufacturer. Selected CEOs of the groups are scheduled to visit Korea for consultations with Daewoo. Nongyup Feed and a Samyang affiliate are the only Korean firms firmly set to participate.
Daewoo still has to overcome many barriers to get the project going, requiring $30 to $40 million for the first year of the project. With credit having dried up, it won't be an easy task.
Furthermore, a survey revealed that the land yields less than half the international average.
Most importantly, Madagascar is in political turmoil, setting the governing body against the opposition. Their clashes culminated with scores of protestors being killed.
Members of Daewoo are on standby awaiting clearance from the Antananarivo government.
"The atmosphere in our company resembles that of a funeral,'' Shin said, explaining that his CEO is frustrated with the lack of progress. "But we will go on. If not this Madagascar project, we will go for another. It's pure business, not colonialism of any form, old or new.''
A week after the interview, I called Shin for more details. He told me that he was waiting for his ninth trip to the Island of the Moon, sounding more upbeat than during our meeting. Maybe it was not Shin but I that had since changed. I feel more convinced than before that Korea needs Daewoo's success in Madagascar, not only to prove that its model is different from the models of Britain, the United States, the Netherlands, France, Germany and Japan during their colonial pasts, but also that it is setting a new precedent for both African states and outside investors to benefit from.
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