Viktoria G. Samsonova
Ph.D. (Economics), Leading researcher, Head of the Center for Korean Studies, Institute of China and Contemporary Asia of the Russian Academy of Sciences (address: 32, Nakhimovsky pr., Moscow, 117977). ORCID: 0000–0002–9577–6463. Email: samsonova@iccaras.ru.
«Russia and the Republic of Korea:
ways to rehabilitation of economic partnership»
As active players in the global economic system, both Russia and the Republic of Korea cannot but react to the processes taking place in it. Unfortunately, just as the world economy began to recover from the COVID-19 pandemic, found itself in the grip of aggravated economic contradictions between the leading centers of the world economy, which led to trade conflicts, parallel disorganization of the world commodity markets as a result of the Ukrainian crisis, as well as disruption in the world production and trade chains only aggravate the situation. Consequently, the coming years can be characterized by significant uncertainty for the global economy. The IMF experts has lowered its global economic growth forecast for the next two years: in 2025, global GDP is now projected to increase by only 2.8%, down from the previously expected 3.3%. In 2026, growth is anticipated to be around 3%, whereas the IMF experts initially estimated 3.3%.
Against the background of a deteriorating economic forecast for almost the entire world, the IMF improved its assessment for the Russian Federation. The organization now expects Russia’s GDP to grow by 1.5% in 2025, compared to its earlier projection of 1.4%. Also, according to the World Bank, in 2024, the Russian economy was the fourth-largest in the world, based on purchasing power parity.
IMF experts acknowledge that emerging markets and developing countries are the key drivers of growth, with projected expansion rates of 3.7% and 3.9% in 2025 and 2026, respectively. The centers of economic power are shifting towards rapidly developing entities like BRICS. The potential of BRICS countries offers members, including Russia, the opportunity to become leaders in the economy of the future. At the beginning of the century, the BRICS countries accounted for less than 25% of global GDP, but this share has now risen to a third, and is expected to approach 50% soon, considering the addition of new member states.
At the same time, former economic leaders who are losing influence resort to coercive ways to maintain their dominance. In particular, the rapid escalation of trade tensions following the introduction of new tariff measures by the US will significantly impact global economic activity. This growing protectionism will likely trigger retaliatory measures from trading partners and the creation of new barriers. In response, we believe there will be increasing diversification of trade relationships, partly to compensate for the deficit of trust amonglong-standing trading partners. The rapidly changing rules of the game are forcing major trade players to act unconventionally when the globalization ceiling is reached. In particular, while in 2022-2024 there was a strengthening trend towards the practice of relocating business operations or services to a nearby country rather than a distant one (nearshoring) and the construction of supply chain networks with allies and friendly countries (friendshoring), these patterns are now changing. Due to a crisis of trust, businesses no longer limit trade solely to geopolitical partners or nearby regions. Instead of consolidating supply chains, companies are now diversifying trade networks across different regions, reducing risks but complicating logistics.
And if the first characteristic for the economy in the near term isuncertainty, the second is diversification (in circumstances of a crisis of trust). Such diversification ones again emphasizes that business does not want to be constrained by the «geopolitical component» and is ready to work where impressive financial results can be achieved, and the Russian market is one of the most promising in this regard.
Almost all countries in the world, both Russia and the Republic of Korea, are deeply integrated into world trade, respond to the processes taking place within it, and are interested in further strengthening their positions on the economic stage. In this situation, both countries can be useful to each other, based on the goals of economic benefit, and 2025, the year when we will celebrate the anniversary - 35 years of the establishment of our diplomatic relations - we hope it will be a period of rehabilitation of trade and economic partnership and its intensification.
The latest data showed that the Republic of Korea ranked 6th in the list of key trading partners of the Russian Federation after China, India, Turkey, Belarus and Kazakhstan. According to South Korean statistics, trade turnover between our countries in 2024 amounted to $11.39 billion, but this figure is higher, since it does not take into account the volume of trade under the parallel import scheme, which the business continues to use, importing their products through third countries (including Kazakhstan, the Republic of Uzbekistan, etc.) to Russia.
At the same time, the volume of bilateral trade turnover in the period from 2015 to 2024 remains quite modest, and this is not due, in our opinion, to economic reasons. Although the Republic of Korea did not officially join the anti-Russian sanctions in 2014, it began to reduce its economic interaction with our country, which was reflected, among other things, in a drop in trade turnover: in 2015, there was a 34 % decrease compared to 2014. A further significant drop in trade turnover occurred after the Republic of Korea joinedfinancial sanctions against Russia and imposed export control list for Russia, Belarus in 2022.
Regarding sanctions, a characteristic feature of the global economy at the moment is the excessive use of this instrument of pressure by some countries. At present, Russia is the leader in the number of sanctions imposed against it (23872 according to the Castellum website of January 19, 2025[5]), aimed at blocking financial transactions, disrupting logistics and production chains, severing already established trade and investment ties with external partners, and intimidating our economic partners.
However, while pursuing the goals of, among other things, forcing the target country to change its political course, undermining the economic and military potential of the target country, etc., there is an increasing reverse effect:
1. Sanctions begin to cause damage to the initiating countries.
2. Sanctions have shown the surprising resilience of the most persistent (from the point of view of the initiators from among the developed countries) violators of international setup[6].
3. Sanctions provide an additional impetus for the activation of national production, the expansion of import substitution measures, and the transition to domestic rather than borrowed technologies, which contributes to the further strengthening of the country's technological sovereignty.
4. Sanctions are changing the global financial order, forcing the target country to seek alternative payment methods. And despite the fact that 80% of world trade is still conducted in dollars[7], the world is gradually trying to move away from its hegemony. In particular, in 2024, the share of settlements in national currencies in Russia's trade with key partners already reached about 90%[8].
5. Like plants that grow through stones, business (despite the fear of secondary sanctions) breaks through the sanctions obstacles, and in parallel, the main actors are changing. In particular, instead of South Korean business giants, more mobile representatives of Small and Medium-sized Enterprises (SMEs), which are not subject to political factors, have become active in the Russian market.
6. The withdrawal of European companies from the Russian market has created opportunities for new players to compete for one of the largest markets —Russia, with a population exceeding 146 million people[9]. Companies from the Republic of Korea are trying to fill the niches which were left vacant by European firms, particularly in areas such as the supply of cosmetics, textiles, and food products, where such South Korean goods are in high demand among Russian consumers. While focus was mainly on raw materials in the past, nowadays other categories of goods, including other promising goods such as agro-industrial products, entertainment content, are now actively being incorporated into trade turnover.
Nowadaysthe two countries have much to offer one another for a mutually beneficial partnership. In particular, Russia has unique fundamental technologies and innovative developments. Also, it is a global leader in nuclear power plant construction[10] and is a leading space power. In particular, thanks to cooperation with Russia, the first South Korean citizen flew into space in 2008, and the Naro Space Center was built. Regarding Russia’s resource base: it holds the world's largest natural gas reserves and ranks first in the production and export of nuclear fuel. Russia also ranks first in the world in terms of forest area, second in terms of freshwater reserves (4,500 cubic kilometers), third in both the total area of cultivated land and arable land. Russia is also among the top ten countries by oil reserves. Most importantly, it has a significant pool of innovative personnel: Russia ranks fifth in the world by the number of scientific personnel (670000 people)[12]. In 2023, Russian position in terms of spending on science ($61.8 billion, adjusted for purchasing power parity) rose to 9th place, and according to WIPO, Moscow ranked 31st in the top 100 global innovation clusters as of 2024[13].
In our opinion, it is essential to expand investment partnership between our countries. However, at the end of 2021, the volume of total accumulated foreign direct investment from the Republic of Korea in the Russian economy was small and amounted to $3.699 billion. The difficult geopolitical situation and sanctions pressure have caused that the inflow of investment from the Republic of Korea to Russia has almost stopped since 2022.
At the same time, maintaining positive economic relations and continuing the implementation of investment projects would allow the Republic of Korea to secure stable supplies of Russian food products, as well as strategically important raw materials and minerals, expand the presence of South Korean businesses throughout Russia, and foster close cooperation in scientific, pharmaceutical, nuclear, and other fields, all of which would be mutually beneficial.
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