AKBC e-Newsletter February
Dear AKBC Members,
Welcome to the February edition of the AKBC e-newsletter, where we share the latest developments and updates on the Australia-Korea bilateral relationship.
First we spotlight the defence sector. South Korea is making significant strides in the global defence industry, a sector President Yoon Suk Yeol has branded as "K-Defense." Amidst the vibrant legacy of K-pop and K-drama, South Korea is now leveraging its technological prowess and industrial capacity to carve a niche in the defence sector, with a goal to increase its volume of exports to move from the world's ninth-largest arms exporter to the fourth-largest exporter by 2027. Over the last few years, South Korea’s defence companies have raised their global profiles with the signing of landmark deals, including Hanwha Defence’s success in Australia.
Amid this backdrop, Australia's recently announced decision to expand its naval fleet from 11 to 26 surface combatants by the mid-2040s presents another opportunity for Australia-Korea defence collaboration. Australian Defence Minister Richard Marles announced that Australia will build a fleet of "Tier 2" warships, alongside a smaller number of "Tier 1" combatants, with South Korea listed as a potential country where the first three vessels will be built, showcasing the strength and reliability of Korea's shipbuilding industry. The engagement with South Korea for potential construction aligns with the broader strategic dialogues and defence cooperation between Australia and South Korea, reinforcing the importance of our bilateral relationship in enhancing collective security and defence capabilities.
However, the ambitions of Korea are set against the backdrop of a pressing demographic challenge facing South Korea. The nation's birth rate, already the lowest globally, is expected to decline further, from 0.72 in 2023 to a projected 0.65 by 2025. This demographic trend poses profound implications for economic growth, labour markets and social welfare systems. This demographic trend amplifies the urgency for a bespoke policy response from Korean lawmakers to ensure sustainable development and societal welfare. These trends are important for Australian businesses to understand as they provide a context within which to frame future collaborative ventures and investments between Australia and Korea. Recognising the challenges posed by South Korea's demographic shifts allows Australian businesses to align their offerings with Korea's emerging needs, particularly in sectors such as healthcare, aged care, and technology solutions aimed at enhancing productivity and supporting an aging workforce.
Korea is also facing a pivotal moment politically, with the upcoming legislative election scheduled for 10 April, which marks the midpoint of President Yoon Suk Yeol’s single five-year term. This election will decide the number of members of the National Assembly who will support Yoon’s government for the remaining two years. The National Assembly has 300 members elected for a four-year term, 253 in single-seat constituencies and 47 members by proportional representation. The AKBC will watch the election closely to understand the implications for Australia-Korea relations, particularly in the areas of South Korea's foreign policy, economic priorities, and energy policy.
Finally, as you would have seen, last week we announced the dates of the 45th Australia-Korea Business Council/Korea-Australia Business Council Joint Meeting as 1-3 September 2024 in Perth. The Joint Meeting offers an unparalleled platform for strategic discussion, networking, and enhancing the mutual understanding of Australia and Korea. We encourage you to sign up or renew your membership to secure your spot early, and we look forward to welcoming our members to what promises to be an enriching and productive conference, emblematic of the strength and potential of the Australia-Korea partnership.
Sincerely,
Liz Griffin
CEO
Australia-Korea Business Council
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