Korean Businessmen’s Withdrawal from Iraq

With an unstable security situation in Iraq, Korean domestic companies have been facing a serious problem in moving forward to Iraq since the end of the Iraqi war.

After foreign civilians were abducted and released by Iraqi militant groups, some Korean firms which have built their branch offices in Iraq started discussing contingency plans including the withdrawal of their employees on the ground, associated industries said on Friday.

Those considering the safety of their workers as a top priority have cautiously been looking at the unfolding situations on the site. So far, no companies have decided to close their branches in Iraq.

Hyundai Engineering & Construction Company, which received a rebuilding construction contract worth $220 million from Iraq last month, issued an emergency safety guidance to their employees in Iraq.

“I told our five people at a hotel in Baghdad to stay indoors as much as possible and never go to any site with foreign nationals being targeted by terrorists. But I’m still excluding the possibility of withdrawing our staff out there,” Vice President Kim Ho-young said.

It expected to begin rebuilding construction by late May or by early June if the current situations are pacified, not plunging into civil war.

LG Electronics Inc., which had built the so-called “One Staff Branch” in Baghdad last Sunday first among Korean electronics firms, pulled out its Iraqi office chief, Nam Tae-woon, from Baghdad. As the Iraq Rebuilding Exposition was being delayed to the end of April, he returned to Amman, Jordan on Tuesday. Now he cannot come back to Baghdad due to security problems in Iraq. Samsung Electronics Inc. has been doing business through its personnel in Amman and told them to refrain from making business trips to Iraq for the time being.

Hyundai Motor Company, which opened its display and sales shop in Baghdad as the first one in Korean car industry on March 29, has been trying to come up with countermeasures against the long-term insecurity in Iraq while looking closely at the current situation.

So far, Hyundai Motor Company has been making its Baghdad shop run through its local sales network in the Middle East, thus it has no Korean staff members in Iraq. Its 17 staff members in the Dubai headquarters have been managing in control of Iraq as well. It ordered them to avoid business trips to Iraq if possible and discuss it with Seoul’s head office if it is unavoidable.

Korean trade industries, with the intention of expanding its market to the Middle East, are being put on emergency as well.

Samsung Corporation and Daewoo International Corporation ordered their people in the Middle East to restrain from taking business trips to Iraq and have been preparing for emergency while being in close contact with each other. Hyosung Co., Ltd. allowed a sales staff member to return to Korea on Thursday. Korean businessmen, including those of Hwasung Co., Ltd. and Woori Corporation, have been gathering at hotels in Baghdad and refrained from going out.

In the meantime, the Ministry of Commerce, Industry and Energy are in emergency contact with KOTRA (Korean Trade-Investment Promotion Agency) Baghdad Trade Center and some Korean branch offices in Iraq. Under such circumstances, the Ministry of Construction and Transportation is communicating closely with Korean construction firms in Iraq, too.

Kwang-Hyun Kim Jin-Suk Huh kkh@donga.com jameshuh@donga.com