Latvian President Rinkēvičs seeks closer ties with S.Korea in bio, defense

Latvian President Edgars Rinkēvičs, who is on a four-day working trip to South Korea, said on Friday he hopes for deeper cooperation between the two countries in the pharmaceutical, biotechnology, defense and advanced manufacturing sectors.

“Latvia is a European biotech hub and Korea has a rapidly growing biotech industry. If we cooperate, we can generate significant synergy,” he said in an interview with The Korea Economic Daily.

He proposed bolstering business cooperation between the countries in remarks at the Latvia-Korea Business Forum 2024, which is being hosted by the Latvian government and The Korea Economic Daily.

The forum, held in Seoul, brought together Latvian President Rinkēvičs; Sohn Kyung-shik, chairman of the Korea Employers Federation; and more than 80 business leaders from the two countries.

Business leaders sought avenues for cooperation in the energy, defense, pharmaceuticals, biotechnology and culture industries, organizers said.

Participating companies include multinational firms operating in Latvia, such as hydrogen-powered aircraft maker Pocor NextGen of the Netherlands, pharmaceutical firm GreenDex, and US defense and drone maker Edge Autonomy.

Korean firms attending the forum include Hanwha Aerospace Co., LIG Nex1 Co., Korea Aerospace Industries Ltd., Doosan Enerbility Co. and Samsung Bioepis Co.

A GOOD PARTNER FOR KOREA

President Rinkēvičs said Latvia can be “a good partner for Korea” to enhance the competitiveness of Korean businesses.

“Interest in Korean companies is growing in Latvia,” he said.

During his visit to Korea, the Latvian president held a summit with his Korean counterpart Yoon Suk Yeol on Thursday.

There, Rinkēvičs presented Latvia as a strategic gateway for Korean companies seeking to enter the European market.

Latvia is home to several prominent pharmaceutical firms such as PharmIdea and OlainFarm.

According to Seoul’s presidential office, the two leaders also explored the possibility of cooperating in the artificial intelligence sector.

Rinkēvičs stressed the importance of boosting Latvia’s defense capabilities in view of the Ukraine war and expressed a willingness to cooperate with Korean defense companies to advance Latvia’s defense capabilities.

Yoon said Korea can be a “reliable partner” in Latvia's efforts to bolster its defense capabilities, while Rinkēvičs expressed interest in collaborating on air defense systems and drone technologies.

DEFENSE, SHIPBUILDING

Fredrick Riker, chairman of Edge Autonomy, said at the forum that the company has built more modernized facilities in Latvia than in the US. He urged Korean companies to explore partnerships with Latvia.

Mārtiņš Baumanis, the Latvian Investment and Development Agency’s head representative in Korea, said that as a leader in military technology, Korea is in a strong position to collaborate with Latvia.

"Initially, Latvia aimed to raise defense spending to 3% of GDP by 2027, but we’ve already achieved this target this year," he said.

The Baltic region where Latvia is located is known for durable, highly insulating wood products.

Latvian birch plywood is widely used in LNG carrier insulation.

Valdis Kulpe, director of Latvijas Finieris, a leading Latvian plywood products maker, said the company’s insulation technology has been used in 182 LNG carriers, including vessels built by HD Hyundai Co. and Samsung Heavy Industries Co.

He said the Latvian company’s supply volume to Korea has quadrupled to 30 million euros this year from 8 million euros in 2022.

TAX INCENTIVES, INVESTMENT OPPORTUNITIES

Industry officials said Latvia seeks to attract Korean investors with its efficient tax policies.

The Baltic nation ranked second globally in the 2023 tax competitiveness index conducted by the US-based Tax Foundation. It ranked first in the corporate tax policy segment.

Baumanis said Latvia’s tax philosophy focuses on encouraging entrepreneurship. He added that profits from reinvestment in the country are tax-free.

Foreign direct investment in Latvia surged from 11.05 billion euros in 2013 to 24.6 billion euros in 2023, growing at an average annual rate of 10%.

Latvia is emerging as an economic hub in the EU bloc with a per capita GDP of $23,184 in 2022. Sharing a border with Russia, Latvia has strong potential for collaboration in the defense and energy sectors, analysts said.

Write to Han-Shin Park, Tae-Ung Bae and Jin-Gyu Maeng at phs@hankyung.com
In-Soo Nam edited this article.