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1. South Korea's 5G Ambitions

Author:
Clara Gillespie
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Under President Moon Jae-in, South Korea has set an ambitious target to move from being “first in the world” in the race to 5G to “first in global quality.” Yet, while a range of industry and government stakeholders are investing heavily in making this vision a reality, a number of factors are likely to weigh on whether or not these efforts yield significant results. These include uncertainties about how to further accelerate development in ways that lead to better returns on investments, and about how to navigate complex geopolitical considerations, including ongoing debates about Huawei’s involvement in 5G network infrastructure. Each of these areas will, in turn, require domestic stakeholders to make complex assessments about potential tradeoffs and risks. Thus, this paper assesses South Korea’s emerging 5G era at the one-year mark, and highlights key successes, setbacks, and ongoing challenges. Building on these findings, the paper concludes by offering several potential scenarios for future development, and suggestions for ways forward.
Topic:
Economics, Science and Technology, and 5G
Political Geography:
Asia and South Korea

2. Economic Relations between Russia and South Korea in the New Northern Policy

Author:
Liudmila Zakharova
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The New Northern Policy, proclaimed by the South Korean President Moon Jae-in in Vladivostok in September 2017, is designed to boost economic cooperation between Russia and South Korea. However, two years after a special presidential committee was created to plan and coordinate joint economic efforts, few results have been achieved. Bilateral trade has continued to increase with limited change to its structure: Russia mostly sends its mineral resources to South Korea and receives industrial products in return. New ROK investment in the Russian Far East has yet to occur, despite South Korea’s efforts to assist its businesses in finding profitable Russian projects. Seoul tried to convince Moscow that concluding a free trade agreement in the near future is necessary for intensified cooperation, but Russia prefers a more gradual approach to trade liberalization. InterKorean rapprochement in 2018 laid a foundation for further progress in the implementation of multilateral economic projects involving Russia if the international sanctions against North Korea were to be eased. Therefore, bilateral relations between Russia and the ROK can also be viewed from the perspective of promoting regional cooperation with North Korean participation.
Topic:
International Relations, Economics, and Bilateral Relations
Political Geography:
Russia, Asia, South Korea, North Korea, and Korea

3. Finding an Advocate: The Role of the Private Sector in Korea-Japan Relations

Author:
Jiwon Nam and Kristin Vekasi
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Tensions between South Korea and Japan are frustratingly persistent. Despite the shared interests of both countries, such as economic development in Southeast Asia, and keeping a robust alliance with the United States, South Korea and Japan maintain a bellicose relationship because of unresolved historical misunderstandings and territorial disputes. Inconsistent diplomatic policies and lack of strong leaders have made it difficult to prevent unnecessary hostility between South Korea and Japan. Fear of losing support has prevented politicians from pursuing friendly policies towards each other. Businesspeople, too, have been reluctant to pursue friendly policies towards each other, because of preconceived risks of being targeted for backlash. An examination of economic data shows these risks are minimal, and political tensions do not affect business or consumer behavior. Current efforts from both Korean and Japanese business organizations to improve cooperation include student exchange programs, recruitment processes, and public diplomacy. We urge the business community to advocate more to improve bilateral relations. Economic relations alone are insufficient to handle the task of improving a difficult relationship; there is also a need for leadership. In South Korea-Japan relations, the business community should step in and provide that role.
Topic:
Economics, Bilateral Relations, Business, and Private Sector
Political Geography:
Japan, Asia, South Korea, North America, Korea, and United States of America

4. From Failed Economic Interfaces to Political Levers: Assessing China-South Korea Competition and Cooperation Scenarios on North Korean Special Economic Zones

Author:
Théo Clément
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
While North Korea has developed Special Economic Zones for several decades now, these zones have attracted little attention from foreign investors, due to a mix of lack of economic reforms in the DPRK, the tense geopolitical situation, and China’s peculiar economic engagement towards North Korea. With the denuclearization process and North-South dialogue moving forward, this situation could change as South Korea’s announced policy of economic engagement with the North could provide Pyongyang the opportunity to play Beijing against Seoul to maximize its interests and attract foreign investment in Special Economic Zones from partners keen to maintain close ties with the DPRK.
Topic:
Economics, Bilateral Relations, Investment, Trade, and Denuclearization
Political Geography:
Asia, South Korea, North Korea, and Korea

5. The Case for Kaesong: Fostering Korean Peace through Economic Ties

Author:
International Crisis Group
Publication Date:
06-2019
Content Type:
Special Report
Institution:
International Crisis Group
Abstract:
The Kaesong Industrial Complex, closed since 2016, was the most successful joint economic venture undertaken by North and South Korea. Reopening the manufacturing zone, with improvements to efficiency and worker protections, could help broker wider cooperation and sustain peace talks on the peninsula. What’s new? In 2016, South Korea shuttered the Kaesong Industrial Complex, breaking a modest but productive connection between the two Koreas. Crisis Group’s analysis sheds new light on the economic performance of firms operating at the Complex, demonstrating that the benefits for the South were greater than previously understood. Why does it matter? Beyond helping restart the stalled peace process, a deal to reopen the Complex in exchange for a proportionate step toward denuclearisation by North Korea could produce mutual economic benefits that help sustain South Korean support for talks and encourage Pyongyang’s commitment to peaceful relations. What should be done? As part of any deal to reopen the Complex, Seoul and Pyongyang should take steps to address problems that previously kept it from reaching its potential. The more efficiently, profitably and fairly it works, the better the Complex can help foster and maintain stable, peaceful relations between the Koreas.
Topic:
Economics, Bilateral Relations, Negotiation, and Peace
Political Geography:
Asia, South Korea, North Korea, and Korea

6. The Cornerstone and the Linchpin: Securing America’s Northeast Asian Alliances

Author:
Patrick M. Cronin
Publication Date:
10-2019
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
During an era in which strategic gravity is shifting to Asia, the United States cannot be careless in tending to its alliances with Japan and South Korea (the Republic of Korea, or ROK). The three countries face persistent threats from North Korea and from China’s semi-transparent bid for regional hegemony. Meanwhile, rocky relations between Tokyo and Seoul are jeopardizing vital U.S. interests in the Indo-Pacific. The latest disagreement between America’s premier allies raises new questions about alliance strategy, commitment, and burden-sharing. These fissures have become exacerbated as the U.S. pressures allies to increase their contributions to regional security and reciprocal trade. [...] This report seeks to explain why the U.S.-Japan and U.S.-ROK alliance are still a vital means of achieving overlapping strategic interests. At the same time, it also argues that keeping these alliances fit for purpose requires radical change rather than business as usual. Both a rapidly changing security environment and growing intra-alliance squabbling pose dangers that require U.S. leadership. This report concludes with specific ideas for advancing bilateral and trilateral cooperation in the coming months and years, without trying to achieve too much too quickly.
Topic:
International Relations, Foreign Policy, Economics, International Security, and Alliance
Political Geography:
Japan, Asia, South Korea, North America, and United States of America

7. Tensions in U.S.-Korea Economic Relations

Author:
Troy Stangarone
Publication Date:
04-2018
Content Type:
Journal Article
Journal:
International Journal of Korean Studies
Institution:
International Council on Korean Studies
Abstract:
Following a relatively successful period for U.S.-South Korea economic relations under the Bush and Obama administrations, Washington and Seoul have entered a new period of economic tension in the Trump administration. Unlike prior U.S. presidents, who placed a priority on negotiating fair rules in the United States’ economic relationships, President Trump has prioritized outcomes. As a result, one of his administration’s earliest moves was to renegotiate the KORUS Free Trade Agreement. While the results of the renegotiation were modest, they may help to expand the sale of American automobiles in the Republic of Korea in the long-run. The largest outcome of the negotiations may be to protect the Ford Motor Company from South Korean competition in the U.S. market as the company transitions to sales focused on light trucks. While the renegotiation has eased tensions for the moment, the prospect of economic engagement with North Korea, the Trump administration’s continued use of national security to erect trade barriers, and the emergence of new technologies such as artificial intelligence and autonomous vehicles could result in growing tensions in the relationship.
Topic:
Economics, Treaties and Agreements, Bilateral Relations, Negotiation, Free Trade, and Donald Trump
Political Geography:
Asia, South Korea, North Korea, North America, and United States of America

8. Making Korea Grow Again: Rebalancing the Moon Jae-in Economic Agenda

Author:
Choong Yong Ahn
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The Moon Jae-in administration in South Korea has taken a two-pronged approach to ensure urgently needed job creation and inclusive growth. Although measures towards each set of economic policies have been implemented since Moon took office in May 2017, what’s often referred to as “incomeled growth” has been prioritized over innovative growth. The income-led growth model is largely driven by domestic consumption through pro-labor distributional policies including a wage hike to raise the disposable income of low- and middleincome individuals, thereby triggering equity with growth. Focused more on the supply side, the innovative growth model encourages startups to create jobs and innovate. It is a great challenge for Korea to pursue growth and equity through both sets of policies. After a year in office, the Moon administration’s economic agenda, often referred to as J-nomics, has not fully produced the intended policy objectives in terms of job creation and growth. To mitigate a declining potential growth rate and pursue robust and inclusive growth, the twin policies need to be rebalanced, reprioritized, and interconnected in a mutually reinforcing manner to empower the private sector to play a bigger role. As a mid-sized open economy, Korea requires global market competitiveness on the supply side to create decent jobs by buoying entrepreneurship and innovation. Structural reforms in the labor market combined with deregulations necessary for the advent of disruptive 4th-industrial-revolution technologies must be expedited. Furthermore, a new business ecosystem in which win-win collaborations between globally-oriented conglomerates and small businesses must be encouraged to replace a zero-sum business culture.
Topic:
Economics, Science and Technology, Global Markets, and Economic growth
Political Geography:
Asia, South Korea, and Korea

9. The Economic Importance of the KORUS FTA: A Case Study of the Korean Beef Market After Renegotiations

Author:
Jin Kyo Suh
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Beef trade was a major sticking point between the United States and South Korea in ratifying the KORUS FTA. The outcome of the renegotiations that led to the March 2018 agreement in principle did not impact sections pertaining to beef in the agreement, though looking at how beef trade would have been affected should the talks have failed highlights the importance of the agreement to both countries, but particularly the United States. This paper estimates the demand for imported beef in South Korea by source and product by using the production version of the Rotterdam demand system and assesses what the potential impact of U.S. withdrawal from the KORUS FTA would have been on beef trade between the U.S. and South Korea. The results suggest U.S. withdrawal from the KORUS FTA would have resulted in a considerable increase in Australian beef exports to South Korea, largely at the expense of U.S. beef. This is because there is significant price competition between beef imports from the United States and Australia. Furthermore, Korean consumers substitute American beef for Australian beef when the relative price of U.S. beef rises.
Topic:
Economics, Treaties and Agreements, Exports, and Trade Policy
Political Geography:
Asia, South Korea, North America, Korea, and United States of America

10. The United Nations Development Programme and the Two Koreas

Author:
Gabriel Jonsson
Publication Date:
10-2017
Content Type:
Journal Article
Journal:
International Journal of Korean Studies
Institution:
International Council on Korean Studies
Abstract:
This paper examines the United Nations Development Programme’s role in South and North Korea’s economic development. The UNDP is not only the UN’s lead agency for economic and social development, it is one of the few UN organizations to have worked with both countries in traditional bilateral arrangements, as well as a in multilateral initiative. Operating in South Korea from 1963 to 2009, the UNDP contributed to the nation’s economic development by complimenting the government’s policies. However, its role was minor compared to the government’s own actions. Nonetheless, South Korea has served on the UNDP board four times since its UN admission in 1991, raising the country’s diplomatic standing. After North Korea joined the UNDP in 1979, the organization’s work in the country focused on improving food production and supporting industrial development. These activities helped improve the economic crisis since the 1990s. In the 1990s, the UNDP provided humanitarian assistance and scholarships to develop human resources. Pyongyang officials restricted the UNDP’s work throughout the time it was active in North Korea. These violations led the UNDP to suspend operations in 2007. Since the early 1990s, the UNDP has supported the Tumen River Area Development Program, the only initiative that involved the two Koreas, as well as China, Russia and Mongolia. Although the UNDP facilitated initial contacts, it was unable to overcome longstanding animosities and disagreements. The successor Greater Tumen Initiative continues to languish.
Topic:
Economics, Government, United Nations, and United Nations Development Program (UNDP)
Political Geography:
Asia, South Korea, North Korea, and United Nations