Tag Archive | "development"

Five Surprising Ways South Korea and the United States are Working Together

By Jenna Gibson

This week, South Korea became the first Asian country to sign a space cooperation pact with the United States, the first step for the two countries to collaborate on projects like Mars exploration, launching a moon lander, and expanding possible uses of the International Space Station. This announcement strengthens what is already a robust relationship between South Korea’s space program and NASA, which KEI has discussed extensively through our podcast and other research projects.

This announcement may come as a surprise to those who see the U.S.-Korea relationship mostly in terms of security cooperation. However, there are many arenas where the United States and South Korea work together outside of the military alliance. Here are five surprising places where these two countries collaborate.

 1.      Improving maternal and child health

The United States and South Korea have a long history of cooperation on development assistance, beginning with American help in the wake of the Korean War to South Korea’s entry into the donor community in the 1990. South Korea’s development assistance agency, which celebrated its 25th birthday recently, has close ties with USAID. A joint project launched in 2013 focuses on combatting maternal, newborn and child health concerns across sub-Saharan Africa. Another new project will look into ways to promote sustainable development in Southeast Asia through science and technology.

2.      Developing wireless charging technology for electric cars

A grant from the US Department of Energy is helping fund a project to develop wireless charging capabilities for electric vehicles. The Hyundai-Kia America Technical Center (based in Ann Arbor, Michigan) and American company Mojo Mobility are collaborating on the project, which aims to improve the speed and convenience of charging for electric vehicles.

3.      Curing cancer

In 2015, the Korean National Cancer Center signed an agreement with the U.S. National Institutes of Health to share information and work together on cancer treatment and prevention. According to the Korea Herald, “The NCC seeks to set up a database of medical records of its 1.2 million patients who have suffered or survived cancer. Once the database is complete, the NCC plans to analyze the ‘big data on cancer’ for preventive measures and post-recovery treatment of the disease.”

4.      Stopping wildlife traffickers

South Korea and the United States have been working on a range of environmental issues, from climate change to sustainable fishing. But one interesting area of collaboration is on wildlife preservation. According to a Work Program adopted by the two governments in 2013, they are working to “Improve collaboration and communication among judicial, law enforcement, customs, and border security personnel in seizing illegal shipments of wildlife products, investigating wildlife crime, prosecuting wildlife traffickers, and dismantling transnational organized criminal networks.” In a related field, the Work Plan also includes a provision to engage in information exchange and dialogue with the goal of fulfilling wildlife management responsibilities, with an emphasis on the preservation of waterbirds and their habitats, and the restoration of habitat. This includes birds that migrate between the United States and the Republic of Korea, and threatened and endangered species of birds.”

5.      Cooperating on nuclear energy technology

In 2015 the United States and South Korea signed a new nuclear cooperation agreement, or 123 Agreement to replace the original agreement that had been in place since 1984. The two countries have already began to cooperate on “shared objectives such as spent fuel management, assured fuel supply, promotion of cooperation between our nuclear industries, and nuclear security.” An extensive KEI report written last year by former Department of Energy and Department of State official Dr. Fred McGoldrick delves into the details of this new agreement.

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from K putt’s photostream on flickr Creative Commons.

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The Korea International Cooperation Agency Turns 25

By Jenna Gibson

Twenty five years ago today, South Korea established the Korea International Cooperation Agency (KOICA), officially cementing its unprecedented transition from aid recipient to donor.

It’s a story that Koreans are rightly very proud of – in the 1960s, still reeling from the Korean War, the country’s per capita income was less than $100. It is now more than $25,000.

Part of the story is the famous Miracle on the Han River, which emphasized industrialization and manufacturing, creating an export-oriented economy that propelled Korea into the developed world.

But part of the story was the crucial development assistance provided by the international community in the wake of the war. In today’s dollars, South Korea accepted $44 billion in grants and loans throughout its development process (1945-1999). Korea was officially removed as a recipient of international aid in 2000, and it joined the Organization for Economic Co-operation and Development’s Development Assistance Committee as a donor in 2009.

Established in 1991, KOICA became the face of Korea’s emergence as an aid donor. The organization distributed $10.7 billion in official development assistance from 2001 to 2013. They supported 213 projects in 54 countries around the world in 2015. And after Korea played host to hundreds of Peace Corps volunteers in the 1960s and 70s, KOICA now runs the World Friends Korea program, a Peace Corps-inspired volunteer project that has dispatched more than 10,000 volunteers since its inception in 2009. (If you are interested in hearing more about Korea’s development and aid, click here to listen to our interview with two Peace Corps volunteers who served in post-war South Korea).

Other projects include providing training for policymakers and officials from other countries to learn about Korea’s development successes, as well as provide funding for infrastructure and capacity-building projects. They even have a taekwondo program, in which taekwondo instructors serve as trainers for bodyguards, soldiers and police officers around the world as well as participating in cultural events and showcases. One volunteer, dispatched to Peru in 2008, coached the country’s national team and helped Peru bring home its first international Taekwondo medals.

With the UN’s new Sustainable Development Goals in mind, KOICA has set its sights on improving access to education for girls, fighting infectious diseases, and combatting climate change. “We envision becoming a development cooperation platform that works to initiate a new era of global happiness,” its mission statement reads. It’s a lofty goal, to be sure, but considering how far Korea has come, it may not be out of reach.

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from newflower’s photostream on flickr Creative commons.

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The Seoul G-20 Five Years On: Development

By Kyle Ferrier

Five years have passed since South Korea served as the G-20 host in 2010, yet contributions from its presidency of the multilateral economic forum are crucial to this year’s talks. This week’s G-20 summit in Antalya, Turkey is underpinned by months of dialogue between a range of government officials from all parties involved, including invited countries and international organizations. Moreover, it is also built on the contribution of agenda items added by rotating host countries at each previous G-20 meeting since Seoul. This year the Turkish government has included what it deems as the three “I’s” of its presidency: inclusiveness, implementation, and investment for growth. In 2010 the Lee Myung-bak administration chose to concentrate on development and global financial safety nets. The continued importance of the former will be examined below, while the latter will be separately analyzed in my next blog post.

Development may have been officially added to the G-20 agenda in Seoul, but its origins within the forum can be traced to the Toronto summit that took place during South Korea’s chairmanship of the G-20.  The inclusion of development on the agenda symbolized the organization’s shift from primarily managing the global financial crisis to global economic governance. At the Toronto summit in June 2010 the G-20 Development Working group was formed, chaired by South Korea and South Africa. Through this leadership role Korea proposed ideas such as a nine-pillar development agenda[1] to address the areas most vital for sustainable growth and a multi-year action plan to implement these ideas, which would form the framework for the Seoul Development Consensus for Shared Growth adopted that November.

Despite some early difficulties, G-20 work on development has played a key role in addressing core issues that have proven too divisive in other multilateral economic institutions. The precarious sovereign debt crisis in Europe overshadowed all other agenda items at the next meeting of leaders in Cannes, yet an agreement on increasing food security and reducing volatility in food prices were the most prominent initial successes for the G-20 development agenda. These issues were brought more to the forefront in Los Cabos in 2012 as the market downturn in Europe was increasingly under control and as Mexico’s chairmanship focused the agenda on food security, infrastructure and inclusive green growth. The 2013 St. Petersburg summit highlighted the work of the multi-year action plan for the original nine pillars outlined in Seoul Development Consensus and inclusive green growth. Out of the 67 original commitments made in 2010, roughly half were assessed as completed, half ongoing, with only one area concerning environmental safeguards considered as stalled. Also issued was the St. Petersburg Development Outlook delineating the course of the development agenda to focus on five core issues,[2] building on the work advanced in Seoul. Last year in Brisbane a Food Security and Nutrition Framework was adopted, leaders committed to reducing the costs of remittances, and developing countries were more engaged in Base Erosion and Profit Sharing (BEPS) talks intended to close gaps in international tax rules benefiting multinational corporations at the expense of local government revenues.

Addressing challenges facing low income developing countries and a monitoring mechanism to ensure accountability were at the core of this year’s agenda. As part of Turkey’s priority for inclusiveness, youth unemployment has featured prominently . Countries hoped to reduce youth unemployment through encouraging growth of SMEs and their integration into global value chains. The remaining “I”, investment, saw the development of country-specific investment strategies to attract private sector funds, including reforms to improve the investment climate. Talks this year have further advanced past initiatives such as BEPS and food security, with the first meeting of G-20 Ministers of Agriculture since 2011.

On its own merits South Korea’s addition of development to the G20 agenda has clearly been crucial to talks since, yet its importance may be best demonstrated in relation to the steep challenges faced by other institutions when attempting to resolve development concerns.  The continued inability of the WTO to close the Doha Development Round (DDA), originally intended to be finished by January 2005, is directly attributable to the divide between advanced and emerging economies on development issues such as the special and differential treatment for developing countries and agriculture, both of which are being progressed in the G-20. The split on these issues and the organization of WTO rounds defined by a singular undertaking, in which nothing is agreed until everything is agreed, along with the sovereign equality in voting for its large, diverse membership has made any agreement quite elusive. This has catalyzed a shift in the shaping of trade norms away from the multilateral level to bilateral and plurilateral agreements.

The last attempt to create a comprehensive multilateral agreement on investment was conducted in the OECD in the late 1990s. Despite being a selective plurilateral institution, the OECD attempted to multilateralize its own liberal investment norms by reaching an agreement between a critical mass of countries, constituted by its own membership, which would then result in a cascade of adoption of these policies among other countries. However, the intentional omission of developing countries from the talks to engender a more ambitious agreement was ultimately its undoing in 1998. Though there are some investment-related multilateral agreements, such as the agreements on Trade-Related Aspects of Intellectual Property Rights and Trade-Related Investment Measures, much like trade, the momentum has shifted away from multilateralism. Sustained work on investment in the G-20, especially as it relates to infrastructure, plays a significant role in fostering global cooperation on this issue, which also poses a challenge in the WTO.

Although institutions such as the WTO and OECD continue to be vital to global economic governance and norms, the structure of the G-20 allows it to make headway on development issues where other institutions cannot. The G-20 not only represents the vast majority of OECD states, with a number of states falling under EU membership, but also key emerging economies whose leadership of developing country coalitions in the WTO, such as the G-20 developing countries and G-33, has contributed to the deadlock in the DDA. By presenting the leaders of the largest emerging markets the opportunity to voice their concerns and addressing the issues piecemeal, the G-20 has been an ideal forum for pushing through work on economic norms as they relate to development. In this regard, the addition of development to the agenda at the Seoul summit should be regarded as one of the most significant legacies of the G-20.

Kyle Ferrier is the Director of Academic Affairs and Research at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from the U.S. Mission to the United Nations Agencies in Rome’s photostream on flickr Creative Commons.


[1] The nine issue areas are infrastructure, private investment and job creation, human resource development, trade, financial inclusion, growth with resilience, food security, domestic resource mobilization and knowledge sharing.

[2] These are food security, financial inclusion and remittances, infrastructure, human resource development, domestic resource mobilization


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How a Northeast Asian Development Bank Could Succeed

By Kyle Ferrier

In a 2014 speech in Dresden attempting to apply lessons from German unification to the Korean Peninsula South Korean President Park Geun Hye introduced the possibility for a Northeast Asian Development Bank. Still in the nascent stage of planning, it would serve as a multilateral development bank (MDB) to attract investment in Northeast Asia, specifically intending to incentivize the DPRK to denuclearize through access to external capital for development. Though the origins of the concept for a Northeast Asian Development Bank can be traced as far back as 1991, President Park’s remarks were of great consequence as they signify the beginning of Seoul’s first attempt to materialize the idea. Over the past several weeks South Korea has explicitly sought the support of potential key members for the initiative in the following forums:

  • September 2, after meeting with President Park, Chinese Premier Li Keqiang stated China would seriously consider jointly setting up the bank with South Korea
  • September 5, Finance Minister Choi Kyung-hwan spoke with his Chinese counterpart at the G-20 conference
  • September 9, President Park received the first president-designate of the Asian Infrastructure Investment Bank (AIIB) at Cheong Wa Dae.
  • September 15, Vice Finance Minister Joo Hung-hwan met with the U.S. Treasury’s Under Secretary for International Affairs at the Inter-American Development Bank special governors’ conference

With a campaign for U.S. and Chinese approval underway, the upcoming Park-Obama summit next week seems like the natural progression for the ROK to pursue higher support for this endeavor. However, after last month’s landmine incident and the potential for a DPRK provocation, the breakthrough in inter-Korean relations required to initiate the proposed MDB would seem to be quite out of reach in the near future. This may make the Northeast Asian Development Bank appear to be more idealistic than practical, but the merits of such a proposal from a different perspective should not be understated.

The late Robert Scalapino, a highly influential U.S. political scientist, referred to Northeast Asia as a “natural economic territory,” emphasizing the latent economic growth in the Tumen River Basin area. The ability to fully reap the economic gains from this politically divided area is heavily dependent upon cooperation between the governments of China, Russia, South Korea, North Korea, and Mongolia. The United Nations Development Program (UNDP) helped establish the Tumen River Development Program, later evolving into the Greater Tumen Initiative (GTI), with the above countries minus North Korea to facilitate this economic cooperation. The original UNDP estimate in 1991 of $30 billion of infrastructure investment required over 20 years may be quite modest, as some experts estimate the annual infrastructure needs of Northeast Asia to be as high as $63 billion, inclusive of the DPRK.

Though there are several Asian Development Bank (ADB) projects within the greater Tumen area in China and Mongolia, they are relatively small. The introduction of the AIIB will certainly bring more capital for infrastructure, but the estimated $250 billion of institutional capacity expected by 2020 will be stretched thin as infrastructure demand is estimated to reach $8.3 trillion in 2020 within the boundaries of AIIB’s mandate. Furthermore, North Korea is ineligible to receive loans from existing MDBs as it is not a member of the ADB or the World Bank and was rejected by the AIIB earlier this year because of the absence of reliable economic data. North Korea’s absence from regional development initiatives and the underwhelming progress of its Special Economic Zones severely hampers economic growth in the region.

By attempting to ex ante tie formalized development assistance to denuclearization, the ROK hopes to simultaneously capitalize on its security interests, promote the Park Administration’s Eurasian Initiative, and allay the cost burden in certain unification scenarios. However, Seoul has already proposed numerous inter-Korean and regional development projects aimed at incentivizing Pyongyang to abandon its nuclear program without any noticeable success. The most promising factor differentiating the Northeast Asian Development Bank from previously proposed projects is that it would formalize regional economic cooperation between the other GTI members who are also part of the Six-Party Talks: China and Russia.

The key means to influence Pyongyang over the nuclear issue via a Northeast Asian Development Bank proposal is not access to external capital for internal development but the potential for an altered incentive structure to affect Russian and Chinese approaches towards the DPRK. For Beijing, developing the three provinces bordering North Korea and Russia nicknamed the “Rust Belt” is a high priority just as developing the Russia Far East (RFE) region is for Moscow. Tying the institutionalization of cooperation for regional development and the mobilization of funds that it entails with denuclearization would increase the incentive for these countries to utilize their substantial political influence within the DPRK to pressure the Kim Jong-un regime to be more engaged in nuclear disarmament talks. The costs of DPRK disengagement would be much larger in the form of forgone growth to the Rust Belt and RFE. Since the fall of the Soviet Union, Pyongyang has found support in Beijing, which is arguably waning after the execution of Jang Song Taek in 2014. Nevertheless, as U.S. National Security Advisor Susan Rice stated prior to the Xi-Obama summit, China remains a “fulcrum” of influence on the DPRK. The growing rift between these communist neighbors has led Russia to benefit from a rapprochement with North Korea.

The deadlock on the nuclear issue in North Korea has driven Pyongyang to Moscow and Beijing as they are willing to offer support, though to a varying degree, in order for better relations and regional stability, prolonging the current state of affairs. Although growth in the Rust Belt and RFE are of major concern to their respective capitals, both countries also ascribe to the notion that conflict on the Korean Peninsula would create an influx of refugees to these regions that would further deteriorate the local economic situation. In other words, in relation to security strategies, economic considerations have not challenged the status quo. Proposed infrastructure projects, such as connecting a trans-Korean railway to the Trans-Siberian Railway and a trans-Korean gas pipeline to Russia, are intended to work within the existing political economic framework and have seen limited progress. A Northeast Asian Development Bank tying together security and economics may engender a paradigm shift wherein economic factors could motivate Russia and China to take stronger stances for peaceful denuclearization to meet their infrastructure and security interests.

A long-standing supporter of linking the abandonment of nuclear weapons with foreign aid, the United States should pledge its support to a Northeast Asian Development Bank if raised by President Park next week. Though the diplomatic buildup suggests the Northeast Asian Development Bank is likely to be discussed, the possibility for it to further complicate the Obama administration’s response to the AIIB could result in its omission in the media. Yet this possible public relations predicament could easily be managed because the U.S. may be more involved in establishing the structure of the proposed bank from the onset as opposed to observing the AIIB’s creation. There is significant potential for the Northeast Asian Development Bank to bring about long term stability and growth in the region through affecting Russo-DPRK and Sino-DPRK relations and should be seriously considered by any prospective members.

Kyle Ferrier is the Director of Academic Affairs and Research at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from  Jason Rogers’ photostream on flickr Creative Commons.

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How North and South Korea Have Changed Since the Korean War

With the 70th anniversary of the end of World War II over the weekend, KEI takes a look back at what has changed on the Korean Peninsula from the 1945 to today. The three boxes compare a unified peninsula before the Korean War to North and South Korea in the 2010s. By looking at GDP, economic production, the number of radio stations, literacy and urban population, it becomes clear how far the peninsula has come in the past seven decades and how far apart its two halves remain today.

SK-NK Graphic1

Graphic created by Jenna Gibson, Associate Director for Communication Technology and Programs at the Korea Economic Institute of America, with assistance from Bradley Sancken, Jina Shin, Christopher Kang, and Lilka Marino at the Korea Economic Institute of America.

Photo a composite of photos by bradhamonds of Seoul and lawrenceyeah of Pyongyang on flickr Creative Commons.


CIA World Factbook

38 North

“Japanese Colonialism and Korean Economic Development, 1910-1945”

Maddison Project

“The Population of Korea”

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Assessing China-DPRK Trade and SEZ Potential: The Dandong Trade Fair

By Adam Cathcart

As the rest of the world gets accustomed to seeing Kim Jong-un walk with a cane, we might do well to figure out what, if anything, is changing about the way that the broader North Korean state engages with the economic powerhouses that engulf its southern and northern peripheries. KEI’s Director of Research recently assessed the outlook for improved inter-Korean economic relations in the aftermath of the surprising visit of a high-level North Korean troika to the closing day of the Asian Games in Incheon. And while there have been no equally high-level trips to Beijing from Pyongyang, North Korea’s economic relations with China, particularly developments along the shared frontier, are arguably as important to the future of the DPRK economy.

There has been an awful lot of ammunition provided lately to proponents of the point of view that Chinese-North Korean relations are in a downward spiral. The North Korean hijacking of a Chinese vessel from a small port outside of Dalian in September certainly did not help matters. But to point only to the problems and disputes — while they are many — should not blind us to the ongoing daily interactions and transactions that fuel the North Korean consumer economy and keep the DPRK afloat.

This past June, I prepared a research paper for KEI that showed that North Korea’s strategy for Special Economic Zones with China was changing rapidly, and argued that the power struggle around Jang Song-taek was intimately tied to the lack of progress on the Yalu River showcase SEZs at Hwanggumpyeong and Wihwa Islands. The new Economic Development Zones that Pyongyang proposed in lieu of these Chinese-financed zones have since made very little headway. In the meantime, the North Korean government has welcomed a University of British Columbia professor again to Pyongyang to lecture on SEZ law, small-scale training programs are going forward (often off-site, in places like Singapore), and the Rason Special Economic Zone has hosted very small seminars on SEZ set-up. In general, however, SEZs remain extremely peripheral to the broader economy and in many cases are nascent and conceptual at best.

The upcoming Sino-DPRK trade fair in Dandong, scheduled for October 16-20, thus should serve as an ideal test case for a number of things. (The formal title of the event is ‘The Third China-North Korea Trade, Culture and Tourism Exhibition Fair / 第三届中朝经贸文化旅游博览会.) I’d like to lay out five questions, and then offer some preliminary answers or possibilities:

1. What does Chinese information about the trade fair tell us about the direction of the China-North Korea trade ties?

Since the North Korean state has put forward virtually no preliminary public information about this event, we are largely beholden to Chinese state press releases. In one such release dating from September 19, the bureaucratic bodies listed as organizing the event on the Chinese side are the China Committee for the Advancement of International Trade (Liaoning Committee and Dandong Committee), the sub-committee on Industry/Trade & Banking of the China Committee for the Advancement of International Trade, the Liaoning Province People’s Association for Friendship with Foreign Countries, the Dandong City Government, and the Dandong Frontier Cooperative Zone Management Committee (丹东边境合作区管委会).

While there is less information available about North Korean interlocutors, it stands to reason that the North Korean members of the old Hwanggumpyeong and Wihwa Island SEZ joint management committee will be there, even if the SEZs themselves are not the centerpiece. These would include the provincial party secretary for North Pyong’an province, who appears to have survived the Jang Song-taek purge without a scratch.

Curiously, the name of the old Hwanggumpyeong and Wihwa SEZ committee appears to have been subtly altered to the Dandong Frontier Cooperative Zone Management Committee (丹东边境合作区管委会). This would fit in with the alterations by the CCP of Jang Song-taek out of the history of bilateral economic relations; photographs of Jang and pictures of the 2012 celebration of the SEZ launch outside of Dandong have now been covered up at the Yanbian Korean Autonomous Prefecture Museum.

2. To what extent are these businesses planning to avail themselves of the previously Jang Song-taek-affiliated SEZs just outside Dandong?

To a degree, this is one of the big questions that the trade fair itself will help to answer. The inaugural 2012 trade fair was very much tied in to the SEZ development, and benefitted from being on the heels of the big Jang Song-taek swing around the Northeast and Beijing in August of that year. The 2013 fair got caught in a kind of netherworld where it was clear the Sinuiju SEZs were not particularly going anywhere; the slogan for that year’s Trade Fair was appropriately amorphous and indicative of the need for some renewal: ‘新丹东、新机遇、新平台/New Dandong, New Opportunity, New Level.’  While PRC media touted the signing of 30 investment contracts at that fair for an alleged total of $500+ million USD and 50 investment contracts for an alleged total of $109 million USD, some portion of these were among minerals firms and little specific information was given about investment and trade contrasts specific to the SEZs.

This year’s event has had very little information released from the Chinese side that indicates that the Hwanggumpyeong and Wihwa Island SEZs are going to play any significant part in the proceedings. The inclusion of the term ‘safety/安全’ in the overall slogan for the Trade Fair would seem to function not just as a caution for North Korean comrades (see: fishing boat incidents in 2012, 2013, and 2014) but to Chinese companies that their investments in the DPRK are not a wholesale gamble. Of course, the legal protections of the SEZs between Dandong and Sinuiju were supposed to handle many of these concerns in the first place.

3. What role will tourism play at the fair, specifically tourism to the northwestern part of the DPRK?

It seems that the 2014 fair has made a conscious decision to broaden out the tourism and ‘folk-art’ aspects of bilateral exchange. The number of North Korean firms said to be coming to Dandong to participate is around 100 (this is up from 50 the year prior). Tourism along the border is picking up significantly and the North Korean border cities seem to be making more efforts (on a very small scale, usually) to accommodate Chinese tourists, about 190,000 of whom visited DPRK in 2012.

However, the Chinese market for tourism to North Korea is already rather saturated. A recent flight to the new airport at Tonghua from Beijing indicated that ambitions for tourist trips outstrips demand significantly, and China’s excess capacity along the border region has yet to be filled. The airport at Changbaishan (near Fusong) is another case in point, and new rail construction along the border is going at a good clip as well. The current amount of tourism to DPRK seems unlikely to make such construction expand for the next decade, so we will simply have to listen to the big dreams of the tour operators heading to Dandong with the hopes of making major progress.

4. Is this fair purely about bilateral relations, or will companies from third countries, and Taiwan and Hong Kong, also turn up?

Companies from 10 or more nations external to China and Korea are slated to attend. Russia will be a presence, but so, too, will Pakistan and India be represented among firms at the fair. In the past, firms from Taiwan and Hong Kong have participated, and that seems likely again this year.

5. What performing arts ensemble and/or officials will the North Koreans send, and what might that say about the importance with which they are approaching the event? What role will cultural exchange play?

Last year’s fair can be counted as a success on this front; a big opening gala in Dandong included a performance by the Mansudae Arts Troupe, which was a sure signal (if an indirect one), that Kim Jong-un approved of the bilateral fair and attached importance to it. This year, the Samjiyeon Ensemble of the Mansudae Arts Troupe seems the most likely group to represent North Korea’s large performing arts sector. Speaking from the standpoint of Party culture in both DPRK and PRC, Kim Jong-un could make a strong statement about his desire to improve relations with China by attending a test concert of the Arts Troupe ensemble before it goes to Dandong (as he did before the Unhasu Orchestra went to France), but given recent events, this seems highly unlikely. A small arts troupe from Dalian travelled to North Korea earlier this year, but cultural exchanges between the two countries are down significantly from their 2010-2011 high. Apart from getting a large North Korean ensemble onto Chinese soil, the main achievement of the fair in culture will probably be to sell yet more North Korean landscape and nature paintings to Chinese collectors. A broadening of bona fide people-to-people exchanges (such as exchanges of language teachers) seems again unlikely, so the fair’s emphasis on ‘culture’ needs to be seen in a rather limited light.

Adam Cathcart is a Lecturer in History at University of Leeds and Editor-in-Chief of SinoNK.com.  

Photo from Prince Roy’s photostream on flickr Creative Commons.

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Korea and Global Climate Change Negotiations

By Troy Stangarone

On September 23, South Korean President Park Geun-hye and more than 120 world leaders attended the United Nations Climate Summit in New York during the annual opening of the General Assembly. The summit, held as a prelude to the United Nations Climate Change Conference in Paris next year where world leaders hope to conclude a treaty to replace the Kyoto Protocol, served as an opportunity for world leaders to discuss ideas on how to address the issue of climate change and make pledges towards future contributions. While European nations have usually been at the forefront of efforts to curb climate change, in recent years Korea has become increasingly involved in efforts to address climate change.

Traditionally, the issue of climate change has been difficult to address for a series of reasons. Globally, there has been a division between developed and developing countries over who should bear the burden of adjusting to climate change. While developed countries have pushed for all nations to reduce emissions to combat the challenge, developing countries have sought to be exempt from emissions reductions to avoid slowing their economic growth. However, while a solution that only involved developed countries might have previously worked, with China and India now two of the world’s largest emitters, a solution that brings together the developed and developing world is needed. At a local level, issues such as how the adjustment will impact the international competitiveness of industry and the extent to which climate change is seen to be occurring have also impacted the ability to develop domestic support for mitigation initiatives.

In the case of Korea, the issue of climate change is relatively new to the agenda, but its economic development has made Korea a significant source of emissions. The Global Carbon Project estimates that annual emissions from Korea have grown from 13 metric tons in 1960 to 616 metric tons last year, making Korea the 7th largest emitter of carbon in the world behind China, Japan, the United States, and Germany among others. Though, on a per person basis Korea is only the 22nd largest emitter with each Korean emitting on average 13 tons of carbon last year. However, while the average Korean emits less carbon than the average American, they do emit more carbon on average than their counterparts in Japan, Germany, or China where emissions as a whole are greater than in Korea.

Under the Lee Myung-bak administration, Korea began to play greater role internationally as a rising middle power across a range of issues, one of which was climate change. As a middle power, Korea has often sought to serve as a bridge between the developed and the developing world. On the issue of climate change, Korea has pursued a series of policies both domestically and internationally that have raised its profile on the issue.

Following the global financial crisis, South Korea utilized its stimulus package as an opportunity to promote green growth initiatives domestically. In 2009, South Korea pledged to cut greenhouse gas emissions by 30 percent from business as usual in 2020 despite being classified as an Annex I (developing) country under the Kyoto Protocol and not having an obligation to cut emissions. Korea followed this up in 2012 by becoming the first nation in Asia to pass legislation to set up an emissions trading scheme (ETS) which is set to come into effect in 2015.

The initial legislation for Korea’s ETS targeted reductions across a range of sectors including a 61.7 percent reduction in emissions from electricity, a 27.7 percent reduction in semiconductors, 31.9 percent in automobiles, 34.3 percent in transportation, and a 27 percent reduction in household emissions. While pressure from the auto industry has led to a delay in a vehicle emissions tax designed to reduce emissions from automobiles, the ETS is still expected to come into effect next year with carbon priced at levels comparable with Europe’s ETS.

Korea also established the Global Green Growth Institute (GGGI), which later became a formal international organization, to help bring together research and best practices to address climate change and other environmental challenges through sustainable and environmentally friendly economic growth. The best practices developed at the GGGI could then serve as a means for developing countries to embrace policies that would promote growth, but also limit future greenhouse gas emissions.

On the international level, Korea serves as the host country for the Green Climate Fund (GCF). The GCF, which is part of the United Nation’s efforts to address climate change, is designed to provide financial assistance to developing countries through public and private investment as they transition to more sustainable forms of economic growth.  At the recent UN Climate Summit, President Park pledged up to $100 million for the GCF’s efforts, while six other countries made pledges raising the total pledged to the GCF to $1.3 billion. Including earlier pledges by Germany and Sweden, $2.3 billion has been pledged to the Fund.

Much as with President Park’s efforts to change perceptions of the impact of unification, Korea is making efforts to change perceptions internationally on the costs of addressing climate change. At the UN Summit, Park noted that “How we view the climate agenda — as boon or bane — will bring huge differences,” while noting the benefits that can come from developing new energy technologies. Korea also contributed intellectually to the debate on whether the costs of climate change would be a “boon or bane,” as President Park said, by being one of seven countries to commission a study through the Global Commission on the Economy and Climate that found that the benefits of improved health, better air quality, and lower fuel costs could potentially mitigate the costs of adjustment.

While Korea is a relatively new participant in the effort to address climate change, it has played an increasingly important role through its efforts to help better understand the challenges and to contribute to the development of policies which would support both a greener world and continued economic growth in developing countries. Additionally, by implementing its own ETS and investing in green technologies, Korea demonstrates to other developing nations that there are steps they can take to improve the environment without sacrificing economic growth.

Troy Stangarone is the Senior Director of Congressional Affairs and Trade at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from Rae Allen’s photostream on flickr Creative Commons.

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Economic Growth Since the Financial Crisis: Korea and the BRICs

By Troy Stangarone

Economic analysts are always trying to predict the next hot economy and coin a popular phrase to back up their claim. Perhaps one of the most successful was Goldman Sachs, which famously coined the term BRICs in 2001 to draw attention to the long-term economic potential of Brazil, Russia, China, and India among the emerging economies. Since 2001, the term has become part of the economic lexicon and even morphed into a loose political grouping which South Africa joined with the idea of playing the “s” in the grouping.

While Korea is more economically advanced than all of these economies, it might have been a logical answer for the “k” in brick and still makes for an interesting economic comparison. Not because these countries economic profiles are innately similar, but rather as a benchmark for how Korea has performed, especially since the Global Financial Crisis.

Korea also makes for an interesting comparison with the BRICs as it is an economy that they ideally want to emulate. As a recent article for Foreign Affairs, The Backwater That Boomed, notes Korea has grown at an average of 7 percent a year for the last half century and become a wealthy, technologically advanced nation, as well as one of Foreign Affairs “Six Markets to Watch.” In contrast, two of the BRICs — India and Brazil — recently made the latest, less flattering economic catch phrase, the Fragile Five. This latest phrase denotes countries that face an overreliance on foreign direct investment to drive growth at a time when investors are pulling funds out of developing economies as the Federal Reserve begins to taper the latest round of quantitative easing.

GDP Growth Rates for Korea and the BRICS since 2009

Korea and BRIC GDP Final

All data from World Bank except for 2013. 2013 data from IMF estimate or as reported in Yonhap News and Russia Today.

So, how have Korea and the BRICs performed over the last five years? Overall, China and India have had the strongest growth. However, India has begun to slow in recent years and is in need of further economic reforms. China’s economy has also slowed to a lesser extent as it begins to transition towards greater domestic consumption.

When the crisis hit the global economy in 2009, Korea, along with China and India, was able to avoid a recession. In contrast, Russia’s economy contracted by 7.8 percent and Brazil had a small recession. In the years since, Korea’s economic growth has surpassed Brazil in three out of the four years and Russia in two, including 2013 when it outperformed both.

While China and India have grown at significant rates in recent years, Korea has consistently grown at rates comparable to Russia and Brazil in this new post-crisis era. In the weeks ahead we will continue to look at how these five economies have performed over the last five years.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade at the Korea Economic Institute of America. The views expressed here are his own.

Photo from jonasginter’s photostream on flickr Creative Commons.

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Bridges of Understanding: The Peace Corps & The U.S. – Korea Alliance

By Gerard Krzic

Anyone visiting Korea and sightseeing at a rural Buddhist temple usually passes over a stone bridge that crosses a stream or river before entering the main temple grounds.  It has been said that the bridge represents crossing oceans as one moves from the land of daily hardships to the land of enlightenment and understanding.  Like these stone links between two lands, the alliance between the United States and the Republic of Korea has moved each country toward mutual understanding and cooperation across the Pacific Ocean.  This bridge of collaboration over the past 60 years has been built upon the interaction between the people of both countries.  One organization that has contributed to this strong bond is the United States Peace Corps.

Chonju MarketFrom 1966 to 1981, nearly 2,000 Peace Corps volunteers and staff members shared their lives with their Korean counterparts in health, education and social service projects.   They were witness to the tremendous work ethic of the Korean people as the groundwork was being laid for the Korea we see now in the 21st century.

Rick Laylin was a member of the first group of Peace Corps volunteers, known as “K-1,” who arrived in Korea in 1966 to answer President Kennedy’s call for Americans to give two years of their lives in service to the developing world.   Rick recalls Korea of that time: “Korea was still struggling to develop its unique identity in the aftermath of the Korean War and, especially in the countryside, 150 miles south of Seoul, seemed to border on the impoverished.”

Rick Laylin JeonjuRick’s first-year assignment was to teach English as a Foreign Language (TEFL) at The Boys High School in Jeonju, a city in the southwest part of the peninsula. In his second year, he was posted to Chonbuk National University to develop a TEFL training program for teachers from around the province.  Rick remembers entering that second year assignment:  “That second year was a totally different experience from the first year, and not nearly as frustrating as the first year since I now had a year’s worth of experience to draw upon. I made several new friends in the process, but still had the old friends as well, so it was doubly rewarding.”

In his two years there, Rick developed many friendships, aided by his first co-teacher, mentor and friend, Mr. Kim Jeong Seok.  Through Mr. Kim’s patient guidance and his own sensitivity to the Korean culture, manifested in a lot of non-verbal behavior such as bowing, handshaking, and smiling, Rick felt that he adjusted well in spite of the initial difficulty learning Korean. In particular, he felt the Korean people, in spite of the difficult living conditions, were welcoming and accommodating.

Rick Laylin MentorFast forward to October, 2009:  Rick found himself back in Korea 43 years after he had first arrived on the peninsula. This time he was there as a member of one of the Korean Revisits sponsored by the Korea Foundation for former Peace Corps Volunteers.   He visited his old schools in Jeonju and met with his old colleagues.  When asked to reflect on his time in Korea as a Peace Corps Volunteer, Rick reminisced that the Korean people were extremely hospitable, warm, friendly and above all, forgiving of his youthful ineptitude when it came to teaching.   He felt that his greatest contribution was not only the English teaching he provided but also the mutual understanding created through his presence in the town.  The Korean people could see that there were Americans who found great satisfaction living and working with them:  “I think that the message that they got from me was that I was genuinely happy to be there and working with their students to improve their English speaking skills, which could help them to get ahead in life.”

Nine years after Rick had completed his Peace Corps service, the 41st group of volunteers arrived in Korea in January of 1977.  I was fortunate to be a member of that group.   Having left the U.S. for Korea on my 24th birthday, I was about to embark on a journey that would transform my life.

YecheonAfter a three-month training program focusing on Korean language, culture and TEFL pedagogy.  I arrived at my site – Yecheon, a rural village in the northern part of  Gyeongsang Buk province.  Similar to Rick, I also taught English, but my assignment was in Dae Chang Boys Middle School.

At first, being immersed in a totally Korean-speaking environment without other native English speakers brought the usual adjustment difficulties and homesickness.  Mistakes in communication – using honorific forms inappropriately, failing to distinguish the differences in sound among certain Korean vowel and consonants – made me very aware of the process of learning a foreign language and appreciative of the struggles many of my students were having learning English.

However, over time and in large part due to the graciousness of my Korean colleagues and friends, my language skills improved and my cultural insights sharpened.  I learned of the importance of human relations (인간관계),  preserving the “kibun” (기분) of others,  and reading “nunji” (눈치).   As Rick had Mr. Kim for a mentor, I also was fortunate to benefit from my co-teacher, Mr. Kim Hee Kyeong, who guided me through my first year in Korea.  My second year was devoted to teacher training as well. I extended my service time for a third year and along with two other volunteers developed a mini-service corps of Korean college-aged students who provided volunteer services in exchange for English lessons.  The students thought of it as our own “mini”Peace Corps.

Calligraphy KrzicMy recollections of Korea were the simple experiences I shared with the people on a daily basis: going on the annual student trip to Gyeongju as a chaperone with over 300 students crammed into slow trains and small rooms in a traditional Korean inn (여관), sitting side-by-side with elementary and middle school students while learning Korean calligraphy, cracking the  ice that had formed in the water basins we had to use when washing up outside on frigid winter mornings, sharing taxis to race home before the nightly curfew (동행금지), seeing the joy of our rural students win prizes in the provincial English speech contests over their more advantaged urban peers, witnessing first hand the visible results of the economic development in the form of the early Hyundai car known as the Pony, sharing whispered and animated conversations with my Korean colleagues about domestic and international politics over pots of 막걸리 (makgeolli) or bottles of 소주 (soju).

In my post Peace Corps life, I have had the privilege to continue my learning of other cultures and interacting with professionals throughout the world in places as diverse as Palestine, Israel, Brazil, South Africa, the former Yugoslavia, and Hungary. Yet, I always look back upon my years in Korea as something special – the place where I learned about the world outside America’s borders.

Rick LaylinRick and I are not the only Peace Corps Volunteers who feel our service in Korea was the most transformative experience of our lives.  Many returned volunteers have gone on to distinguished careers in government service, education, non-profit agencies, and the private sector, largely in part due to their time in Korea.  And, although the Peace Corps presence in Korea ended in 1981, the alliances formed in the 15 years that the program was active has led to the creation of the “Friends of Korea”  (FOK).

Established by returned volunteers, FOK, in conjunction with Korean government agencies, has published “Through Our Eyes,” a book chronicling the Peace Corps experience in Korea, organized a traveling photo exhibit throughout Korea and the U.S., and discussed plans for a collection of the Peace Corps experience in the National Museum of Korean Contemporary History.  All these efforts are testaments to the continuing impact that Korea has had on their lives.

For those interested in joining or learning more about Friends of Korea, please visit our web site at http://www.friendsofkorea.net.

Gerard Krzic is a returned Peace Corps Volunteer Korea, 1977-1980 and member of the Friends of Korea Board. The views expressed here are the author’s alone.

All photos were provided by Gerard Krzic and were given  permission to be used for this post.

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North Korea’s Economic Diplomacy with Southeast Asia

By Sarah K. Yun

After the failed April 13 rocket launch, North Korea seemed to be headed towards increased isolation from the international community. The United Nations Security Council tightened the sanctions regime, while the United States canceled the 24,000 metric tons of food aid that had been part of the “Leap Day” Agreement. However, within just a few weeks there were signs of active economic diplomacy by North Korea. While Pyongyang’s diplomatic efforts with Southeast Asia and China are particularly visible, what are the implications of North Korea’s attempts to rekindle old relationships?

From May to August, North Korea began kicking its diplomatic outreach into high gear. In May, Kim Yong-nam, Chairman of the Presidium of the Supreme People’s Assembly, traveled to Indonesia and Singapore. While no official agreements resulted from the meetings in Singapore, Kim’s meetings with the Indonesian President Susilo Bambang Yudhoyono and Foreign Minister Marty Natalegawa resulted in cooperation in communications, information technology, and economic/trade issues, while increasing the exchange of visits between government officials and journalists. Additionally, on June 1 Indonesia agreed to send $2 million in aid to North Korea.

The following month Cambodian foreign minister Hor Namhong visited North Korea to discuss security issues and bolster bilateral ties, while Kim Yong-il, Secretary and Director of International Affairs of the Korea Workers Party, visited Laos, Vietnam and Myanmar. In return, Lao and Vietnamese government officials visited Pyongyang in July. Also in July, North Korea’s foreign minister Park Ui-chun visited Cambodia to participate in the ASEAN Regional Forum and engage in side meetings mostly focused on trade and investment.

From August 5 to 10, Kim Yong-nam visited Vietnam and Laos to try to yield concrete results from the previous trips. On August 6, President Truong Tan Sang of Vietnam said that the “Vietnam-DPRK relations of friendship will grow stronger in mutual interests amidst the deep concern of the top leaders of the two countries.” Vietnam agreed to donate 5,000 tons of rice to Pyongyang as aid towards North Korea’s recent heavy floods. In Laos, the two countries completed four cooperation agreements to include issues of cultural exchange, information and technology, economic cooperation, education and sports.

Despite the fluctuating trade volume between North Korea and Southeast Asia, what are the incentives for countries to engage with each other at the current juncture? For North Korea, there is a significant need to diversify its trading partners. According to South Korea’s Ministry of Unification, inter-Korean trade decreased from $1.9 billion in 2012 to $1.7 billion in 2011. Even then, the figures are largely dependent on the output from the Kaesong Industrial Complex. On the other hand, while estimates vary, North Korea has become increasingly dependent on trade with China where bilateral trade increased 62.4% from 2010 to 2011. With mounting pressure to diversify its trading partners, Southeast Asia is a viable candidate given its geographical proximity and economic growth. According to the IMF, Myanmar, Singapore, and Thailand were eighth, ninth and eleventh respectively as North Korea’s import partners. While Myanmar, Singapore and Thailand were North Korea’s tenth, fourteenth and fifteenth largest trading partners.

Additionally, there are many lessons that could be learned from the Southeast Asia’s development experience. Singapore could be a model for attracting foreign direct investment and managing special economic zones. As Vietnam’s economy grows, the country could provide an alternative model besides the Chinese development model. Indonesia could be a case study on natural resource management. For the purposes of information gathering and political control, North Korea could benefit from engaging with Laos, Myanmar and Thailand. There are also historical ties in Southeast Asia, which creates a less threatening relationship. Many Southeast Asian countries, such as Indonesia, the Philippines and Singapore, were involved in the Non-Aligned Movement, which influenced North Korea’s foreign policy framework after the Korean War.

Southeast Asia also identified opportunities in engaging with North Korea. As ASEAN tries to take a more active role in the regional security and economic structure, North Korea could become an example of ASEAN’s symbolic politics and global role to create an alternative space for engagement. With China’s continuing rise, North Korea’s diplomatic outreach also represents an opportunity for ASEAN to balance China’s growing role in the region to an extent. Indonesia, as the largest country in the region, may have a vested interest in playing an alternative mediator role, particularly on non-nuclear issues.

Beyond Southeast Asia, there have also been other internal and external developments which may hint at the prospect for further engagement and opening on the part of North Korea. It has been reported that on June 28 Kim Jong-un announced a new development plan which includes the downscaling of work units in cooperative farms, allowing increased autonomy to enterprises and factories, and transferring economic projects from the military to the cabinet. In August, North Korea sent a 50 person delegation to China, including Jang Sung-taek, vice chairman of the National Defense Commission. During the summit, the two sides agreed to actively develop the Rason special economic zone and the Hwanggumpyong/Wihwa Island economic zone. Moreover, North Korea and Japan will hold high-level talks to discuss various issues including the abductee issue.

To be sure, indications of reform should be measured with the realities of North Korea. The Kim Jong-un regime will still want to maintain a considerable amount of market control to balance external engagement. The execution and level of genuine reform, including labor market reform, still remains untested. Furthermore, the Kim regime would have to resolve the inherent conflict between the legacy of juche ideology vis-à-vis reforms and opening to the outside world.

Although many are observing North Korea’s growing diplomatic efforts in the Asia Pacific with much interest, it is too early to assess true reform. However, this could serve as an opportunity for the United States, South Korea and their friends. By introducing non-traditional players such as Indonesia, Vietnam, and Singapore, North Korea’s interests and trading partners could be diversified. This could create additional entry points into the new Kim regime. This model might hold the potential to be employed on projects in developing industries in North Korea, such as technology, communication, infrastructure, education, and culture/entertainment. These efforts could potentially de-couple the technocrats from the Kim royal family. In response to North Korea’s increasing relationship with their northern neighbor, China could serve as a platform for small and medium enterprises to invest in the northeastern provinces to build greater ties with North Korea. Such projects would take place in anticipation of Rason’s rapid development.

Cooperation between the United States, South Korea, Southeast Asia, as well as China, could induce North Korea to undertake economic reform and ultimately reduce tension. On one hand, the changing circumstances in North Korea mean that the U.S. and South Korea’s close coordination is crucial in understanding internal debates and foreign policy developments within the Kim regime. On the other hand, changing the current dynamic in the region with new players and creating incentives for economic development could induce change in the North Korean society.

Sarah K. Yun is the Director of Public Affairs and Regional Issues for the Korea Economic Institute. The views expressed here are her own.

Photo from Mac Coates photo stream on flickr Creative Commons.

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About The Peninsula

The Peninsula blog is a project of the Korea Economic Institute. It is designed to provide a wide ranging forum for discussion of the foreign policy, economic, and social issues that impact the Korean peninsula. The views expressed on The Peninsula are those of the authors alone, and should not be taken to represent the views of either the editors or the Korea Economic Institute. For questions, comments, or to submit a post to The Peninsula, please contact us at ts@keia.org.