This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• President Moon rejected the option of lifting development restrictions on greenbelt zones to resolve housing supply shortages in Seoul and other densely populated cities.
• There is a lack of consensus within the ruling Democratic Party on the deregulation of these protected green areas where the construction of housing is not permitted.
• This administration’s decision came after a recent poll showed that 60 percent of South Koreans disapprove of building more homes on the greenbelt to stabilize the real estate market.

Implications: The public’s antipathy towards housing development in protected green areas revealed eroding confidence in the government’s commitment to consistent housing policy. While adversarial polls reflect some community’s desire to preserve the environment, they also highlight dissatisfaction at what people see as an inadequately-considered approach to housing. Ironically, the government’s reversal on green zone development may exacerbate this distrust as it took merely a week for the administration to consider and then walk back on this policy.

Context: In an effort to curb property speculation, the government recently announced it would supply new homes in Seoul and its surrounding areas by easing construction rules and making more land available. Rather than developing greenbelt zones, the administration decided to look for alternative options such as national and public facility sites as possible housing sites. In a separate move, Moon instructed for residential development to take place in a military country club located in Seoul.

Korea View was edited by Yong Kwon with the help of James Constant, Sophie Joo, Sonia Kim, and Chris Lee.

Picture by Hikaru arai from Wikimedia Commons

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• The Blue House confirmed that a “Green New Deal” would be a component of a Korean New Deal that President Moon announced on May 10.
• This confirmation followed urging from the environmental group Greenpeace for Moon to set a positive example for combating climate change as South Korea addresses the economic downturn caused by the pandemic.
• The Moon government has already pledged to implement a nation-wide emissions cap and put Korea on a path to becoming a zero-emissions country by 2050.

Implications: South Korea’s current environmental policy aims are emerging out of foundations laid by economic initiatives of previous administrations. Although Presidents Park Geun-hye and Lee Myung-bak advanced “green” plans that were primarily aimed at boosting economic growth, their initiatives ensured that the government’s pro-environment posture would be closely associated with economic growth. Moreover, it cultivated stakeholders who would push the government to do more to reduce the country’s carbon emissions. Moon Jae-in’s ongoing efforts are further helped by the widespread recognition that increased public investment is vital to the post-COVID economic recovery.

Context: In his 2008 inauguration speech, President Lee Myung-bak highlighted his vision of employing green technology to overcome the ongoing global financial crisis. During the Park Geun-hye administration, the government continued to promote green technology as a vehicle to boost the economy. During this period, the Korea Electric Power Corporation advanced an initiative to improve the country’s energy efficiency by integrating smart technology into the electricity grid. The investment in smart electrical grid helped set the stage for additional investments in renewable energy sources including solar energy, energy storage, and electron volt chargers.

Korea View was edited by Yong Kwon with the help of Gordon Henning, Soojin Hwang, Hyungim Jang, and Ingyeong Park.

Picture from flickr account of Republic of Korea

By Emanuel Pastreich

The difficulties in promoting cooperation between Seoul, Tokyo, and Washington, D.C. in response to the rising technological and economic strength of China has been the hot topic of discussion in the United States. The standard answer is to attribute the difficulties to historical issues that have created an emotional gap between these two allies of the United States.

Although the resentment of Koreans regarding the events of the pre-war period are real, and they do occasionally create major obstacles, it is far from certain that they are the primary cause of the divergent views. It is entirely natural that South Korea, Japan, and the United States have divergent geopolitical interests. It is also clear that all three countries are riven domestically by ideological schisms that make a “NATO of Asia” difficult, if not impossible.

The push for collaboration has focused largely on military and security, with China postulated as a potential threat that must be countered through deterrence. Although this perspective has become commonplace in Washington, D.C., it is far from the consensus among experts on security in the United States, let alone in South Korea and Japan. If anything, concerns about nuclear war, climate change, the unprecedented concentration of wealth, and the negative impact of artificial intelligence and automation on human society dwarf any security threat from China, or from North Korea.

Thus, it is no surprise that there is no consensus on forging deeper military ties centered on potential threats from North Korea and China in the three countries.

In addition, we must ask ourselves whether future conflicts will follow familiar patterns. The rapid evolution of new technologies, from 3D printing to micro drones, to next-generation artificial intelligence assures us of a future in which powerful destructive tools will be available to small groups at the same time that internet-based links bring together similar groups around the world for like purposes. Such developments could make many current weapons systems obsolete from the start.

Technological change has also encouraged deep fragmentation within nation-states, at home and abroad.  Simply raising military budgets, or preaching about our alliances, is not going to make us safer. We need to understand the nature of emerging threats that go beyond the schemata we have used previously to define security, and make sure that citizens in all three countries are properly informed.

Whether we are talking about preventing nuclear war, climate catastrophe, or hybrid conflicts at the national, regional and international levels, we need to use our creativity.

Cooperation between the United States, South Korea, and Japan in the security realm, either traditional or non-traditional, can be extremely positive, but it must be the result of a rigorous and robust discussion between the three countries on science, technology, the environment, policy and strategy as well. That discussion will not only assure us that we are spending the tax dollars of citizens on responses to security threats that are up to date and effective, but will also create a broad consensus among the citizens and experts involved in this discussion at every level that will help to avoid misunderstandings in the future.

The economic and technological integration between these three nations is considerable and offers paths for effective cooperation to address emerging challenges.

Rather than force through military-military cooperation which does not grow naturally out of a broader discussion, the three countries need to broaden and deepen cooperation in fields that deeply inform security, but which are not strictly military.

Education

There is tremendous potential for cooperation in education between the United States, South Korea, and Japan which should be pursued in a systematic manner. For example, we can create sister relations between elementary schools, middle schools and high schools at the local level in all three countries that will be the foundations for deep exchanges. Internet-based learning can serve as an opportunity for students in the three countries to meet up with each other on-line, engage in common projects and learn about each other’s neighborhoods, regions and countries.

If those exchanges are carried on long-term, they may evolve into lifetime relationships that will bring the three countries together.

Whether it is American, Korean and Japanese first-graders making presentations about their neighborhoods for each other, or community college students discussing with their peers how we should respond to the threat of nuclear war or the fragmentation of society, these opportunities for direct collaboration in education would be immensely valuable in building lasting ties.

Science

We cannot discuss the future of security unless our discussion is grounded in science. We must encourage the use of the scientific method in all three countries at every level, from discussions among friends up to the formulation of national policy.

Towards this end, we must promote long-term collaboration in scientific research between the three countries which is combined with a broader effort to promote scientific thinking in society as a whole.

There are projects in scientific research that involve researchers in the three nations already, as well as other nations. It would be possible to focus government funding on collaborative research between the three countries for long-term research projects on critical issues that would tie the three together in a stable and predictable manner and promote broader cooperation.

The joint research in biology and bioengineering between Professor Heiwan Lee of Hanyang University and Hara Masahiko of RIKEN that was active from 2010 to 2016 is a model for how joint collaboration can be conducted between Japan and South Korea. Bringing in an American institutional partner to that project would have made it even stronger.

But science is not just about research. It is critical that we invest heavily in increasing the understanding of science among citizens in the three countries and international cooperation in civic education is another critical field. Town Hall forums that encourage a scientific analysis of the challenges facing human society can be planned that link together citizens from the three countries and that provide, through translation, opportunities for deeper exchanges. Shared best practices between the United States, South Korea, and Japan, for example, could be valuable.

Technology and policy

Existing networks for cooperation for the development of technology and for the formulation of policy between the three countries can be enhanced and brought to focus on the needs of society, rather than financial profit.

For example, the development of the technology for next-generation electric batteries, solar cells, or wind-powered generators that will be in the public domain could be undertaken by the three countries. So also, programs for the development of new policies to implement those resilient technologies at the local level could be developed through cooperation between the three countries. The sharing of best practices could be done in the form of sister city/sister state relations, thereby encouraging collaboration between citizens.

The arts and the humanities

Cooperation in the performing arts, film, painting, sculpture, and writing could be a critical means of drawing the three countries together and creating a consensus on current issues. What we think about security in the United States, South Korea, and Japan will be determined by how “security” is represented and discussed. Security is ultimately a cultural, and not a technological, issue. Therefore the humanities are not secondary fields to policy and technology, but rather they are the front line where philosophy, morality, and methods of representation intersect.

The three countries can cooperate in making films that address the concerns of youth, the threat of climate change, the growing inequity in our society and numerous other topics. Providing reliable funding for such efforts can help artists and intellectuals from the three countries to join forces in efforts to create works of art that help citizens to conceive of current threats like climate change and nuclear war and that offer new directions for international collaboration between citizens for security.

Cultural exchanges can do much to deepen current discussions between the three countries. If we include creative activities like writing and music into otherwise dry and formalized discussions about security and trade, we can create an environment in which innovative approaches are possible and a more honest debate conceivable.

I have attended many meetings between high-level figures from government, industry, and research in which the conversation never went beyond the most superficial greetings. Such overly formalized meetings are tremendous loss because often the experts assembled represented a treasure of expertise.

Just having a chance to listen to a musical performance together, or create a work of art together, can transform such meetings into something remarkably positive. The arts and humanities can contribute not only to helping citizens to understand the challenges of our age, but also in facilitating a discourse between policymakers that goes beyond the rituals of state and gives real gravitas to the exchange.

Conclusion

The goal of enhancing cooperation between the United States, South Korea and Japan in the field of security is worthy. Achieving that goal will be a complex process. Identifying what exactly security will mean in the 21^st century, and how we can cooperate in our response is a task that will require the three countries to cooperate closely at all levels, from kindergarten to advanced research laboratories, for the long term. Before we start signing any narrow military and intelligence agreements, let us make sure that we have worked together closely as citizens, experts and policy makers to understand scientifically the current challenges and to respond in a constructive and effective manner.

Emanuel Pastreich is the President of The Asia Institute and a Non-Resident Fellow at the Korea Economic Institute. The views expressed here are his own. 

Image from the U.S. State Department flickr account.

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• Earlier this month, South Korea announced new efforts to help combat the country’s worsening fine dust problem.
• Measures include restrictions on private vehicle usage, reduced work hours at construction sites, and even the declaration of temporary holidays when the dust reaches a “serious” level.
• Last week Seoul, Incheon, and the surrounding Gyeonggi Province were hit by the first dust wave of the season.

Implications: Since South Korea has yet to identify the source of the fine dust particles, some observers have asked whether the ongoing measures are effectively targeting the problem. The government deployed 700 vehicles to clear the streets of dust and have been actively prohibiting the operation of diesel vehicles in cities with more than 500,000 people. While some of the dust is generated by pollution in South Korea, it is also believed that some particles come from the Gobi desert in Mongolia and China, and some researchers have said 50-60% of the dust is air pollution from China blown across the Yellow Sea. The government has implemented several domestic procedures but has taken minimal steps in coordinating with China.

Context: Regardless of its origin, air pollution is causing massive health and economic consequences for the country. Of the top 100 most polluted cities in OECD countries, 44 were in South Korea, and in 2017, 17,300 deaths were attributed to air pollution. Furthermore, the new protocol of declaring temporary holidays may dampen businesses’ output due to lost work hours. The dust also poses significant financial concerns for residents. An effective, single-use air filtration mask can cost up to 20,000 won (~$17), which can quickly add up to substantial expense for South Koreans.

Korea View was edited by Yong Kwon with the help of Soojin Hwang, Hyoshin Kim, and Rachel Kirsch.

Picture from user taylorandayumi on flickr

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• At the UN Climate Action Summit in New York, President Moon announced his plan to double Seoul’s funding of the Green Climate Fund and host an international climate summit in South Korea.
• The government’s recently released data showed that greenhouse gas emissions reached a record high in 2017.
• South Korea’s coal consumption increased by 2.4% in 2018, the only country to do so among OECD members.

Implications: While President Moon’s pledge at the UN was consistent with his broader effort to reduce South Korea’s carbon emissions, Seoul faces the challenge of building a greener economy without nuclear power or whole-hearted private sector support. As a result of Moon’s domestic pledge to phase out nuclear energy, the Korean utility operators had no choice but to rely more heavily on coal and LNG in the past two years.

Meanwhile, South Korean firms like Doosan, Samsung, and Hyundai have won lucrative bids to build coal-fired plants in Southeast Asia. In fact, South Korea is the second-largest investor in the global coal-financing market. These realities hold up Korea’s push to become a principal player in the struggle against climate change.

Context: Following the 2011 nuclear accident at Fukushima, activists began calling on the government to phase out nuclear power plants from South Korea. A 2012 scandal that revealed flaws in these plants’ safety protocols further exacerbated public anxiety around nuclear energy. Finally, a series of small earthquakes in 2016 reintroduced fears that an analogous accident to Fukushima could occur in South Korea. Cognizant of this pushback, the government pivoted its investment focus to renewable energy – but this is not expected to substitute coal output in the near future.

Korea View was edited by Yong Kwon with the help of Soojin Hwang, Hyoshin Kim, and Rachel Kirsch.

Picture from IAEA’s flickr account

By Yong Kwon

Earlier this month, a wildfire burned over 1300 acres of forest, farmland, and homes in northeastern Gangwon province. Seasonal winds helped spread the fire and a bigger crisis appears to have been averted by the government’s rapid deployment of personnel and resources. Simultaneously, the response also revealed serious vulnerabilities in Korea’s disaster preparedness. As climate change raises the risk of fires going forward, how the Korean government improves its emergency response will serve as a gauge for state capacity under the Moon administration.

This is not the first time that Gangwon province confronted wildfires. Seasonal gusts that travel along the coastline of the East Sea are prone to picking up any small spark and starting fires. It also does not help that pines make up 22% of the trees in Gangwon province, which are more flammable than other plant species. In 2000, nearly 58,000 acres of forest were lost after a devastating forest fire. With the Korean Peninsula becoming warmer, evidenced by recent droughts, these wildfires may occur more frequently.

Consistent investment in firefighters, stemming from the previous administration’s allocation of proceeds from cigarette tax to disaster preparedness, undoubtedly contributed to enhancing the speed and effectiveness of the response to this year’s fire. However, more resources could have been dedicated to both personnel and hardware.

Of the 10,000 people deployed to fight the fire, the most dangerous task went to “special units” that were deployed to areas where fire trucks could not reach. Investigative journalists discovered that many of these special firefighters were in fact irregular employees with wages that are around $100 a day with 6-month contracts.

There were also equipment shortcomings. South Korea has a fleet of approximately 160 helicopters capable of fighting wildfires, but only a fraction of them were able to take off in the seasonal gusts, which often exceeded 60 feet/second. Even fewer could take on missions at night under these conditions. This seriously hampered the firefighting efforts.

There were also deficiencies in the alert system. Many elderly residents were not made aware of the televised alert because they had gone to bed early. In some rural areas, local sirens were not loud enough to alert residents. Meanwhile, major domestic television networks KBS, MBC, and SBS failed to provide sign language interpretation for the emergency broadcast when the fire first began, delaying the evacuation of differently abled citizens.

Taking into account these shortcomings, the human cost was arguably low (1 dead and 10 injured). To ensure that lives are not left to chance in the next unexpected crisis, the government is rightly bolstering state capacity in disaster response.

The government has already promised to dedicate more resources to regularize and increase personnel in the special unit of firefighters. In the short term, administrators can pull resources from the supplemental budget that will be introduced to the National Assembly later this month. Long-term funding solutions that go beyond the cigarette tax will need to be developed.

In addition, the Korean government is considering replanting the devastated mountain sides with trees with lower resin output to deter the spread of future fires. More personnel will also be dedicated to track and assist with the evacuation of the elderly and the differently-abled.

And as other parts of the world also struggle to cope with the effects of climate change, the Korean government may also invest resources to research best practices from other countries.

How quickly the government is able to adopt these changes and effectively deploy these news assets in future fires will be a good representation of state capacity under the Moon administration. In fact, it could be a very respectable legacy for the president.

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

Photo from JLS Photography – Alaska’s photostream on flickr Creative Commons.

By Mark Tokola, Phil Eskeland, Troy Stangarone, Kyle Ferrier, Juni Kim, Yong Kwon, and Sang Kim

2018 was a year of dramatic change on the Korean Peninsula. The prospect of war that seemed to growth with each North Korean nuclear or missile test receded as North Korea, the United States, and South Korea moved towards diplomacy which culminated in the historic summit meeting between U.S. President Donald Trump and North Korean Chairman Kim Jong-un in Singapore.

While the move towards diplomacy with North Korea was the top story of 2018, the year also saw South Korea successfully host the 2018 Winter Olympics, South Korean President Moon Jae-in move more directly towards implementing his income lead growth strategy, and K-pop take another significant step towards breaking out in the United States.

As we move into 2019, some of the big questions facing the Korean Peninsula will center around whether real progress can be made with North Korea now that we are beyond the initial stages of diplomacy and what that means for inter-Korean relations. Other key issues for 2019 will be how the U.S.-China trade war plays out and the implications for South Korea, as well as whether income lead growth will be able to overcome some of the initial implementation challenges it has faced.

With that in mind, here are 10 issues related to North Korea, South Korean politics, and U.S.-Korea relations to follow that will have an impact on the Korean peninsula in the year ahead:

Whether a Peace Process Can Develop

It is generally believed that the denuclearization of North Korea will be accompanied by a “peace process” (or peace regime, or peace declaration, or end-of-war declaration – there are many terms being tossed around) but what this would actually mean or whether it would come before or after an agreement on denuclearization is unclear.  The “peace process” may come in pieces.  There is nothing to prevent North and South Korea from declaring on their own that peace has come to the peninsula.  Similarly, the United States and North Korea could issue a joint statement saying that have no hostile intent towards one another.  If such statements can promote denuclearization or decrease tensions, well and good.  The devilish details would be in what concrete steps if any would accompany a declaration of peace.

2019 may well see announcements of peace on the Korean Peninsula.  It would seem like an irresistible flourish to mark Kim Jong-un’s visit to Seoul, or to give an appearance of progress for a second Trump-Kim Summit.  But, watch for the details.  Would a declaration of peace be accompanied by a road map towards denuclearization? A normalization of relations with liaison offices being established in Washington and Pyongyang?  A more wide-ranging commitment by North Korea to restrain its belligerent behavior beyond denuclearization, such as in cyber or other weapons systems?  Would there be a move towards formally ending the Korean War by winding up the armistice? Thinking through what a peace process would mean reveals that there are big issues beyond denuclearization.

Will the United States Lift Sanctions on North Korea?

In his New Year’s Day address, Kim Jong-un called for the United States to lift sanctions if it wants the process of dismantling North Korea’s nuclear weapons to go forward. In the past, the Trump administration has said that North Korea would have to dismantle or substantially dismantle its weapons programs before sanctions relief would be possible. With progress with North Korea stalled, one of the key questions for the Trump administration will be whether it sticks to its stance or accommodates North Korea’s push for sanctions relief.

If the Trump administration decided to move forward on sanctions relief there are four general ways it could look to pursue to move the talks forward and demonstrate good faith. The first area would be to support inter-Korean engagement. Here the administration could support further sanctions waivers to allow inter-Korean economic projects to advance. At the United Nations, the administration could support removing one or more specific sanctions that have been placed on North Korea. Another, more likely option at the UN, would be for the administration to pursue time-limited waivers of sanctions that are contingent on progress by North Korea in dismantling its nuclear programs. The final option would be for the administration to waive one or more specific U.S. sanctions where it has the authority to provide a national interest waiver.

Burden Sharing and the U.S.-Korea Military Relationship

As part of his professed “America First” values, U.S. President Donald Trump has repeatedly criticized South Korea, and other U.S. allies, for what he views as an unfair defense burden to America for stationing U.S. troops. The U.S. has maintained a military presence in South Korea since the Korean War in the 1950s and South Korea currently hosts 28,500 American troops, the third largest number of troops stationed in a foreign country after Japan and Germany. Ten rounds of negotiations occurred throughout 2018 between U.S. and South Korean officials to renew the Special Measures Agreement, a 2014 burden sharing deal that is set to expire at the end of 2018. The latest round failed to reach a deal over demands from the U.S. for South Korea to greatly increase its contribution and has prompted fresh concerns over the U.S.’s commitment to the alliance. Without a new deal in place, Korean workers at U.S. military bases in South Korea are in danger of being put on leave in the New Year. If left unresolved, the ongoing debate over cost-sharing could greatly hinder future U.S.-ROK relations.

The Future of THAAD in South Korea

China’s protest of the deployment of Terminal High Altitude Area Defense (THAAD) batteries, which were provided by the U.S. military, in South Korea in 2017 led to a political and economic row between the two countries. A resulting Chinese ban on tourism to South Korea and South Korean goods eventually gave way to an agreement late last year to normalize trade relations. Although trade and tourism numbers have started to rebound in 2018 after dramatic decreases in 2017, negative repercussions still remain, though the exact cost of the sanctions are hard to definitively quantify South Korea has likely lost more than $13 billion from the decline in tourism alone. In particular, the Korean conglomerate Lotte, which provided the land for THAAD deployment, has suffered from the after-effects of China’s sanctions with its stores in China shuttering due to lost business.

For 2019, it will be worth watching if the numbers continue to recover and how South Korean businesses adapt to the potential risks of dealing with a volatile Chinese market. For Lotte’s part, the company has actively courted Southeast Asian markets to make up for Chinese losses. It will also be worth watching if THAAD becomes part of talks with North Korea or the expected results of a South Korean environmental impact study affect its deployment.

U.S.-Korea Trade Relations – Section 232 Investigation

The past year has seen great progress in ameliorating initial uncertainties:  exports of U.S. goods and services to Korea increased 10 percent; the bilateral trade deficit declined by 43 percent; and agreements were reached and ratified to modify the Korea-U.S. Free Trade Agreement (KORUS FTA) and to limit Korean steel exports to the United States.

Nonetheless, there is still one looming threat – the possible imposition of U.S. tariffs as high as 25 percent on imported motor vehicles and parts from South Korea.  The Commerce Department has until February 17, 2019, to release the results of its Section 232 investigation into the national security implications of imported autos and parts.  If the report concludes that these products are a threat to U.S. national security, the President has until May 17, 2019, to make a final decision on tariffs.  However, because Korea and the U.S. concluded their negotiations on KORUS and steel two months before the Commerce Department launched this investigation, other major auto producers – Canada, Mexico, Japan, and the European Union – received reprieves or waivers on higher tariffs during their trade talks with the United States.  No decision has yet been made to exempt South Korea from higher tariffs even though Korea imposes zero tariffs on motor vehicles imported from the United States; the revisions to KORUS made several changes benefiting U.S. automakers, including a 20-year extension of the 25 percent U.S. tariff on imported pick-up trucks; and the value of U.S. imports of motor vehicles and parts from Korea has steadily declined since 2015.  Imposing a 25 percent tariff on imported cars and parts would also add approximately 10 percent to the production cost of Korean name-plated cars assembled in Georgia and Alabama, making their vehicles less affordable to the American public, resulting in a significant reduction in employment at both their manufacturing facilities and their dealerships.

Compounding the issue is the frustration that President Trump expressed on November 28^th regarding the recent announcement of the closure of four GM plants in the U.S. that make auto parts and smaller vehicles.  The President tweeted, “the countries that send us cars have taken advantage of the U.S. for decades,” reflecting a fundamental worldview that he has believed for over 30 years.  Trump added, “if we [imposed a 25 percent tariff on] cars coming in, many more cars would be built here.”  Because Korea still exports some cars to the U.S. that compete against GM, the threat of a higher tariff could be used to pressure Korean car manufacturers to move even more production to the United States.  President Trump also desires that Korea pay much more to continue stationing U.S. troops on the Korean peninsula.  He could use the threat of higher car tariffs as another pressure point on South Korea.  Unless Korea is granted an exemption on the auto tariffs, much of the goodwill in the bilateral trade relationship that has been generated over the past year will quickly dissipate because it will be perceived as bad faith in terms of moving the goalposts in bilateral trade negotiations.

The U.S.-China Trade Conflict

On the surface, tension in U.S.-China trade relations does not appear to affect South Korea too much because South Korea’s economy is more aligned with the United States.  However, because China is now Korea’s largest trading partner, South Korea could be caught in the undertow of the churn in U.S.-China friction.  Some Korean brand consumer electronic products are assembled in China and subsequently exported to the United States, which now has to be re-thought in light of the threat of U.S. tariffs as high as 25 percent on Chinese exports.  Other products assembled in China also contain significant Korean content.  For example, the screen on the new Apple iPhone XS is made by either Samsung or LG.  The Korean stock market frequently gyrates at any movement in U.S.-China trade talks – up when negotiations progress and down when discussions stall.  The two sides have given themselves until March 1, 2019, to conclude a successful agreement.

However, many of the irritants in the U.S.-China trade relationship are deep and foundational problems to the Chinese economy and most likely cannot be cured in less than three months.  If an agreement is reached that just makes marginal changes on the edges, such as a commitment by China to purchase more U.S. products or lowering the tariff on imported autos, then the U.S., and by extension, Korea, will continue to face long-term economic challenges from China.  If the U.S. acts in concert with other nations that have similar concerns about unfair and trade-illegal Chinese practices, then multilateral action can spark necessary reform to China’s economy.  However, if the talks break down and the U.S. continues to act alone by imposing more and more tariffs irrespective of how it affects constituencies in the U.S. or other nations like Korea, China will ironically gain the moral high ground as the defender of free trade and unnecessarily delay the market-oriented changes the free world needs to see take place in China.

U.S.-Korea Cooperation in the Indo-Pacific

The “Free and Open Indo-Pacific Strategy,” first introduced over a year ago, now underlies Washington’s approach to the region. South Korea has yet to officially join the strategy nor is it likely to in 2019 due to concerns in Seoul that it could be interpreted as “containing” China or even forcing its hand to choose between Beijing and Washington. However, the overlapping goals between the Indo-Pacific Strategy and the Moon administration’s “New Southern Policy” provide new opportunities for both the U.S. and South Korea to work together beyond the Peninsula.

Both visions focus on increasing engagement with South and Southeast Asia on many of the same key issues based on the same core values, albeit in different ways. The clearest means to bridge the two is through infrastructure projects. The U.S. is looking to mobilize large, high-standard loans and the quality and cooperative nature of South Korean loans, Seoul’s efforts to direct more development assistance to ASEAN countries and India, and the competitiveness of Korean firms in building modern infrastructure make South Korea an ideal partner in achieving this goal. In 2019, look for Seoul and Washington to cooperate on infrastructure projects in the region as well as highlight their joint efforts.

Improving the Environment in South Korea

Although air pollution arose as an issue during the 2017 presidential election, leading candidates at the time focused largely on expanding dialogue with China and remained quiet on domestic sources of this public health threat. The issue returned with a vengeance this past November when extreme levels of ultrafine dust forced Seoul to restrict the number of vehicles on the road and construction. This comes at a particularly awkward time for the Moon administration, which responded to public concerns following the 2011 Fukushima Daiichi disaster by promising to phase out nuclear power in Korea.

Absent nuclear power, cleaner energy could be drawn from natural gas, which South Korea has been importing in increasing amount – particularly from the United States. However, this exposes Korea to geopolitical issues and market volatility. The Moon government is also making a big push to increase renewable energy capacity.

At this juncture, South Korea may consider looking to Taiwan – voters there rejected the phase-out policy in a referendum this year. With nuclear energy satisfying both clean air and energy security, this issue is poised to be revisited by both the government and the public in 2019.

South Korea’s Income Lead Growth/Job Creation

The state of the economy remains the biggest source of concern for South Koreans. After taking several months to get up and running, the first full year of the Moon administration’s income-led growth agenda has fallen short of its ambitious goals. Responding to his falling approval rating in light of underwhelming initial results that have increasingly become a major issue of public debate, President Moon has devoted more government resources to his economic agenda this year. However, the key question for 2019 is will this be enough to win back public support and reinvigorate the economy?

Moon’s income-led growth strategy is a novel approach to resolving the stubborn structural issues in the economy, but this also means it is largely unproven. The IMF and OECD support the agenda’s increased social spending, particularly given the government’s fiscal space, but these policies must also start creating jobs and bolstering growth to be sustainable. Even if the agenda is on the right path, the window to push it through may be closing. More interest rate hikes by the Federal Reserve and the prospect of worsening trade tensions between China and the U.S., both of which have already impacted the economy, could make it harder for Moon’s agenda to find more success this year.

The #MeToo Movement and Women’s Right 

Heightened advocacy for women’s rights was a global trend in 2018. In South Korea, the #MeToo movement gained momentum with women stepping forward with allegations of sexual harassment and violence against high-profile figures, including presidential-hopeful Ahn Hee-jung, poet Ko Un, and award-winning movie director Kim Ki-duk. However, advocates faced obstacles ranging from a relatively lenient legal code to deeply-entrenched social attitudes. Providing further proof of the current society’s antipathy to women’s concerns, the brave actions of women who came out publicly with testimonies of abuse – despite receiving international attention – resulted in very few prosecutions.

Korean women last year also confronted a proliferation of hidden cameras, which prompted protests demanding stronger punishment for trafficking of digital material that was filmed without consent. In response, the government has so-far announced tougher punishments for trafficking of these materials and announced plans to better police online sex crimes and remove illegal footage from the internet more swiftly. These will go hand-in-hand with broader protections such as extensions to the statute of limitations in sexual abuse cases and measures that would allow victims of harassment and abuse to report these crimes anonymously.

Notwithstanding, many advocates recognize that strengthening the legal system is a necessary but insufficient means to achieve true social change. With many women’s rights organizations now mobilized in the wake of the scandals in 2018, open debates about how cultural attitudes will be reformed will likely intensify in 2019.

Bonus Issue: Will Kim Jong-un Go to Seoul?

At their summit meeting in Pyongyang, Kim Jong-un agreed to Moon Jae-in’s proposal that he visit Seoul before 2018 ended. Kim never took that trip, but in his recent letter to Moon he expressed a desire to meet with Moon frequently in 2019 and “a strong determination to visit Seoul while watching future situation.” Whether Kim makes that trip will be one issue that many will be watching in 2019.

It is not surprising that Kim did not meet with Moon in Seoul in 2018. With progress in talks with the United States stalled and his meeting with Trump postponed until early 2019, there would have been little that Kim could have achieved in Seoul. Any trip to Seoul in 2019 will likely be dependent on how Kim’s next meeting with Trump goes and whether there is any historical progress Kim can make in Seoul. He will likely want to achieve more that than act of a North Korean leader visiting Seoul for the trip to go forward.

Beyond whether Kim will visit Seoul will be the question of how his visit is received. At the moment, Kim’s image has improved in South Korea with the current diplomacy and 60 percent of South Koreans would have supported the trip if he had taken it in December. One issue to watch from any visit will be whether it builds support for inter-Korean ties among South Koreans or causes them to reassess the current opening with North Korea?

Mark Tokola is the Vice President of the Korea Economic Institute of America, Phil Eskeland is the Executive Director of Operations and Policy, Troy Stangarone is the Senior Director for Congressional Affairs and Trade, Yong Kwon is the Director of Communications, Kyle Ferrier is the Director of Academic Affairs and Research, Sang Kim is the Director of Public Affairs and Intern Coordinator, and Juni Kim is the Program Manager and Executive Assistant. The views expressed here are the authors’ alone.

Image created by Juni Kim.

By Troy Stangarone

Since the first summit meeting between South Korean President Moon Jae-in and North Korean Chairman Kim Jong-un in April, efforts by North and South Korea to repair and reconnect road and rail lines on the Korean Peninsula have received significant attention, including the recent announcement that they will be holding a groundbreaking ceremony on December 26. In contrast, South Korean efforts to aid North Korea with reforestation have received relatively less attention.

While the road and rail projects may have a clear impact in enhancing economic activity in North Korea by improving the ability to move goods from factories and farms to market, the work to restore North Korean forests will also play an increasingly important role in the country’s economic recovery.

Since economic hardships began in the 1990s, North Korea has seen its forest cover decline. From 1980 to 2000, forest cover in North Korea is estimated to have declined from 9,171,700 hectares to 7,085,800 hectares. After 2000, estimates are less clear. According to the World Bank deforestation has continued, as North Korea’s forest cover has dropped from 68 percent of the country to only 42 percent in 2015.  However, according to Global Forest Watch, forest cover declined by another 198,000 hectares, or 3.8 percent since 2000, and now covers only 33 percent of the country. While only 34 percent of the United States is covered by forests, 65 percent of South Korea is forested today.

While the estimates of the extent of deforestation vary, work by the United Nations has concluded that there is a linear relationship to increasing flood vulnerability in North Korea and deforestation. That link between deforestation and flooding has economic consequences for North Korea. Increased deforestation and flooding contribute to soil erosion and reduced agricultural production. It also can lead to water loss which reduces the efficiency of hydroelectric power, a key source of power generation in North Korea.

Increased flooding also has a human toll. In 2016, the UN and International Red Cross reported that 133 people died and tens of thousands were displaced in North Korea by flooding from Typhoon Lionrock. Beyond the immediate human toll, homes and crops were destroyed by the flooding. In a nation chronically short of food, taking steps to reduce the destructive force of flooding will have positive effects on nutrition and economic growth.

Restoring North Korea’s forests will be a long-term process. South Korea began the process of restoring its forests in the 1960s, but today those forests are estimated to be worth 10 percent of South Korea’s GDP.

To date inter-Korean cooperation has focused on discussions around developing a cooperation plan that does not violate sanctions and deals with issues such as pest control, the modernization of North Korea’s tree farms, and technological exchange. The first significant step took place in late November when South Korea sent 50 tons of non-sanctioned pesticides to North Korea to fight pine tree diseases. In the long-run, North Korea will need South Korean and international expertise to develop a sustainable reforestation plan.

Should international sanctions become an obstacle to work on reforestation, this is one area where a waiver by the United Nations might be advisable. Work to reverse environmental damage in North Korea could have benefits that include reduced flooding and soil erosion, which would assist agricultural production. Additionally, while concerns about the diversion of resources by the North Korean regime to its weapons programs will remain a concern for the foreseeable future, reforestation is one area where even if the regime were hoping to harvest the lumber for export any financial benefits it might gain from reforestation would not be in the near term.

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

Photo from the World Bank Photo Collection’s photostream on flickr Creative Commons.

By Sang Hyun Back

With 13 million tons of plastics expected to enter the ocean this year, responsible waste management is increasingly a global imperative. Moreover, as plastic waste carries the potential to affect human health, it is sensible for governments around the world to take action to resolve this crisis. Accordingly, South Korea’s Ministry of Environment (MOE) has taken steps to reduce plastic waste. However, questions remain on how prudent its policies have been.

The immediate impetus for action came in July 2017 when the Chinese government declared it would stop importing 24 kinds of solid wastes by the end of the year, including plastic bottles and containers. Prior to the ban, China had been importing 45% of the world’s plastic wastes, including 22,097t of polyethylene terephthalate (PET) wastes from Korea in January and February of 2017 alone. Following China’s implementation of the ban, this figure dropped by 92%. Moreover, other countries redirected their waste exports to Korea, which tripled the year-to-year volume in January and February. These shifts led 48 recycling companies in South Korea to stop collecting wastes since they could not process them, leaving large quantities of uncollected trash on the street.

In response, the MOE strengthened the enforcement of existing laws and created new ones, which focus on cutting down plastics at all levels, including with production, distribution, and consumption. Through these efforts, the MOE aims to halve the plastic waste output by 2030.

In 2015, South Korea used 6.719kt of plastic resins for their plastic consumption, meaning Korea’s plastic consumption per person was 132.7kg, second highest in the world. Furthermore, Korea’s compound annual growth rate for plastic consumption from 2009 to 2015 was 3.0%, higher than developed countries like Japan (1.63%), USA (2.19%), and Western Europe (0.25%). When it came to producing plastic resin, South Korea produced 14.175kt in 2015, which was higher than Japan’s. Korea’s production was only about 40% of United States, but South Korea’s population is a sixth of United States.

To limit growth of plastics litters in Korea, the ministry has targeted both production and consumption. In 2018, the MOE enforced the 1994 law that banned plastic takeout wares in café and bakeries. In addition, the ministry will ban plastic grocery bags starting in October. Banning plastic bag is an important measure since on average Koreans use 420 plastic bags per year, which is higher than citizens in other developed countries like Germany and Spain with 70 and 120 per year respectively. Additionally, the production of colored bottles, which are more costly to recycle than non-colored ones, will cease by 2020. Once the ministry enforces these laws, plastic rubbish should go down. In 2015, 57.5% of plastic consumption was packaging. One industry where there is a large amount of plastic packaging used is the coffee industry, where in 2016 there has been an estimate of 18,000 coffee shops in Seoul alone.

However, a few problems have emerged from these laws. Foremost, small businesses are disproportionately affected.  Major coffee shops, such as Starbucks, Ediya Coffee, Hollys F&B, Tom N Toms, Caffe Bene, have entered a volunteer agreement with the government to manage their plastics on their own term. Corporate coffee chains have the resources to limit plastic wastes by implementing new policies, paper straws, straw-less lids, and ten percent discounts for customers that bring in a tumbler. Meanwhile, small businesses are having more troubles with the law because of four reasons.

First, they now have to buy more non-disposable wares, which costs more money and requires additional labor to clean. Major stores like Coffee Bay and Ediya Coffee are much less affected because they received free dishwashers and over 20,000 mugs from the Environment Ministry Korea Electronics Recycling Cooperative (KERC).

Second, some shops did not receive proper notification from the government, and were caught off-guard and ill-prepared.

Third, enforcing the law is harder for small business. There are customers that lied about getting takeout or just sitting few minutes to cool their drink. Workers in small cafés with a smaller number of workers, some being ran by only one person, must spend extra time to handle these offenders. However, larger business that have a large number of workers have an easier time enforcing the new regulation.

Fourth, materials that are difficult to recycles, such as polyvinyl chloride (PVC), will be phased out. The problem is finding suitable replacements. By targeting packaging consumption so hastily, it will be difficult for instant noodle companies and clothing manufacturers to comply, especially smaller companies.

Curbing plastics is a matter of great importance. Plastic wastes in the ocean are clearly causing harm. Yet, plastics are widespread, not because people are in love with them, but because plastics are convenient, cheap, and durable. It is right that the MOE is taking proactive measures to address the issue, but the ministry should be cognizant of the burdens on small businesses and think more creatively about the issue.

One place to start might be to push domestic recyclers to process more domestic refuse by limiting plastic waste imports from abroad. While Korea recycled a larger share of its total plastic waste (59.5%) than countries in Europe (31.1%), companies continue to show preference for processing imported waste because they are better in quality. As a result, Korea has continued to import plastic waste despite the overcapacity challenges created by China’s waste import ban. In addition to limiting the supply of imported plastic waste, the Korean government can also incentivize recycling companies to take on more domestic waste by implementing laws that will ensure that citizens keep their garbage cleaner.

It is important for Korean government to remember that there are other policies aside from decreasing plastics wastes.

Sang Hyun Back is a graduate student with the Asian Studies program at George Washington University. He is currently an Intern at the Korea Economic Institute of America.  The views expressed here are the author’s alone.

Photo from Alex Santosa’s photostream on flickr Creative Commons.

By Juni Kim

A relentless and unprecedented heat wave continues to scorch South Korea with little relief in sight. Cities across the country have recorded all-time high temperatures in recent days, with temperatures peaking above 40 degrees Celsius (104 degrees Fahrenheit). The Korea Center for Disease Control and Prevention reported yesterday that ten people have died due to heatstroke, with seven deaths occurring just last week, and over a thousand people have suffered from heat-related illnesses

The continuing heat wave has prompted concerns of mass electricity shortages as power demands reach record numbers. The Korea Electric Power Corp reported multiple blackouts across South Korea over the weekend, including in the major cities of Seoul, Busan, and Gwangju.

Paik Un-gyu, the nation’s Minister of Trade, Industry, and Energy, acknowledged the record demand in a parliamentary report made yesterday. Despite the outages, he reassured that the South Korean government “will be fully ready for the stable power supply this summer.” In order to meet the increased electricity demand, two offline nuclear plants, Hanbit 3 and Hanul 2, will be brought back online in August and scheduled maintenance for plants Hanbit 1 and Hanul 1, originally planned for mid-August, will be postponed.

In a cabinet meeting held earlier today, President Moon Jae-in recommended that heat waves be included on the natural disaster list designated by the Act on the Management of Disasters and Safety. He stated, “I urge you to recognize the prolonged heat wave as a form of special disaster and once again carefully review related measures.” His comments follow talk from the Ministry of Interior and Safety to revise the current disaster law to include extreme heat. The Ministry has already taken measures to address the heat wave, including an additional 6 billion won ($5.3 million) of funding announced earlier today to help local governments handle the problems caused by the unprecedented heat. The funding follows an initial provision last month that provided 4 billion won to cities and provinces.

Unfortunately, South Koreans can expect little relief in the coming days as weather forecasts expect the heat wave to continue until the end of the month. To help beat the heat, South Koreans have taken to traditional summertime foods like samgyetang, a hot chicken and ginseng soup. While eating soup may seem like an odd tactic for combating hot weather, it follows an old Korean saying to fight fire with fire (이열치열). According to the online retailer Gmarket, sales of chicken and duck, both associated with helping to increase stamina, have increased 57 percent and 167 percent compared to sales numbers last year.

Juni Kim is the Program Manager and Executive Assistant at the Korea Economic Institute of America (KEI). The views expressed here are the author’s alone. 

Photo from eLjeProks’ photostream on flickr Creative Commons.