By Kyle Ferrier, Sang Kim, Yong Kwon, and Troy Stangarone

After the U.S.-North Korea summit in Singapore, 2019 was supposed to be the year that the United States and North Korea worked out a deal to begin dismantling its nuclear weapons and ballistic missile programs. It was not to be. The talks fell apart at the Hanoi summit, dashing hopes for increased inter-Korean cooperation, and the process never got back on track.

The breakdown of U.S.-North Korea talks, however, wasn’t the only major relationship to face trouble in 2019. South Korea’s relations with Japan hit a low point as Tokyo surprised everyone by placing national security restrictions on three key chemicals for the production of semiconductors, threatening South Korea’s most important export industry.

South Korea’s economy also took a hit. The trade tensions with Japan, in combination with the U.S.-China trade war, already slowing exports of semiconductors, and slowing global growth, resulted in South Korea’s lowest level of GDP growth since the Global Financial Crisis.

As we look forward to the rest of 2020, there will be significant focus on developments with North Korea and South Korea’s relationship with Japan. Political change could be in the offing as well, as elections are set for the National Assembly and the presidency in the United States. But domestic issues dealing with the elderly and South Korea’s declining fertility rate will also be in focus.

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 to come:

Efforts to Denuclearize North Korea

Despite realizing the first ever U.S.-North Korea summit meeting in 2018, talks between the United States and North Korea largely came to a halt last year. The question for 2019 is what comes next in U.S.-North Korea relations. With Pyongyang announcing that it no longer feels bound by its prior pledges not to conduct nuclear weapons or ballistic missile tests, there are concerns that the Korean Peninsula may return to the “fire and fury” period of 2017.  Alternatively, North Korea could attempt to return to talks with the United States and to strike a deal prior to the 2020 presidential election. However, the North Korean leadership likely recognize that any attempts to negotiate deal could be undone by a change in administrations in the United States.

More likely, North Korea will continue to increase its stockpile of weapons and engage in efforts to advance its weapons technology, while avoiding the types of tests that might force the international community to tighten the sanctions on its economy. In the absence of a provocative test by North Korea, another issue to watch will be how well the sanctions regime will hold. Russia and China have already signaled that they may have a waning patience for sanctions.

Reaching an Agreement on U.S.-Korea Military Burden Sharing

Contentious negotiations between Seoul and Washington on a new Special Measures Agreement (SMA) – determining how much South Korea contributes to hosting U.S. military forces – have unsurprisingly lapsed their December 31 deadline. The Trump administration’s call for Seoul to increase its 1.02 trillion won contribution by 400% caused a stir among South Koreans in the second half of last year. The sheer size of the proposed jump seemed to suggest that the U.S. underappreciated their country’s support for the alliance and led many to question the nature of the relationship. Talks are set to resume this month, but it’s unclear in what direction they are heading. In late December the South Korean newspaper Chosun Ilbo reported Washington’s asking price had dropped to only a 10-20% increase, which U.S. officials later denied.

The conditions of a new SMA could have significant implications for the alliance, though there are still many unanswered questions. Other than the amount, the other significant aspect to follow is duration. If the U.S. again pushes for a one-year deal – rather than the multi-year agreements that both sides usually agreed to prior to the Trump administration – it could be a big gamble for South Korea given the U.S. presidential election in November. Since Trump himself is by all accounts driving the U.S. position, if he were to lose his re-election campaign then his Democratic opponent would be much less likely to pursue such a hardline stance. However, should Seoul and Washington strike a one-year deal and Trump wins in November, the new SMA talks could be even more of a challenge to the alliance than they have been recently.

Revitalizing the South Korean Economy

The South Korean economy is in the doldrums. GDP is expected to have only grown by 2 percent last year, the lowest since the wake of the global financial crisis in 2009. Even if the government were to hit its 2.4 percent growth target – which many see as too ambitious – it would mark the first time since at least 1954 that the country recorded back-to-back years of lower than 2.5 percent growth.

Getting the economy back on track is among President Moon’s highest priorities for this year. Though the administration’s “income-led” growth policies have produced limited results so far, the Blue House will amplify its efforts this year with new plans for infrastructure, job creation, and social spending. But, the question still remains whether these initiatives will be enough to reinvigorate the economy. Moon’s detractors continue to argue his policies still don’t do enough to account for business interests and are therefore destined to fail. What will likely have a much greater impact on the direction of the South Korean economy this year, however, are major developments abroad. Increased demand for semiconductors and a resolution between Beijing and Washington on trade issues could be a boon for the economy, just as much as further uncertainty could act as a drag.

The Course of South Korea’s Relations with Japan

Last year saw relations between South Korea and Japan hit one of their lowest points since the normalization of relations in 1965. In response to a South Korean Supreme Court’s decision in 2018 that Japanese companies were liable for their use of forced labor during the Second World War, Japan decided in July to place national security restrictions on three key chemicals for the production of semiconductors and later to remove South Korea from its “white list” of trusted exported partners. South Korea responded by removing Japan from its “white list” of trading partners and announcing that it would not renew its military intelligence sharing agreement with Japan – though that has been delayed for the moment.  Despite lower level meetings and a meeting between President Moon and Prime Minister Abe Shinzo in late December, South Korea and Japan have been unable to resolve their disputes. The question for 2020 is whether the two sides will be able to find a resolution to their economic and historical disputes that would allow them to improve relations, or whether this could become the new normal.

Can 5G Help Improve the Prospects of South Korea’s Semiconductor Industry?

With Samsung and SK Hynix two of the world’s dominant producers of memory chips, along with the U.S. based Micron, South Korea was well placed to take advantage of the growing demand for memory chips in recent years. In 2017 and 2018, a surge in demand in the semiconductor industry helped to turn memory chips into South Korea’s top export item, accounting for nearly 14 percent of exports in 2018 and up from just 5 percent in 2014. However, the super cycle began coming to an end in the second half of 2018 and sales continued to decline throughout 2019.  The prospects of recovery have been clouded over the last year by Japan’s new export restrictions and the U.S.-China trade war. They have also been hindered by the slower rollout of 5G around the world due to U.S. efforts to convince countries not to use Huawei for their 5G infrastructure. However, there is hope that as 5G comes online in more markets demand for new 5G capable phones, along with the continued growth in data centers, will help to boost the prospects for South Korea’s most important industry.

How the U.S. Presidential Elections Could Impact Policy

Although taking place outside the Korean Peninsula, the U.S. presidential election in November will have a significant impact on the Korean Peninsula. The election of Donald Trump in 2016 brought about a significant shift in how the United States manages its alliances with countries such as South Korea and its policy towards North Korea. The shape of U.S. policy on issues related to burden sharing, trade, and North Korea will likely all depend on whether Trump is able to win reelection. Those policies could all shift if the Democratic nominee or another Republican were to win the White House in 2020 if Trump were removed from office.

Legislative Election in April will likely Shape the Platforms and Outlook of Korea’s Major Parties

In addition to the U.S. presidential election in November, South Korea will hold a critical election in April for all 300 seats in the country’s unicameral legislature. This election will serve as a litmus test for the public’s confidence in the incumbent administration’s direction and determine President Moon Jae-in’s ability to advance policies during his remaining time in office. Taking a broader view, the election is historic because new faces representing new constituents will take their seats in the next legislative session. The National Assembly’s recent decision to lower the voting age from 19 to 18 will bring 530,000 potential new constituents to the polling booth in April. It is unclear yet how this will impact support for either conservative or progressive parties – but this will no doubt impact the platforms of respective parties looking to win the support of this new cohort. This perhaps partly influenced the leading parties’ decision to retire prominent legislators who had long been the face of the political establishment. Examples include former ruling party legislator and presidential chief of staff Im Jong-Seok and former opposition leader Kim Moo-sung. The upcoming general election, therefore, acts as a beginning of a new period for the increasingly assertive National Assembly.

Can South Korea Improve Its Fertility Rate

South Korea faces a demographic crisis. South Koreans are living longer and South Koreans born a decade from now are expected to have among the longest lifespans of any group of people in the world. However, the question facing South Korea is how many children will be born when the country attains this public health success? In 2018, South Korea had a total fertility rate of 0.98, a historic low, and the final data for 2019 is expected to be even lower. Through September of last year, births were down 8.9 percent from 2018. It will take time and significant social change to return to anything close to the number of births that would allow Korea to reach the replacement rate of 2.1, but the key to watch in 2020 is whether South Korea is able to introduce measures to reverse the current trend and return to a total fertility rate of at least 1.0. The odds are likely stacked against it.

Will the Government Comprehensibly Tackle Elderly Poverty?

President Moon Jae-in pledged to improve the social safety net upon his election in 2017. Since then, the South Korean government’s efforts to assist underemployed youths, curb the financial burdens of childcare, and raise the minimum wage have received the most attention from economists and the media. This can be attributed to the expectation that these policies will have the most impact on South Korea’s human capital resources and industrial productivity in the years ahead.

However, the country’s biggest social welfare crisis is elderly poverty. 2017 data from the Organization for Economic Co-operation and Development (OECD) revealed that 43.8 percent of South Koreans over the age of 65 live in relative poverty (defined as earning 50 percent or less of median household income) – well above the average of 12.5 percent for OECD member countries. This is more than any other country in the 34-country community. While the government does distribute a basic pension to elderly who are in the bottom quintile of income earners, the policy (covering around 35 percent of seniors) provides an insufficient amount to those who qualify and leaves those who do not qualify in a precarious economic position.

Moreover, with the future tax base falling alongside declining birth rates, the National Assembly Budget Office noted that reserves of the National Pension Service will reach zero in 2054.

In response to the crisis, President Moon has pledged to increase the basic pension by nearly 50 percent and double the number of job openings for older workers. However, the challenge is not simply a financial one – reports suggest that many elderly also suffer from loneliness and associated mental health issues. This has manifested in several social challenges, including growing crime rate among elderly and the highest elderly suicide rate among OECD countries. Therefore, resolving the elderly poverty crisis will require a more in-depth solution that incorporates community participation and increased public funding.

How YouTube Shapes Media Consumption in South Korea

In 2019, South Koreans spent more time on YouTube than any other mobile apps.  South Koreans teens spent an average of 42 hours a month watching YouTube videos and people in 20s spent about 31 hours. It is also interesting that people in the 50s and above watch a significant amount of YouTube videos with an average of 20 hours a month, more than people in the 30s and 40s. The number of South Korean smartphone users also hit a record high in 2019, now over 91% of the population own smartphones. People now have instant access to content whenever and wherever compared to traditional cable TVs.

So what are they watching? There is a wide variety of content available for any audience across the age range, from mukbang, music videos, product reviews, kids channel, lectures, cooking, to politics and news. YouTube is not only a source of entertainment but increasingly becoming a resource for self-learning and information. It also became an attractive space where people can create their own content to share with others and even make a profits. Because of the popularity and influence of YouTube, being a YouTube creator made it to the topic 3  dream jobs for South Korean elementary schoolers, followed by athletes and teachers.

Given the wide accessibility and popularity, creating a YouTube channel has been a trending communication strategy for companies and even government agencies to send their message and expand their audience. In 2020, YouTube will continue to influence and impact how South Koreans consume online content and we will see more media content tailored toward YouTube users.

Kyle Ferrier is Fellow and Director of Academic Affairs at the Korea Economic Institute of America, Sang Kim is the Director of Public Affairs and Intern Coordinator, Yong Kwon is the Director of Communications, and Troy Stangarone Senior Director and Fellow. The views expressed here are the authors’ alone.

Image created by Juni Kim Senior Manager for Operations and Technology at the Korea Economic Institute of America. Image photos from the flickr Creative Commons photostreams of The White House, the Republic of Korea, and the U.S. Pacific Fleet.

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

• Last year, the National Assembly failed to pass several crucial bills – including ones dealing with child safety and police investigation – due to protracted political strife over a handful of controversial bills related to electoral reform and prosecution reform.
• On January 9, the National Assembly held a plenary session and belatedly approved a total of 198 bills, even though Liberty Korea Party (LKP) delegates refused to take their seats.
• Prime Minister-designate Chung Sye-Kyun cited a 2012 law – which prevents the fast-tracking of legislation that does not carry support from three-fifths of delegates – as one of the causes of the current dysfunction.

Implications: The National Assembly’s inability to overcome internal gridlock elevated the stakes for the ruling and opposition parties to secure more seats in the upcoming legislative elections in April. If the ruling party gains a majority in the unicameral chamber, it will likely move to make changes to the parliamentary procedure. While the most immediately urgent bills related to pensions, personal data use, and police investigations were finally approved last week, revisions to the legislative rules could help President Moon maximize his ability to enact changes in the remaining two years of his term before the 2022 presidential election.

Context: While the current National Assembly has been criticized for its failure to pass key bills, the gridlock is the result of the legislature’s ongoing effort to grow into a more democratic body. The 2012 ‘National Assembly Advancement Act’ was adopted to prevent any one political party from unilaterally overruling opposition parties with a simple majority. By creating more time and space for dialogue, the reform was also designed to dissuade lawmakers from resorting to physical violence. As part of these changes, it re-introduced the filibuster which had been abolished under authoritarian rule in 1973. These reforms can be seen as part of institutional changes that began with South Korea’s democratic transition in 1987 – and questions about their effectiveness will catalyze discussions that could further strengthen the country’s democratic institutions.

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

Picture from flickr user Seongbin Im

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

• On December 27, the National Assembly lowered the voting age from 19 to 18.
• Under the new law, approximately 530,000 18-year-old citizens are now eligible to vote in the upcoming legislative elections in April.
• This includes 140,000 current high school students. In response, Education Minister Yoo Eun-hye announced plans to widen civics education.
• According to Gallup Korea polling on December 10, the approval rating for the Minjoo Party among constituents aged 19 to 29 stood at 37 percent. Same poll found 10 percent support for the Liberty Korea Party, 9 percent for the Bareunmirae Party, and 8 percent for the Justice Party.

Implications: Ongoing efforts by the major parties to transform their image ahead of National Assembly elections in April have been accelerated by the extension of suffrage to 18-year-old citizens. Although the newly enfranchised voters are estimated to be only 1.1 percent of the total electorate, they are expected to have an impact in closely-contested districts. With this upcoming election set to determine President Moon Jae-in’s authority for the remainder of his term, the stakes of winning these competitive areas are elevated for both the ruling and opposition parties. As a result, there is a spotlight on the youth vote.

There is an assumption that the new voting age rule will benefit progressive parties. However, this is not a certainty. With Korea still struggling with high youth unemployment, perceptions that the incumbent administration has failed to deliver employment growth may curb youth enthusiasm for the ruling progressive party. Moreover, President Moon’s approval rating among voters in their 20s dipped slightly during the scandal surrounding former Justice Minister Cho Kuk. Since the scandal centered around the accusation that Minister Cho gave his children an unfair advantage in college admissions, the negative outlook towards the incumbent administration may be more accentuated among 18-year old voters.

Context: When Japan lowered its voting age from 20 to 18 ahead of the 2015 elections, Japan’s conservative Liberal Democratic Party won 40 percent of the votes while the opposition party only garnered 17 percent. At that time, Japanese youth voted primarily based on which party they thought had a better economic policy.

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

Photo from the Republic of Korea’s photostream on flickr Creative 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

• For the fifth year in a row, the National Assembly failed to pass a budget by the December 2 deadline.
• The ruling Minjoo Party sent several bills through the new fast-track legislation process despite the objection of the opposition Liberty Korea Party (LKP).
• In response, the LKP has threatened to filibuster 199 bills until the end of the regular parliamentary session on December 10.

Implications: This most recent legislative gridlock revealed that political tensions extend beyond the highly publicized controversies around cabinet appointments and are becoming an established part of everyday South Korean politics. The LKP’s ongoing filibuster is aimed at preventing a vote on fast-tracked bills proposed by the government to accelerate election and prosecution reform. It is also preventing the passage of several other bills, such as one to make school zones safer. The Minjoo Party has accused the LKP of holding these tangible bills affecting people’s livelihoods “hostage” for their political agenda. Simultaneously, the ruling party has no plans to make compromises with the LKP. Instead, the Minjoo Party intends to work with minor opposition parties to circumvent the LKP.

Context: Members have also refused to keep their feud within the walls of the National Assembly. Last month, the chairman of the Liberty Korea Party completed an eight-day hunger strike to oppose the Moon administration. Earlier this year, members of the LKP also publicly protested the administration’s nomination of Cho Kuk as justice minister.

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

Photo from the Republic of Korea’s photostream on flickr Creative 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

• A top official from the Liberty Korea Party (LKP) announced that one-third of their incumbent lawmakers would not stand in next year’s legislative elections.
• On November 17, in two separate announcements, former Minjoo Party legislator and presidential chief of staff Im Jong-Seok and LKP Representative Kim Se-Yeon declared their intention to not run in the upcoming election.
• Others like former LKP leader Kim Moo-sung and Minjoo Reps. Rhee Cheol-hee and Pyo Chang-won also announced their decision to not seek a nomination in 2020.
• In last year’s Inter-Parliamentary Union survey, South Korea ranked 143 out of 150 member countries for the share of lawmakers aged below 45 (6.33 %).

Implications: Public demand for a “changing of the guard” in the next parliamentary election reflects widespread fatigue with the existing political establishment. Successive scandals in both the leading ruling and opposition parties, from President Park’s impeachment to Justice Minister Cho Kuk’s resignation, fueled dissatisfaction towards the existing cast of figures leading the legislature. Making things worse, the current legislative session is on track to end with the lowest number of bills passed.

In response, a recent survey showed that 69.4% of respondents noted that at least 30% of lawmakers should be replaced in the next election. In another survey, 80.5% of respondents agreed that there should be some generational change in the upcoming parliamentary election. These polls pressure political parties to overhaul their lineup of candidates. Announcements by political mainstays like Im Jong-suk and Kim Se-yeon last week emboldened calls to replace multi-term lawmakers with new faces.

Context: It is not the first time that the general public’s dissatisfaction translated into an injection of fresh politicians to the legislative election lineup. However, there are arguments that next year’s election will be a broader push for a generational change. In 2004, 23 lawmakers in their 30s were elected. The number of first-term lawmakers aged under 40 significantly decreased since the 2008 election. Only 3 of the 300 lawmakers elected in 2016 were under the age of 40. While these veteran legislators were once at the forefront of leading South Korea’s political transition from authoritarianism to democracy, the so-called 386 generation is now seen as a roadblock for younger, more dynamic politicians who can bring fresh policy ideas to the National Assembly.

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

Photo from the Republic of Korea’s photostream on flickr Creative 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

• On October 7, Tada, a ride-hailing mobile app platform, announced that it would increase its number of vehicles from 1,400 to 10,000.
• In response, 12,500 taxi drivers gathered to protest against Tada on October 23.
• On October 28, the Seoul Central District Prosecutors’ Office indicted the heads of Tada on charges of operating illegal passenger transportation business.

Implications: The South Korean government is struggling to balance its dual aim of promoting innovative business and protecting workers in existing industries. The government has been cutting regulations to accelerate innovative growth and incentivize startups. However, some innovations inevitably displace some traditional industries. The transportation industry is one of the most salient examples of this conflict. Recently, prosecutors indicted Tada executives following massive protests by taxi drivers who argued that the government should halt Tada’s illegal operations. The Korea Startup Forum, an advocacy group for local startups, voiced concerns that the indictment might nullify government’s efforts to boost innovation.

Some observers are concerned that the case against Tada might have a cooling effect on startups and investments in innovations related to the sharing economy. Because the indictment against Tada comes on the heels of similar cases involving Uber and Kakao, some have accused the government of “much talk but little action” on innovation.

Context: This is not the first time that the taxi industry fought against ride-sharing platforms. The government has been attempting to find a “win-win” solution that would allow startups like Tada to operate while appeasing taxi drivers. In July, the transport ministry proposed a plan in which service like Tada would contribute a portion of their earnings to a public fund that would purchase taxi licenses. However, both Tada and taxi drivers were dissatisfied with the government’s suggestion.

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

Picture from user Ged Carroll 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

• The Ministry of National Defense announced plans to loosen physical standards for eligible conscripts. This aims to help the military meet its manpower needs.
• Simultaneously, the Ministry of Patriots and Veterans Affairs recognized Ha Jae-heon, a former Army soldier who lost his legs to a North Korean landmine, as having been “wounded in combat.”
• Observers see the elevation of Ha’s designation from “wounded while in public service” as part of an effort to publicly underscore the government’s appreciation of servicemen.

Implications: The South Korean government’s effort to prevent rapid aging from affecting its military readiness may incur backlash from young men who already feel disenfranchised. While ongoing reforms hedge against the inevitable reduction in military personnel, the government appears to also place emphasis on public outreach to encourage military service. This is evident in improvements in military welfare and the government’s efforts to promote positive images of military service. In particular, men wounded in uniform are now receiving higher compensation to ameliorate negative perceptions.

The government also decided to increase manpower by loosening physical standards for eligible conscripts. This decision has already sparked a backlash among many young men who see the male-only draft as a hindrance to their job prospects and welfare. This cohort of conscription-eligible young men already displays dissatisfaction with the incumbent administration. According to a Gallup Korea poll in September, only 31% of men in their 20s have a favorable view of the government. Only men in their 60s have responded with a lower favorability towards the incumbent administration.

Context: The number of conscripts fell from 291,000 in 2009 to 253,000 in 2018. This corresponds with the shrinking population in the past decade. The number of men eligible for conscription is expected to fall below 250,000 after 2022. As a result, even if 90 percent of young men serve in the armed forces as a volunteer or conscript, South Korea will have to ensure future preparedness with a drastically smaller military.

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

Picture from the U.S. Department of Defense website

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

• South Korea looks to assume wartime operational control (OPCON) from the United States by 2022.
• A survey conducted by the ASAN Institute in February revealed that 40% of South Koreans supported the planned transfer, while 32% advocated postponement and 11 called for the plan to be eliminated altogether.
• A group of retired deputy commanders from the Combined Forces Command (CFC) urged the Moon administration to postpone these changes until after North Korea’s denuclearization.

Implications: A long-established progressive-conservative flashpoint, South Korea’s assumption of OPCON continues to divide people along partisan lines despite growing criticism of U.S. government’s North Korea policy by people on all political spectrums. The conservatives’ strong support for the status quo is partly rooted in the fear that the U.S.-Korea military alliance may begin to unravel if Seoul regains OPCON. This aversion to potential abandonment outweighs conservatives’ growing dissatisfaction with Trump’s policies towards the Korean Peninsula, particularly his amicable posture towards Kim Jong-un. This also overcomes bipartisan misgivings around the Trump administration’s demand for more money to host U.S. troops in South Korea. The opinion of CFC deputy commanders will further embolden conservative opposition to President Moon’s current push to accelerate OPCON transfer.

Context: Domestic politics aside, South Korea still faces several barriers before it can secure OPCON. First, the South Korean military must pass a test to validate its capabilities. Second, the two countries must conclude negotiations on the role of the United Nations Command post-OPCON transfer. In recent months, these talks have reached a significant impasse. As such, the timeline of OPCON transfer may be delayed despite the Moon administration’s plans.

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

Picture from UNC – CFC – USFK 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

• Many online platforms served as venues for the political debate around the controversial confirmation of Justice Minister-designate Cho Kuk.
• Supporters and detractors engaged in online campaigns to elevate their respective taglines on the ranking of most-searched keywords on major search portals.
• A group of petitioners claimed that detractors attempted to reduce the credibility of their online petition by using fake accounts and uploading hoax signatures.

Implications: While the high rate of online penetration has been an economic boon to South Korea, the absence of vigilant monitoring on online platforms have raised concerns that savvy users may hijack the algorithm to manipulate political discourse. Both detractors and supporters of Justice Minister Cho Kuk’s confirmation mobilized users to input specific taglines into the search bars of popular online portals, causing key phrases to appear in real-time search rankings. Their aim was to influence public opinion. Observers have also raised suspicions that automated programs were used to boost these search terms. Similarly, some activists have alleged that fake accounts were being used to both inflate and sabotage online petitions. With limited progress from the public or private sectors to control this abuse, civil society leaders worry that these tactics will pose threats to the credibility of democratic institutions and processes.

Context: Concerns around misinformation and public opinion manipulation are acute in South Korea because of the country’s extensive smartphone and internet penetration. The courts recently convicted power-blogger Kim Dong-won for engaging in an illicit cyber-operation to influence public opinion. Kim ran a computer program to artificially inflate the number of “likes” on online comments to boost positive public sentiment for then-candidate Moon Jae-in ahead of the 2017 election. Although the problem had been previously acknowledged, this scandal created a very public spotlight on the risks posed by digital technology.

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

Picture from user TFurban on flickr

By Mark Tokola

Paul-Henri Spaak, the post-war Belgian statesman who served both as one of the founders of the European Union and as Secretary-General of NATO, wrote in his memoirs that “one must also desire the consequences of what one desires.”  In other words, you shouldn’t complain about the foreseeable outcomes of your actions.  One of the striking features of the past few years is that disparate countries have made seemingly conscious decisions to take actions that clearly are not in their own economic interest in pursuit of other national objectives.

China’s economic retaliation against South Korea in reaction to its deployment of the THAAD anti-ballistic missile system, the United Kingdom’s “Brexit” decision to leave the European Union, and Japan’s restrictions on its own exports to South Korea were all foreseeably economically counterproductive—despite thin denials to the contrary—but all were done anyway as matters of national interest.

In the case of China’s actions against South Korea, it is fairly simple for authoritarian regimes to pull economic levers to execute foreign policy decisions.  The Chinese government “inspections” of South Korean company Lotte’s stores in China were simply harassment to push them out of business.  Concert organizers’ decisions to cancel the visit of Korean entertainers and the sudden evaporation of Chinese group tours to Korea were orchestrated by the government despite official claims that Chinese companies and tourists were simply making their own independent decisions.  Such claims seem more ‘for the record,’ than to be taken seriously.  The short-term effect was to damage South Korean economic interests, but the foreseeable consequence was that South Korean corporations are diversifying their operations to lessen their dependence on China and China’s reputation as a reliable place to invest has suffered damage.  China calculated that its need to strike at South Korea was worth the long-term economic consequences.

In the case of Brexit, the consensus among British industry and economists is that the UK has benefitted greatly from being part of a common market along with its major trading partners.  Although some “Brexiteers” argue that leaving the EU will “unleash the British economy” to pursue its own trading relationships and to make its own domestic regulations, they defensively argue at the same time that even if there was an economic cost to leaving the EU, it would be worth paying to claim more British sovereignty.  Watching the years-long debate, it has been obvious that Brexit is not about economics.  The UK has never been wholly comfortable operating within the EU institutional structure.  The irritation of having to obey club rules, even though the UK had a large part in writing them, has always seemed to overshadow the benefits of club membership.  The political—and perhaps psychic—benefits of Brexit have been judged (so far) by a democratic process to outweigh the economic costs that are already being felt within the UK.

No country has benefitted more from the rule and norms based international trading system than Japan.  Its export-driven growth over the past seventy years has made it one of the world’s major economies.  That made it all the more surprising when Japan announced restrictions on exports of three chemicals key to South Korea’s production of semiconductors. That was followed by the removal of South Korea from its “white list” of trusted trading partners.  It is apparent that Japan acted out of frustration with South Korea’s colonial and wartime claims against Japan, particularly the South Korea Supreme Court’s decision at the end of 2018 that Korean forced laborers had the right to sue Japanese companies for unpaid wages.  Setting aside the rights and wrongs of that issue, Japan’s actions are not in its economic self-interest.  Japanese companies also use Korean semiconductors and displays.  Making technology cooperation between Japan and Korea more difficult when both are facing the challenge from China is self-defeating.  Nevertheless, the Japanese government determined that political considerations outweighed economic self-interest.

There have always been cases of countries subordinating economic interests in the face of pressing foreign policy requirements.  Economic sanctions against South Africa, Cuba, Serbia, Russia, North Korea, and other countries have required the sanctioning countries to forego otherwise profitable trade.  National interests came first.  Countries have also maintained control of essential national infrastructure even at a commercial loss.  What is new is that countries, including the United States, have expanded the sphere of what they consider national interests to include areas such as immigration policy, national pride, and the promotion of non-defense related manufacturing sectors.  They have determined that those are pressing national requirements.  The question is whether they are prepared to accept and openly admit to the foreseeable economic consequences.

Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.

Photo from UK in Japan-FCO’s photostream on flickr Creative Commons.