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[Economic Opinion] Keys to Successful New Southward Initiatives

President Moon probably spent one of the busiest and audacious months in his entire presidency so far. After visiting the EU and European countries from October 13 through 21, he left Seoul on November 13 to head to Singapore where the 13th East Asia Summit (EAS) and the 2nd RCEP meetings were scheduled, immediately followed by the 26th APEC summit meetings in Papua New Guinea. He met personally with almost all the leaders of the world at the meetings, seeking cooperation in the venues of mutual prosperity and security.

Amidst President Moon’s numerous addresses and remarks delivered throughout his trips, one of the most intriguing themes has been his commitment to the New Southward Initiatives (NSI). His idea of NSI was first revealed on November 9, 2017 at the Korea-Indonesia Business Forum, emphasizing people, peace and prosperity in 10 ASEAN nations, enabling them to compete successfully with the four most powerful countries of the world, namely the U.S., China, Russia and Japan. Once again at the ASEAN+3 meeting, the president emphasized the importance of building up the East Asian community, putting the NSI as the pillar of it. Of course, President Moon wants Korea to play a crucial role in effectively creating a competent East Asian community, for the sake of mutual benefits that can be shared among all of the countries in the region.

No one would ever doubt the potential that East Asian countries have in economic, cultural and social development. Like Korea and Taiwan a few decades ago, the other ASEAN countries will follow in the footsteps of rapid growth and development. Of course, some countries may be more successful than others, but generally, they are achieving huge success just like Korea and Taiwan had in the past. They might actually be in a better position than Korea or Taiwan, as they are more abundant in resources and less reined in by ideology. There may potentially be more external helpers than there were for either Korea or Taiwan. Indeed, like Korea and Taiwan, the ASEAN countries will need foreign capital, technologies, cooperation and friendly advice.

But the real challenge is that if Korea wants to achieve mutually beneficial relations with ASEAN countries through NSI, why wouldn’t other countries want the same? A good example of this is China’s One-Belt One-Road policy (OBOR). OBOR is a development strategy involving infrastructural development and investments in various countries in Europe, Asia and Africa. Here, the Belt refers to the overland routes, or the Silk Road Economic Belt and the road and sea routes, or the 21st Century Maritime Silk Road. The Chinese government aims to enhance regional connectivity and embrace a brighter future. Japan is not without interest in Southeast Asia, either. Indeed, Japan is more active in achieving furtive economic cooperation with ASEAN countries. While openly and actively restraining as well as checking on the Chinese movement, Japan is stealthily penetrating East Asian countries for long trades, investment and technology transfer. In other words, if the Chinese OBOR is loud and audacious, Japan’s East Asian strategy is quiet and secretive. Therefore, Korea’s NSI requires much more than a simple presidential announcement or declaration for its meaningful success. Here are some key factors to be implemented.

First, the private sector should take full control and determine the direction of NSI. SMES as well as large firms in Korea should actively participate in creating and pursuing the various projects and programs between Korea and Southeast Asian countries. Governmental projects alone would never produce accountable results in the long run. The role of the government should be limited to providing information, encouragement and advice, while private interests should take the helm. Second, the private sectors, taking the initiative, should have a long-term perspective, not seeking short-term profits or benefits. They have to bear in mind the principle that the longer the relations last, the bigger the rewards will be. Many previous development projects were doomed to fail as they were only geared toward reaping short-term profits without much consideration to the future.

Third, the government should be careful not to over-step the boundary of private business. A private deal is a private deal. It is an area where private businesses of the countries must take care of themselves. If the public sectors of the countries meddle in private business, it could easily turn into a scam or scandal, which would critically hamper long-term relations of countries. It is not meant, however, to discourage the government’s involvement. Rather, the government could play an active role in providing non-private activities such as exchanges of students, cultural activities, or joint research programs. The Korean government could develop mutually beneficial public programs in enhancing air quality, reducing poverty or urban planning.

It is certainly refreshing that a special presidential sub-committee on NSI was launched on August 28 earlier this year, with the first meeting being held just a few days before the president left for Singapore. A number of high ranking officials in the government were made ex-officio members of the committee, and members from the private sector are also needed in the committee to make it a potent and effective entity going forward.

By Professor Se Don Shin
Dean, Sookmyung Women’s University

The opinions expressed in this article are the author’s own and do not reflect the views of KOTRA

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