Uncertainty casts pall over northeast Asia

The nations of Northeast Asia need to focus on finding common ground and building trust in the region, said former Prime Minister of South Korea Un-Chan Chung at the Korea Times/Hankuk ilbo Colloquim Series of the Center for Korean Studies.

“As the prospects for our collective prosperity brighten, the pains of the past darken our relations.”by Michelle Sinness

UCLA International Institute, May 5, 2014 — Former Prime Minister of the Republic of Korea Un-Chan Chung spoke about uncertainty in Northeast Asia on April 21, 2014, at the Korea Times/Hankuk ilbo Colloquim Series of the Center for Korean Studies.

Chung outlined three main areas of uncertainty in the region: those associated with the economic situation in Korea, the North-South Korea relationship and regional security in East Asia.

Economic uncertainty in South Korea

The Republic of Korea (ROK) has experienced an economic boom over the last fifty years, during which time its GDP per capita jumped from US$ 100 to US$ 26,000. It presently has the fifteenth-largest economy in the world and the eighth-largest trade volume and boasts some of the world’s leading companies in industries ranging from manufacturing to communications technology.

Chung acknowledged and celebrated the growth of the Korean economy, but pointed out that the country was on the threshold of an economic shift. Because it is no longer a developing country, it must refocus its economic investments.

The challenge, said Chung, is to make the shift from a “quantitatively developed” to a “qualitatively developed” economy. In other words, South Korea needs to move away from traditional engines of growth, such as development and production, and begin to cultivate innovation and creativity. “This is definitely a daunting task,” he admitted.

Individualism and autonomy are limited in the ROK, noted the speaker. Students engage in rote memorization instead of critical thinking in school, and the government is significantly involved in university administration and development. College graduates are being churned out for a workforce more prepared to manufacture than to innovate. As a result, economic polarization is increasing. In fact, only 20 percent of Korean households currently consider themselves middle class.

Like companies in other recently developed economies, South Korea’s large firms have begun to rely on foreign suppliers for inexpensive supplies and labor, creating constraints on employment within the country. Household income cannot increase under these conditions, said Chung, arguing that entrepreneurs needed to be able to emerge and thrive in order to reduce the income gap and move the ROK’s economy forward.

“I'm worried about [the] capacity, commitment and willingness of politicians and policymakers to implement fair, consistent and effective policies to develop SMEs [small- and medium-sized enterprises],” he commented. Without SMEs, he added, the Korean people will not see the rewards of the country’s growing economy.

Uncertainty on the Korean Peninsula

Initial hopes that Kim Jong-un would usher in a new era of diplomatic relations on the Korean peninsula were quickly dashed by the “aggressive and even violent behavior” of the leadership of the Democratic People’s Republic of Korea (DPRK), claimed the speaker. Uncertainty in the relationship between North and South Korea has thus persisted, if not worsened.

Despite the ongoing antagonism, Chung remained optimistic. Cooperation between the two states would be hugely beneficial to the region, he explained, arguing that a peaceful and gradual unification of the two Korea’s would create a large market for trade and development.

However, Chung said that the path to unification — and even cooperation —would likely be rocky. He admitted that South Korea’s policy towards North Korea has been “neither effective nor consistent.” South Korea’s new president, President Park Geun-hye, emphasizes trust building between the two states. This policy direction, Chung says, differs from that of previous South Korean leaders, as it is “positioned between the two bipolar policy conditions pursued by previous governments” (i.e., unconditional economic aid and cooperation, on one hand, and no nuclear weapons as a precondition, on the other).

But according to the speaker, North Korea views building trust as secondary to the acquisition of economic and political power. Kim Jong-un is likely to continue to “flex his military muscle to appear threatening to the world outside,” said Chung, arguing that this gave the North Korean leader a relatively easy way to sustain his power. "Introducing a market economy is equally dangerous for Kim Jong-un because it means shrinking his political power,” he added. Accepting the trust policy of South Korea would also result in major damage to the North Korean regime.

Chung claimed that China’s new leadership would likely be “seriously disappointed with further North Korean acts of aggression” and could reconsider its relationship with the volatile state, a change that would threaten the stability and sustainability of North Korea’s current government.

Despite present uncertainties, Chung reiterated his belief that if North and South Korea could integrate gradually and peacefully, there would likely be significant and steady economic growth in North Korea. "I strongly believe that North Koreans deserve to enjoy their lives: free to travel. . . free to open businesses, free to vote for their leaders and free to speak out,” he remarked.

Uncertainty in East Asia

The final area of uncertainty that Chung touched upon was regional instability caused by ongoing conflicts between Korea, Japan and China. Even as their economic interests converge, conflicts such as territorial disputes in the South China Sea are driving these states apart and increasing mistrust in the region, particularly in light of their divergent views of the past. “As the prospects for our collective prosperity brighten,” he said, “the pains of the past darken our relations.”

Chung noted that China has a number of policies that are perceived as threatening by neighboring countries, such as its actions in the South China Sea. Likewise, the new leadership in Japan has implemented a number of problematic new policies, such as the rewriting of Japanese school textbooks to gloss over historical incidents as Japan’s annexation of Korea in 1910 and its actions in World War II.

Across the region, he said, nationalism has sometimes made people unable to see their governments’ actions clearly. Politicians, noted Chung, often take advantage of this blindness, using nationalism to further their political aims at the expense of the greater good.

Chung nevertheless hoped that future cooperation and increased trust in the region would “transform the structure of the region from a seemingly never-ending loop of mistrust and confrontation to a virtuous circle of peace and prosperity." This should, he said, be the “the inheritance that we pass on to our children. It is the endowment they deserve.”

Published: Monday, May 05, 2014