Forecasting 2018: Economic and Political Challenges in Korea and the Asia-Pacific Region

February Monthly Luncheon Event

From left: Michael Breen, H.E. Vikram Doraiswami, Peter Pae, and Dr. John Delury

Asia Society Korea held its first Monthly Luncheon of 2018 where it was announced that Dr. Hong-Koo Lee will be the Honorary Chairman in the absence of Mr. Dong-Bin Shin. Lee was quick to stress that all upcoming events and programs will be running as planned; furthermore, he expressed his delight at how well the PyeongChang Olympics are going, and how it is helping to ease tensions on the peninsula.

Lee has been a part of Asia Society for more than forty years. He was keen to point out that the website will continue to be loaded with more articles from a diverse range of contributors who understand the situation in the Koreas. Additionally, he noted the importance of Asia Society Korea in contributing to the globalization of South Korea. While acknowledging that problems still persist domestically, he stated that work and cooperation with the international community will lead to a brighter future. He finished by noting that Asia Society Korea is promoting this trend by bringing together distinguished members of the global community who all share the goal of improved peace in mind.

After the Honorary Chairman’s message, an esteemed panel consisting of H.E. Vikram Doraiswami (Ambassador, Embassy of India), Mr. Peter Pae (Seoul Bureau Chief, Bloomberg News), and Dr. John Delury (Associate Professor, Yonsei University) sat down to discuss the day’s topic: “Forecasting 2018: Economic and Political Challenges in Korea and the Asia-Pacific Region”. The panel was moderated by Michael Breen (CEO, Insight Communication Consultants).

Dr. John Delury began the discussion with his opinions on whether President Moon’s popularity will continue after it peaked at 80 percent. The news of a drop to around 60 percent showed that captured conservatives had moved back across party lines, and his popularity relies on the younger generation in their twenties and thirties whose opinions are not as straightforward as the media sometimes argues. Delury believes Moon’s success relies on his ability to understand what this younger group wants, and the primary metric will revolve around domestic issues.

Second, H.E. Vikram Doraiswami talked about the complicacies of free-trade, and the difficulties this places on South Korea when finding leverage with the U.S. and China. Despite its relatively small population, he called South Korea a premium market due to the high level of consumption. For instance, coffee exporters don’t look at population sizes but focus on markets like South Korea, which is one of its top 10 global consumers. His verdict was for Korea to broaden its options and look at places such as South America and India, which are relatively under-tapped.    
Doraiswami was also optimistic that South Korea and Japan can forge positive relations moving forward; however, Delury was more skeptical about progress as long as President Abe remains in power. He noted that President Moon opposes frozen relations like we saw under the Park Administration, but suggested significant change will not be possible until Abe leaves office.

Mike Breen then posed Peter Pae a question about whether we’ll see a Fourth Industrial Revolution in South Korea. Pae noted the government’s attempts to regulate the chaebol’s control over the South Korean market, and foster the ability for small start-up companies to grow. Unlike other areas of the world, for example Silicon Valley, Chaebols restrict the venture capital industry, and the only way a Fourth Industrial Revolution will occur is if the smaller companies can become independent and receive funding that will allow them to grow over time. In summary, Pae doesn’t believe this is happening yet, but perhaps Moon’s Administration is the first incremental step.

Finally, Doraiswami played down reports that U.S. Vice President Pence was rude to North Korea, or that the South Koreans were wrong to sit him at the same table with North Korean officials as media spin due to the fact no official complaints were lodged. Delury added that he sees talks, not negotiations, between the U.S. and North Korea as a possibility in the near future by highlighting both the cumulative signals and President Trump’s willingness to keep the door open. Importantly, he noted Moon has now become the bridge between Trump and Kim rather than Xi Jinping.