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42. How to save the WTO with more flexible trading rules
- Author:
- Robert Z. Lawrence
- Publication Date:
- 12-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The clash between the Western and Chinese economic systems is threatening the world trading system, with countries increasingly using trade as a tool to coerce other countries. It is imperative to return to an inclusive, rules-based international trading order before the problems in trade spill over into the other geopolitical frictions that plague the world. This Policy Brief argues for a system that steers between two extremes that have emerged: “deep integration,” a single undertaking in which all members of the World Trade Organization (WTO) are expected to adhere to all rules regardless of their preferences and circumstances, and “decoupling,” in which groups of countries centered on the United States or China limit trade with each other. Instead, Lawrence says, the world trading system should have a “variable geometry” that allows open plurilateral agreements among self-selected members that desire deeper integration on particular issues while allowing members that prefer to implement distinctive domestic policies to remain outside some of these agreements and follow a set of more limited rules. The universal rules would permit diversity but still promote trade between all countries through measures such as safeguards that would deal mainly with the most harmful systemic frictions. If the multilateral system is not up to the task of creating such an approach, it is likely to lose its relevance as differentiated regional or topic groupings become increasingly dominant.
- Topic:
- Economics, International Trade and Finance, World Trade Organization, Reform, and Trade
- Political Geography:
- Global Focus
43. EU carbon border adjustment mechanism faces many challenges
- Author:
- Gary Clyde Hufbauer, Jeffrey J. Schott, Megan Hogan, and Jisun Kim
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- This Policy Brief assesses the evolving EU Emissions Trading System and EU carbon border adjustment mechanism (CBAM) and explains objections within Europe and from major trading countries likely to be affected by the proposed CBAM import levies. While EU officials have sought to ensure that the CBAM is consistent with obligations under the World Trade Organization (WTO), key aspects of the CBAM could violate WTO rules and are likely to be contested, taking years to play out. Meanwhile, several other countries will adopt new carbon-inspired border restrictions, adding to global trade frictions. Major carbon-emitting countries, therefore, need to act cooperatively instead of unilaterally to both advance the fight against climate change and update the rules-based global trading system. Two-thirds of greenhouse gas emissions result from nontraded activities, such as road transport, electricity generation, and home and office heating. Countries can curb emissions in these activities, while developing guidelines for carbon abatement in traded sectors.
- Topic:
- Climate Change, Economics, International Trade and Finance, World Trade Organization, European Union, and Carbon Emissions
- Political Geography:
- Europe
44. CHIPS Act will spur US production but not foreclose China
- Author:
- Gary Clyde Hufbauer and Megan Hogan
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The CHIPS and Science Act, export controls, and agreements with allied countries will accomplish many of their multiple objectives. More US semiconductor fabrication plants will be built, US R&D will be accelerated, and advanced chips and chip-making machines will be denied to China, Russia, and other adversaries. However, the Act will not make a material difference to US chip supplies in the next two or three years. Slower economic growth has already tipped the chips market in favor of ample supplies. While collective measures have inflicted considerable short-term pain on China, causing a sharp drop in the fortunes of its high-tech firms, China will respond by redoubling its self-sufficiency programs. The United States, however, should not mimic China in pursuing self-sufficiency, as US self-sufficiency is an illusion. The United States currently exports high-value chips and imports low-value chips, so increasing self-sufficiency would require the United States to prioritize basic chip production at the same time it is supposed to be competing with China in advanced chip production. Continuing to prioritize advanced chip production—where the United States has a clear advantage—is the most efficient course of action.
- Topic:
- Economics, Legislation, Exports, Production, and Semiconductors
- Political Geography:
- China, Asia, and United States of America
45. Soaring demand is driving double-digit import price inflation in the United States
- Author:
- Caroline Freund
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- At a time of soaring price increases in the United States, inflation in the US import sector has been soaring the most. Import price inflation in the first half of 2022 was in the double digits, above US consumer price index and personal consumption expenditures inflation. Excess demand for certain imported goods is playing a big role, but so are supply shortages caused by temporary business closures overseas and shipping delays associated with the COVID-19 pandemic. Correctly identifying the culprit for misaligned demand and supply, and hence rising prices, is central to understanding the type and extent of policy intervention needed. Using movements in prices and quantities of specific goods, the analysis presented in this Policy Brief shows that the increase in import price inflation has been driven to the same or a greater extent by demand compared with supply constraints. The results have important implications for policies to help reduce the supply and demand imbalance and thus tame inflation.
- Topic:
- Economics, Inflation, COVID-19, Imports, and Supply and Demand
- Political Geography:
- North America and United States of America
46. Is South Korea vulnerable to EU and US carbon border restrictions?
- Author:
- Jeffrey J. Schott and Megan Hogan
- Publication Date:
- 07-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- South Korean exports, especially carbon-intensive products like steel, are increasingly vulnerable to both the European Union’s proposed carbon border adjustment mechanism (CBAM)—set to begin on January 1, 2023—and the proposed Clean Competition Act (CCA) before the US Congress. Schott and Hogan caution that Korean exporters should not count on Korea’s decade-old EU and US free trade agreements (FTAs), nor on the multilateral trading rules of the World Trade Organization (WTO), to protect them from new carbon-based import barriers in key foreign markets. The WTO and the FTAs have broad and loosely defined exemptions for environmental protection. Nor is Korea likely to be shielded by its own cap-and-trade emissions trading system (the K-ETS), because of extensive use of free allowances and large differences between EU and Korean carbon prices. While the threat the EU CBAM poses to Korean exports is imminent, passage of the CCA faces major legislative obstacles. But US imports of Korean steel and other carbon-intensive goods are still subject to climate-related duties at the US border under US unfair trade statutes. The US Department of Commerce has ruled that free allowances issued under the K-ETS (and EU ETS) are implicit subsidies that can be offset by countervailing duties. These charges are in addition to the harsh tariff-rate quotas on imported Korean steel applied under the “national security” authority of Section 232 of US trade law, which are more restrictive than measures imposed against European and other steel exporters. The authors suggest relaxing these US barriers, as they have been for shipments from Europe, in return for Korean participation in the nascent US-EU talks to establish a “Global Arrangement on Sustainable Steel and Aluminum.”
- Topic:
- Economics, International Trade and Finance, European Union, Exports, and Carbon Emissions
- Political Geography:
- Europe, Asia, South Korea, and United States of America
47. The online gig economy’s impact is not as big as many thought
- Author:
- Lee G. Branstetter
- Publication Date:
- 07-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The explosive global growth of online ride-hailing platforms raised concern (and, in some quarters, optimism) that similar growth in other platforms could rapidly disrupt traditional labor arrangements on a large scale in advanced economies. But the evidence to date suggests no significant changes in the overall importance of “gig” work in the US labor market nor a significant decline in the importance of traditional employment relationships. Online platforms may play a growing role (relative to traditional “brick-and-mortar” intermediaries) in connecting gig workers to their customers, but that alone does not guarantee a large increase in the importance of gig work. Branstetter reviews this evidence, noting the gaps in labor market data series that make the measurement of this phenomenon so difficult. Even if traditional employment relationships are not likely to decline significantly in the near future, the rise of online gig work nevertheless highlights longstanding inadequacies of labor market regulations, which recognize employees and truly independent contractors but struggle with the intermediate kinds of worker-firm relationships the online platforms enable. Branstetter summarizes proposals for regulating gig economy work and the lessons policymakers in South Korea and other economies can learn from the literature he reviews in this Policy Brief.
- Topic:
- Economics, Employment, Labor Market, and Gig Economy
- Political Geography:
- Global Focus
48. South Korea should prepare for its exposure to US-China technology tensions
- Author:
- Mary Lovely and Abigail Dahlman
- Publication Date:
- 07-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The stated goal of the US-led Indo-Pacific Economic Framework for Prosperity (IPEF) is to create standards that enhance and elevate regional trade and investment flows, but it is clearly aimed at reducing the role of China in global supply chains. As China is Korea’s largest trading partner, US policy discouraging Chinese participation in supply chains has immediate detrimental implications for Korean manufacturers. The United States is the second-most important destination for Korean exports. Given the values of these triangular trade flows, Lovely and Dahlman assess South Korea’s exposure to US demands to remove or reduce Chinese participation in the manufacture of exports destined for the US market. The reliance of the proposed framework on certain standards will likely reduce Chinese participation in IPEF trade networks. Korea may benefit from this trend, but IPEF could also increase production costs for Korean companies, especially in the electronics sector, a problem that would worsen if China retaliates against these companies. To reduce these risks, Korea might find it prudent to reduce its reliance on intermediate goods from China for products it produces for export to the United States. The Korean government should also seek to better understand its exposure to US–China trade tensions and diversify its trade relations. Korean firms should start preparing for supply chain disruptions, perhaps by making investments at home. Korea could also help other IPEF members reduce supply chain disruptions while addressing security concerns over China.
- Topic:
- Economics, Science and Technology, Supply Chains, and Competition
- Political Geography:
- China, Asia, South Korea, North America, and United States of America
49. China's CPTPP bid spurs South Korea to act on Asia-Pacific trade pacts
- Author:
- Jeffrey J. Schott
- Publication Date:
- 06-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- China’s sudden application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in September 2021 has broad implications for South Korea’s economic relations with China, Japan, and the United States. In the past, Korea frequently debated but invariably postponed deciding whether to participate in negotiations on the CPTPP, despite the substantial benefits to be gained from doing so. However, China’s application has prompted Korean officials to get off the fence and apply as well. As China moves to deepen its ties to regional partners, Korea needs to follow suit, complementing the ongoing implementation of the Regional Comprehensive Economic Partnership (RCEP) with expedited negotiations to join the CPTPP and participation in the US-led Indo-Pacific Economic Framework for Prosperity (IPEF). Korean participation in the RCEP, CPTPP, and IPEF is desirable and mutually reinforcing and should allow Korea to sustain its strong commercial interests in both the US and Chinese markets.
- Topic:
- Economics, International Trade and Finance, Treaties and Agreements, and Trade
- Political Geography:
- China, South Korea, and Asia-Pacific
50. The Assault of Austerity: How prevailing economic policy choices are a form of gender-based violence
- Author:
- Dana Abed and Fatimah Kelleher
- Publication Date:
- 11-2022
- Content Type:
- Policy Brief
- Institution:
- Oxfam Publishing
- Abstract:
- This briefing paper argues that austerity measures are a form of gender-based violence against women, girls and non-binary people, and lays out clear examples of how fiscal consolidation affects them. Its core argument is that ending austerity must be a priority. The policies that deliver austerity’s deadly consequences can no longer be marketed as the ‘logical’ and ‘inevitable’ economic options that they have been for decades, and certainly not by any government that claims a commitment to gender equality or ending gender-based violence. Austerity takes away from those who need it most, while ignoring common-sense ways to improve both revenue and prosperity. The paper goes on to share feminist economic alternatives offer pathways that can protect the Majority World from completely avoidable suffering.
- Topic:
- Economics, Gender Based Violence, Identity, and Gender
- Political Geography:
- Global Focus
51. The Effects of Online Export Promotion Policies for SMEs in Korea
- Author:
- Kyong Hyun Koo
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- This study explores the impact of participating in five major online export support programs currently being implemented by the Ministry of SMEs and Startups on online exports of SMEs in 2018-20. The main findings show that the online export support program appear to significantly have improved the online export-related performance of participating SMEs in a short period of time. In addition, the online export support program’s online export enhancement effect tend to be relatively greater when the participating SMEs have relatively little experience with online export and low sales volume. Manufacturers also appear to benefit from support programs more than resellers. In summary, the findings suggest that Korea's online export support policy has had a significant impact in providing incentives for SMEs to start/increase online exporting.
- Topic:
- Economics, Business, Exports, and Manufacturing
- Political Geography:
- Asia and South Korea
52. The Emergence of African Continental Free Trade Area Agreement and Lessons from the Asia-Pacific Trade Agreement
- Author:
- Samuel Igbatayo
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- Africa’s regional integration agenda arrived at a cross roads in 2019, with the adoption of the African Continental Free Trade Area (AfCFTA) agreement. The AfCFTA framework came into force on 30th May, 2019, with its ratification by The Gambia, which brought the total number of African Union (AU) member state ratifications to twenty-two, the minimum threshold for AfCFTA implementation (Baker McKenzie 2019). As of May; 2022, forty-three of the 55 African countries have ratified the AfCFTA agreement (African Union 2018). The 12th Extraordinary Session of the Assembly of the African Union in Niamey on 7th July; 2019, witnessed the launching of AfCFTA’s operational phase, which is governed by five instruments, namely: the rules of origin, the online negotiating forum, the monitoring and elimination of non-tariff barriers; a digital payment system and the African Trade Observatory. In addition, the beginning of trade under the terms of the agreement was set for July 1, 2020 (TRALAC 2020). A free trade agreement (FTA) can be aptly described as a pact between two or more countries on areas in which they agree to lift most or all tariffs, and other barriers to imports and exports among them (Barone 2019). Under a free trade framework, goods and services can be traded across international borders, with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange. The theory of free trade Agreements is rooted in classical economics, dating back to the era of Adam Smith. During this period, David Ricardo (1772-1823), a British political economist, was acknowledged with pioneering thoughts on free trade as a key instrument for wealth accumulation. The evolution of preferential trade agreements is traceable to the rise of European countries after World War II, with the establishment of the European Coal and Steel Community in 1951, a development that eventually culminated in the creation of the European Union (EU) (Johnston 2019). Spurred by the success of regional bodies with free trade agreements and Africa’s poor trading performance; estimated at a paltry 3% of annual global trade, the African Union embarked upon the creation of the AfCFTA agreement as a tool for Intra-Africa trade and regional integration.
- Topic:
- Economics, Treaties and Agreements, Regional Integration, and Free Trade
- Political Geography:
- Africa and Asia-Pacific
53. Understanding Hainan Free Trade Port: China's Efforts to Explore High-level Opening-up
- Author:
- Wenfeng Wei
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- On 13 April 2018, upon the 30th anniversary of Hainan province, Chinese President Xi Jinping announced to build Hainan into a free trade port. According to the Master Plan for the Construction of the Hainan Free Trade Port released by the State Council on 1 June 2020, China aims to build this southern island province into a high-level free trade port with global influence by the middle of the century. As China's largest special economic zone, Hainan is expected to become the frontline of China's integration into the global economic system. Noting that the world is facing a new round of major development, changes and adjustment, with protectionism and unilateralism on the rise and economic globalization facing greater headwinds, it was also a strategic decision of Chinese authorities based on the domestic and international landscapes. As such, Hainan Free Trade Port (HNFTP) is more than a regional development initiative, and it has a much bigger role to play in China’s reform and opening endeavors.
- Topic:
- Development, Economics, Special Economic Zones, and Free Trade
- Political Geography:
- China and Asia
54. Digital Divide in Latin America and Opportunities for South Korea-Spain Cooperation
- Author:
- Angela Sagnella
- Publication Date:
- 09-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- The purpose of this brief report is to sketch the current characteristics of the digital divide in Latin America, especially following the effects generated by the spread of the Covid-19 pandemic, in an attempt to understand its crucial aspects and possible outlooks. In this regard, South Korea-Spain future cooperation on digitalization in Latin America will be discussed, as the two countries – by virtue of the long diplomatic tradition that unites them – are developing new horizons of cooperation to fill digital gaps in Latin America.
- Topic:
- Economics, Science and Technology, COVID-19, and Digital Cooperation
- Political Geography:
- South Korea, Latin America, and Spain
55. The Export Effect of Servitization of Manufacturing
- Author:
- Hyunsoo Kim, Jungu Kang, Hyeyoon Keum, and Jae Wook Jung
- Publication Date:
- 09-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- This study examines the status and characteristics of Korea’s servitization of manufacturing and its impact on business performance and exports. In particular, we focus on servitization in manufacturing, which can be seen as a part of servicification in manufacturing. It is the phenomenon of manufacturing firms producing more services as final goods and provide them to the market with their products. Looking at the status of servitization in the manufacturing sectors focusing on the service sales generated by manufacturing firms, the servitization in manufacturing in Korea has gradually increased. Sales in service sectors, which stood at 4.5% of the total sales of manufacturing firms in 2012, surged to 15.9% in 2017, and then decreased to 6.9% in 2019. Based on the stylized fact that servitization in manufacturing in Korea has gradually increased, we empirically analyze the effect of servitization in manufacturing on the business performances and exports. The result suggets that the servitization in manufacturing is progressing in the direction of improving firm’s productivity, profitability, and exports.
- Topic:
- Economics, Business, Manufacturing, and Services
- Political Geography:
- Asia and South Korea
56. Korea's Economic Presence in Iran under Trump and Its Prospects during the Biden Presidency
- Author:
- Shirzad Azad
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- On July 14, 2015, when Iran and the 5+1 group (the United States, Russia, China, France, Britain, and Germany) ultimately agreed over the Joint Comprehensive Plan of Action (JCPOA), the Republic of Korea (ROK) was practically one of the top three trade partners of the Persian Gulf country. In early May 2016 and only a few months after the nuclear deal was carried through, the then Korean President, Park Geun-hye, made an official visit to Iran where the two countries vowed to ratchet up their economic relations from roughly $6 billion to more than $18 billion in the years to come. Accompanied by “the largest business delegation in the history of Korean presidential trips,” Park’s high-profile trip to Iran persuaded many interested experts and observers to believe that the East Asian country was really determined to shore up its economic weight in Iran by drawing certain policies relevant to the long-term presence of Korean businesses in the Middle Eastern country (Choi 2016). Despite all those upbeat expectations about the ROK’s future economic and technological role in Iran, however, various data and statistics coming out indicate that over the past several years nearly all well-known Korean brands and products have increasingly lost their market share in the Mideast country to brands and goods supplied by other competitors. As a matter of fact, in the late 1990s and early 2000s the East Asian nation emerged as one of the Persian Gulf country’s top trading partners in the world, outstripping a number of Tehran’s traditional trading partners from the West. And while Korea managed to even expand its economic presence in Iran in the heydays of sundry international sanctions levied against the Middle Eastern country over its contentious nuclear program a couple of years before the JCPOA was eventually agreed in 2015, the ROK has been doing relatively poor in Iran during the past years (Azad 2018). Such lackadaisical performance, epitomized by abandoning the long-established pattern of significant trade in energy with Iran, has critically influenced a sharp decline in the total volume of two-way commerce between the two countries. While the plummeting share of Korean brands and goods in Iranian markets had indubitably something to do with certain policies pursued by the Moon Jae-in-led Korean government, however, the main culprit turned out to be the Trump administration’s unilateral withdrawal from the nuclear deal in May 2018. The crippling sanctions which Washington under Trump subsequently imposed on Iran played a pivotal role in reshaping the scope and size of Korean commercial connections to the Persian Gulf country, though some unprecedented diplomatic and political troubles involving Seoul and Tehran during the past years have also had a lot to do with those punitive economic and financial measures targeting the Iranians. How did then the Koreans respond to those unique circumstances rendered largely by Trump’s approach toward the Persian Gulf country? What are going to be the prospects of a Biden administration’s policy shift for Korea’s economic performance in Iran? This study seeks to shed some light on Trump’s Iran policy with regard to Korea, its repercussions for the East Asian nation’s economic relationship with the Middle Eastern country, and potential solutions to chip away at those impediments under a Democrat administration in Washington led by Joe Biden.
- Topic:
- Foreign Policy, Economics, Donald Trump, JCPOA, and Joe Biden
- Political Geography:
- Iran, Asia, South Korea, and United States of America
57. Recent Marriage and Labor Supply Pattern of Young Chinese Women
- Author:
- Yoon Jae Ro and Jeonghwan Yun
- Publication Date:
- 09-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- In this paper, we examine the impact of a sibling gender on educational attainment, earnings, family formation for a recent cohort of women in China. Family characteristics such as number of siblings, sibling gender composition, and parents’ characteristics may play an important role in children’s life as the presence of a sibling can affect parents’ treatment of the remaining children. Especially male siblings can affect children’s outcome through various pathways as male sibling may pull parental investment of resources away from girls, because boys may be seen as the “higher return” investment (Becker, 1991). We investigate the effect of having a (male) sibling on a daughter by exploiting the change in fertility trend in China induced by the One Child Policy (OCP).
- Topic:
- Economics, Labor Issues, Women, Marriage, Supply, and Gender
- Political Geography:
- China and Asia
58. Exchange Rate Predictability Based on Market Sentiments
- Author:
- Hyo Sang Kim, Eunjung Kang, Yuri Kim, Seongman Moon, and Huisu Jang
- Publication Date:
- 09-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- It is well-known that exchange rates are difficult to forecast using observed macro-fundamental variables. This discrepancy between economic theory and empirical results is called the Meese and Rogoff puzzle. The purpose of this study is to address this puzzle from a new approach. Rather than pursuing a linkage between macro-fundamentals and exchange rates, we focus on the market sentiment index as a factor that could possibly enhance exchange rate predictability. The analysis folds into three phases. First, we conducted an assessment of the traditional exchange rate predictability model, as well as the augmented traditional model incorporating the market sentiment index. Second, we predicted the exchange rate by applying the market sentiment index, based on the contrarian opinion investment strategy commonly used by foreign exchange dealers. Finally, we analyzed if the machine learning model incorporating both economic fundamentals and market sentiment index could enhance the predictability of the exchange rate.
- Topic:
- Economics, Markets, and Exchange Rates
- Political Geography:
- Global Focus
59. Development of the IT Industry and Structural Transformation: Focused on IT Cooperation with Russia, Kazakhstan and Uzbekistan
- Author:
- Minhyeon Jeong, Jiyoung Min, and Dongyeon Jeong
- Publication Date:
- 06-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- This study was designed as a primary study to analyze the economic significance and potential of cooperation with Russia, Kazakhstan and Uzbekistan in the IT sector, and to derive implications for new directions between Korea and the three countries with the advent of the fourth industrial revolution era. The goal of the study is to discuss what the development of the IT industry means for the three economies, examine the characteristics of each country, and gain policy implications on how cooperation with Korea should proceed in the future. To this end, this study is consisted of the following four components. First, the economic significance of IT technology cooperation with Russia, Kazakhstan, and Uzbekistan is viewed from the perspective of structural transformation. Second, the effect of IT cooperation between Korea and Russia on the Russian economy is quantitatively estimated through the analytical framework of structural transformation. Third, to supplement the limitations of theoretical discussions and derive customized cooperation directions for each country, the current status and policies of the IT industry in the three countries are examined in detail. Fourth, IT technology subsectors promising for cooperation between Korea and Russia are identified, from the patent citation analysis and network analysis.
- Topic:
- Development, Economics, Science and Technology, Industry, and Information Technology
- Political Geography:
- Russia, Central Asia, Eurasia, Kazakhstan, and Uzbekistan
60. Korea’s Regional Cooperation and ODA Policy in Asia: Performance and Challenges
- Author:
- Aila Yoo and Yul Kwon
- Publication Date:
- 08-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- The COVID-19 pandemic and ongoing geopolitical conflicts have deteriorated socio-economic conditions all around the world. As developing countries in Asia have made enormous progress in economic and social development based on the stable ground for growth, the development gap within the region has also been expanded. In addition, the region’s socio-economic conditions have become worse after the pandemic. Along with the pandemic crisis, there are several issues that have negatively influenced the region’s sustainable growth, such as climate change and climate-related natural disasters, and conflicts. These multiple crises change the development needs in the region, and cannot be solved through the efforts of any sole country but must be tackled through regional cooperation. While Korea strengthens its strategic approach for regional economic cooperation to expand its partnership with emerging countries and its Official Development Assistance (ODA) volume is highly concentrated in Asia region, Korea still focuses on cooperation with each country based on priority countries’ Country Partnership Strategy (CPS) without any integrated regional cooperation strategy. Strengthening inclusive partnerships would be a key to reduce the development gap in the region, by supporting regional programs such as the ASEAN Connectivity and Mekong Subregion development projects. To improve policy coherence and tackle the region-wide problems, Korea should adopt an integrated regional cooperation approach by reflecting the characteristics of Asia. This study analyzes changes in the socio-economic conditions and development environment in the Asia region and provides policy implications for preparing regional cooperation strategy for Asia.
- Topic:
- Economics, Regional Cooperation, Partnerships, Economic Cooperation, and COVID-19
- Political Geography:
- Asia and South Korea