&#91VIEWPOINT&#93Mr. Roh, broaden your thinking

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[VIEWPOINT]Mr. Roh, broaden your thinking

I was very disappointed after I read that the transition team of President-elect Roh Moo-hyun planned to establish a research and development complex to focus on information technology in the Songdo area of Incheon. It will be a major part of the project to develop Korea into a Northeast Asian economic hub. The team should reexamine that plan.

Over the last decade, economists have studied plans to develop Korea into the center of Northeast Asia's economic activities from various points of view. Some of the plans stressed that the future economic development of the country should be logistics-oriented, finance-centered, information technology-led and culture-oriented. The proposals vary widely, but they all start from a critical view of the new circumstances facing the Korean economy in the 21st century. Now the Chinese economy is growing strongly and emerging as a new engine of the Northeast Asian region. That could help Korea grow strongly as well and become a developed country. Korea could also be pushed into the margins of Northeast Asian economies if it is tempted to go for a high income in short period of time.

Those scenarios show that Korea needs a new strategy for its economic development as the "age of China" unfolds. The new strategy will require economic development led by service industries rather than manufacturing. In that strategy, Korea would develop knowledge-based industries such as logistics, finance, information technology, research and development and culture, to create high value added and also to lead manufacturing into higher value-added areas. In order to make that strategy successful, Korea should, first, focus on development of service industries that would support the development of China's manufacturing and economy. Second, Korea should attract competitive multinational services companies.

Many of the plans to develop Korea into a hub of the Northeast Asian economy sound reasonable on paper, but we need to consider how to meld the best elements of all the plans and rank them in priorities. Then we have to ensure that we can actually put them into practice.

One critical element of all the plans is that we develop a world-competitive business climate here in order to attract multinational companies and encourage them to put down roots in Korea. That also means that we need to attract the best of the world's managerial talent here; in order to induce them to come, we have to have good living conditions for them. Those are difficult issues that will require broad reforms in Korea's economy and society. Is that really possible?

Here are the solutions to the two problems. The solution to the first problem, choosing the right plan, is to implement them all simultaneously under a bigger general plan. The plans are complementary, and working on them simultaneously will represent a new strategy for Korea's economic development. As for the second issue, we have to look at the alternative to those difficult general reforms, which is economic stagnation. In other words, we have no alternative but to conduct long-term reforms of our society and economy, even if it takes more than a decade, to support the goal of becoming an economic hub. Not to do so is as good as giving up Korea's economic growth. If the president leads such reforms, Koreans will follow.

The Roh Moo-hyun administration should consider those problems when it develops a plan to develop Korea into a hub of the Northeast Asian economy. Developing Korea into the center of the region is the only strategy for Korea to survive in the 21st century. The transition team's plans to set up a research and development complex focusing on the information technology industry is a good one, but it is too narrow. The new administration should set up a plan covering logistics, finance and business as well as information technology.

* The writer is the vice chairman of the Korea National Committee for Pacific Economic Cooperation.


by Young Soo-gil
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