Finding a breakthrough in Asean
A book with an audacious title, “18 Reasons Why South Korea Will Never in Its Lifetime Catch Up With Japan” made a splash in Korea at a time when the country was teetering on a financial crisis. In the book, a businessman at a Japanese trading firm who has resided in Korea for 28 years listed an array of critical insights from Koreans’ drinking habits to their penchant for payola. He pointed out that without substantial changes in society’s standards and behavior, South Korea will never be able to beat Japan.
At the time, Japanese companies were watching the fast rise of Korea’s manufacturers with wary eyes. But the general belief was that despite technological advances, Korean corporate ethics and social practices lagged too far behind for Korean companies to pose any real threat.
But nobody in Japan was laughing in 2009 when the combined profits of Japan’s nine major electronics companies did not amount to half of Samsung Electronics’ earnings that year. Japan’s semiconductor industry, which once dominated 70 percent of the global market, collapsed. The last survivor was Elpida, which went bankrupt in 2012.
Japan greatly underestimated Korea.
But are we any better?
We regard the Association of Southeast Asian Nations (Asean) as underdeveloped and lagging behind us. Most consider Southeast Asian nations as holiday destinations rather than a serious business or trading partner.
But the 10-member Asean turns into a formidable power when its countries are united. Of Korea’s total external trade, worth $1.075 trillion last year, Asean’s share was 13 percent, or $135.3 billion, which was second after China’s 21 percent. The amount beats trade volume with the United States and Japan, as well as Europe’s $105.1 billion. Of Korea’s total trade surplus of $44 billion, 65 percent is owed to the Asean region.
The area is working fast toward the goal of becoming one community. But integration is no easy job. The European Union had a hard time before it finally evolved into the euro zone.
The vision of one great Europe - or the United States of Europe - was first floated by former British Prime Minister Winston Churchill. A British leader who was always obsessively defensive and confident of sovereignty bred the ambitious aspiration to save the continent from further wars.
Churchill, who endured World War II, thought the best way to keep the region from falling into another global war was to unite.
From this political and security-geared perspective, European nations took incremental steps toward union so that they could stop wasteful conflict and rebuild past economic might as a single economy. Euro-skeptics called the idea a fantasy. Former British Prime Minister Margaret Thatcher was at the forefront in Euro-skepticism. She declared that the attempt to unify Europe was “a classic utopian project, a monument to the vanity of intellectuals, a program whose inevitable destiny is failure.”
Yet after a great ordeal and lengthy efforts, a European Union with 28 member countries was born. Because of the EU precedent, the probability of Asean unity cannot be dismissed. The 10 countries are working under a road map to complete an Asean Economic Community by the end of next year. When realized, a single market with a gross domestic product of $3 trillion and a population of 640 million would be created. Once economic integration is complete, the region plans to move onto the next stage of unifying a political and security framework.
Under such circumstances, the Chinese economy, which once served as a fuel engine for Korea and the rest of the world, is losing steam. China’s economic growth is expected to hit a five-year low this year of 7.5 percent. The Chinese economy can no longer grow at a double-digit pace. Korea must quickly seek out a new partner for growth in commerce.
George Friedman, an American political scientist and the CEO of private intelligence think tank Stratfor, advises attention beyond China - or Post-China 16 - or countries best suited to succeed China as the world’s low-cost and export-oriented economy hub. Many of the fastest-moving labor-intensive markets are in Southeast Asia, like Indonesia, Vietnam, and Myanmar.
South Korea is best qualified to reap fruit in this promise land. It’s not just because Southeast Asians love Korean entertainers and pop culture. Southeast Asians have sincere admiration for Korea’s rags-to-riches experience and success. They are eager to learn from public-sector organizations and digitalized public services. The Korean government is also happy share its knowledge.
Since it started training programs for foreign government officials, the Korea International Cooperation Agency (Koica) has received over 49,000 visitors to Korea. Of them, Asians account for 51 percent, or 24,000. They all said they have learned a great deal in Korea. We should not waste such valuable human infrastructure. We should not devote all our diplomatic resources on the four global powers. Asean requires equally eager attention.
JoongAng Ilbo, Dec. 12, Page 32
*The author is a senior writer on international affairs at the JoongAng Ilbo.
by Nam Jeong-ho