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Is Pax Sinica Possible?

July 30, 2021

Chinese President Xi Jinping seems to want to build a Pax Sinica, which would compete with – and even replace – the Pax Americana that has prevailed since the end of World War II. But realizing this vision will require China to overcome some daunting internal and external challenges.

SEOUL – For nearly a decade, Chinese President Xi Jinping has been promising to deliver “the great rejuvenation of the Chinese nation.” This promise – which he dubbed the China Dream – took a clearer form with the introduction of the two centenary goals: building a “moderately prosperous society” by 2021 (the centennial of the founding of the Communist Party of China, CPC) and becoming a “modern socialist country” by 2049 (100 years

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South Korea’s Health-Centered Development Model

June 29, 2021

The COVID-19 pandemic is an unprecedented challenge that underscores both the fundamental value of health and the importance of well-functioning and resilient universal health coverage. South Korea’s success in building such a system should encourage today’s lower-income countries to make a similar commitment.

SEOUL – The COVID-19 pandemic has exposed inequalities and weaknesses in health systems both within and across countries. Most countries initially responded poorly to the crisis, and suffered heavy human and economic losses. But some in East Asia – including South Korea – performed relatively well. In fact, South Korea’s decades of efforts to build a resilient universal health-care system provide a model for

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Building an Inclusive Digital Future

June 8, 2021

Now that the COVID-19 pandemic has hastened the arrival of the digital economy, policymakers around the world must do more to ensure that the benefits and opportunities are available to everyone. It’s a challenge that calls for new governance frameworks within countries and at the global level.

SEOUL – The COVID-19 pandemic has accelerated the transition to a digital economy, which will hold the key to future growth and opportunities. That is why, as we prepare for the post-pandemic era, we must acknowledge that the digital economy’s potentially limitless benefits will not be equally distributed unless we take the right steps now.
Making America Global Again

Al

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Is the Asian Century Really Here?

April 1, 2021

Asia is already a major global power, and some regard the ongoing COVID-19 crisis as a tipping point that will accelerate the region’s resurgence. But the twenty-first century will really belong to Asia only if it can develop unified, collective leadership.

SEOUL – The COVID-19 pandemic has not been the West’s finest hour. Most Western governments failed to contain the deadly outbreak and the resulting economic damage effectively. And by pursuing inward-looking and protectionist policies, they have contributed relatively little to an effective international response to the coronavirus.

The End of the Oil Age

PS OnPoint

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Will East Asia Win the Pandemic?

February 3, 2021

Investors and analysts seem confident that East Asian countries will be able to keep COVID-19 in check, achieve robust economic recovery, and maintain stimulus measures, leading to ever-higher corporate profits and, in turn, stock prices. Perhaps they should take a cold shower.

SEOUL – East Asian countries have done remarkably well in managing the COVID-19 pandemic and limiting its economic repercussions. But, given that significant risks and uncertainties remain, it is far too soon to say that the region will emerge from the crisis as a global winner.

Multilateral Cooperation for Global Recovery

Biden Goes Big

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The Limits of the RCEP

December 4, 2020

The new Regional Comprehensive Economic Partnership, signed last month by 15 Asia-Pacific countries, represents a firm repudiation of the protectionism that has been gaining ground in recent years. But it cannot save the multilateral trading system – and might undermine it further.

SEOUL – Last month, 15 Asia-Pacific countries signed the Regional Comprehensive Economic Partnership. The occasion marked what might be the most significant economic achievement since the COVID-19 crisis began. And yet the RCEP – or, indeed, Asia – cannot save the ailing multilateral trading system alone.

Can Joe Biden’s America Be Trusted?

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The Perils of Big COVID Government in Asia

October 1, 2020

During a large and complex crisis like the COVID-19 pandemic, government’s role naturally grows – and so do the risks of unproductive spending and abuses of power. That is why, as Asian economies seek to contain COVID-19 and its economic impacts, they must also contain their own governments.

SEOUL – Asia is home to many exemplars of small but effective government, countries where sound policies and strong institutions underpin economic stability and robust growth. But during the COVID-19 crisis, many are pursuing expansive macroeconomic interventions and implementing measures that infringe on privacy. They are perched on the edge of a slippery slope.

The Way We Could Live Now

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How South Korea Built a Health System to Beat COVID-19

August 4, 2020

Although South Korea faced one of the world’s largest initial COVID-19 outbreaks outside China, it managed to contain the virus quickly, without imposing a nationwide lockdown. Decades of working toward universal health care paid off, and created a model that today’s developing countries should emulate.

SEOUL – The importance of a reliable and widely accessible health-care system is never more apparent than during a pandemic. It is now painfully clear that countries cannot pursue economic development, and assume that the health system will develop in tandem. Instead, they must do what South Korea did: devise targeted strategies for effective health-care delivery that go hand in hand with broader social- and

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An Interview with Lee Jong-Wha

June 9, 2020

This week, Project Syndicate catches up with Lee Jong-Wha, a former chief economist at the Asian Development Bank, a former senior economic adviser to the South Korean president, and a professor of economics at Korea University.

Project Syndicate: You’ve called for the G20 to lead a coordinated response – including fiscal, financial, and trade measures – to the COVID-19 crisis. What principles or policies should form the “the pillars of economic-policy coordination”? If the United States and China refuse to abandon their “utterly counter-productive blame game,” can the rest of the world step in to offset the damage?Lee Jong-Wha: International coordination can play an important role in limiting a negative shock’s

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Building South Korea’s Post-Pandemic Economy

May 26, 2020

South Korea has rightly received international acclaim for its COVID-19 response. It should now apply the same ambition and acumen to lay the groundwork for a more productive, sustainable, and inclusive economy.

SEOUL – South Korea seems to be winning the battle against COVID-19. It has been recording little more than a handful of new cases per day for weeks, and though it is now preparing for that rate to rise, following the relaxation of social-distancing guidelines, it seems likely to remain in control of the outbreak. The bigger question is whether it can contain the economic fallout.

The Lonesome Death of Hong Kong

PS OnPoint

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A Coordinated Response to COVID-19

March 25, 2020

Short of a vaccine, international cooperation is our best weapon against a deadly virus like COVID-19 – and our best defense against global economic collapse. As in the wake of the 2008 global financial crisis, the G20 should take the lead.

NEW YORK – Within just a few months, the COVID-19 coronavirus has enveloped the world, infecting 435,000 people, killing more than 19,000, and overwhelming even advanced economies’ health systems. Once the shock hits vulnerable low-income countries, the already-high human and economic costs will rise further – for the entire world. The only chance we have of limiting the fallout is to work together.
Insuring the Survival of Post-Pandemic Economies

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How to Prevent the Japanification of East Asia’s Economies

January 24, 2020

Hong Kong, Singapore, South Korea, and Taiwan were long hailed for their economic dynamism, but now risk following the low-growth path of Japan over the last three decades. To avoid this fate, their governments must adopt a comprehensive set of policies to tackle structural weaknesses.

NEW YORK – At the annual meeting of the American Economic Association (AEA) in early January, former US Federal Reserve Chair Janet Yellen, former European Central Bank President Mario Draghi, and eminent economists warned that Western economies risked “Japanification”: a future of sluggish growth, low inflation, and perpetually low interest rates. Yet, surprising as it may seem, this malaise also threatens East Asia.
How a

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East Asia’s Political Vulnerability

November 27, 2019

East Asia has a long tradition of forward-thinking policymaking. At a time of serious economic, political, and social challenges, the region must uphold that tradition – or Latin America’s tumultuous present may be its future.

SEOUL – Popular discontent is fueling protest and paralysis across Latin America. If East Asia isn’t careful, it could be next.In Ecuador, protests against anti-austerity measures, including the reduction of fuel subsidies, forced President Lenín Moreno to declare a state of emergency. In Chile, it was a modest increase in Santiago’s metro fares that triggered large-scale demonstrations, which soon evolved to take aim at inequality and weaknesses in the education and pension systems.

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Saving the Japan-South Korea Relationship

September 30, 2019

Although both countries have long been well-consolidated democracies, historical and territorial disputes have consistently marred bilateral relations. But today, their relationship may be at its lowest point since diplomatic ties were established in 1965.

SEOUL – Japan and South Korea have never been easy partners. Although both have long been well-consolidated democracies, historical and territorial disputes have consistently marred bilateral relations. But today, their relationship may be at its lowest point since diplomatic ties were established in 1965.
The Constitution Won’t Save American Democracy

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Populism Takes Asia

July 30, 2019

Despite the damage populists have done in the West, Asian voters are increasingly falling for the likes of India’s Narendra Modi, Indonesia’s Joko Widodo, and the Philippines’ Rodrigo Duterte. How can responsible Asian leaders take the wind out of populists’ sails?

SEOUL – The rise of populism across the West in recent years has been the subject of countless discussions, and for good reason: populists’ misguided policies often have severely adverse political and economic consequences. Now, those risks are coming to Asia.
Their Faintest Hour

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Facebook’s Libra Must Be Stopped

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A Practical Approach to North Korean Denuclearization

May 29, 2019

A deal to eliminate all North Korean nuclear and missile capabilities, in exchange for the removal of all sanctions, isn’t immediately realistic. A more practical approach would offer Kim Jong-un’s regime partial sanctions relief and inter-Korean economic cooperation in exchange for concrete, verifiable steps toward denuclearization.

SEOUL – The path to peace on the Korean Peninsula remains as perilous as ever. After a second summit between US President Donald Trump and North Korean leader Kim Jong-un in Hanoi in February produced no agreement, tensions have escalated, raising – yet again – concerns about a military confrontation.
Game of EU Thrones

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Investing in Inclusive Growth

March 26, 2019

An inclusive labor market is a prerequisite for inclusive growth. That’s why policymakers should be making education and skills development for all workers a top priority, rather than embracing protectionism or excessive social-welfare spending.

SEOUL – Inequality has skyrocketed in recent decades, and those who have not shared in the fruits of economic growth and development are becoming increasingly frustrated. Some political leaders have responded to rising public discontent with massive social-welfare programs or beggar-thy-neighbor protectionism. That is the wrong prescription.

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Lessons of East Asia’s Human-Capital Development

January 29, 2019

Given the effect of human capital on national productive and development capacities, developing countries should be placing a high priority on boosting human capital. The experience of East Asia’s prosperous economies holds valuable lessons.

SEOUL – Nelson Mandela once said, “Education is the most powerful weapon which you can use to change the world.” Education does not just enable individuals to improve their lot in life; it enriches an economy’s human capital, which is vital to prosperity and social progress.

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Nowhere is the value of human capital to development more

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Saving South Korea’s Economy

November 19, 2018

South Koreans are now focused less on developments in North Korea and more on their own economic concerns. Addressing those concerns – and thus ensuring continued support for inter-Korean cooperation – will require practical solutions to structural issues, not more redistributive policies.

SEOUL – Since taking office in May 2017, South Korean President Moon Jae-in has worked hard to secure a détente on the Korean Peninsula. He has met with North Korean leader Kim Jong-un three times this year, and agreed to convert the Korean Armistice Agreement into a full peace treaty, improve inter-Korean exchange and cooperation, and work toward “complete denuclearization” on the peninsula. On the economic front, however, Moon has been less

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Education in the Age of Automation

September 12, 2018

The race is on between technology and education. The outcome will determine whether the opportunities presented by major innovations are seized, and whether the benefits of progress are widely shared.

SEOUL – As digital technologies and automation have advanced, fears about workers’ futures have increased. But, the end result does not have to be negative. The key is education.

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Melanie Stetson Freeman/The Christian Science Monitor via Getty Images

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Already, robots are taking over a growing number of routine and repetitive tasks, putting workers in some sectors under serious pressure. In South Korea, which has the world’s

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Can North Korea Be the Next Vietnam?

July 26, 2018

In 1986, Vietnam initiated the “Đổi Mới,” a set of economic reforms that resulted in the creation of a market economy under the firm rule of the Communist Party. North Korea has what it needs to achieve a similar transformation, but it must embrace full denuclearization first.

SEOUL – After decades of deadlock, there seems finally to be some diplomatic movement on the Korean Peninsula. The June summit between Kim Jong-un and Donald Trump – the first between a North Korean leader and a sitting US president – produced a joint statement in which Kim agreed to complete denuclearization of the Korean Peninsula, in exchange for security guarantees from Trump.

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Making the Most of Asia’s Aging Populations

May 29, 2018

Rapid population aging poses a serious threat to Asia’s long-term economic prospects. But, with the right policies, Asian economies can mitigate the risks of this demographic trend and capitalize on their “silver dividend” to become more productive, resilient, and dynamic than ever.

SEOUL – Asia is aging fast: by 2040, 16% of the region’s population will be older than 65, more than double the 7.8% share in 2015. While the rise in healthy life expectancy is a positive development, this demographic shift poses a serious threat to many economies, which are already losing vitality.

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How Asia Should Respond to US Protectionism

March 29, 2018

The Trump administration seems set on pursuing a destructive protectionist path. But, rather than retaliate, Asian economies should use the threat of broader US tariffs as an opportunity to revamp their development models, thereby boosting their own prosperity and resilience, not to mention their positions as constructive global actors.
SEOUL – Over the last five decades or so, Asia’s economies have relied largely on an export-oriented development model to support rapid economic transformation and growth. But with US President Donald Trump fulfilling his promise to adopt a more protectionist approach to trade – an effort that could spur retaliatory measures by other countries – that model is coming under increasing strain.

The Year Ahead

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Asia’s Central Banks Should Prepare to Raise Interest Rates

January 23, 2018

In the wake of the global economic crisis, Asia’s central banks, like their counterparts in the advanced economies, took on a leading role in supporting domestic growth. But, as the global economic recovery gains momentum, the time has come to begin tightening monetary policy.
SEOUL – Financial markets around Asia are preparing for a Goldilocks economy in 2018 – not too hot, not too cold, with strong growth and stable prices. The region’s export-oriented emerging economies are benefiting from the recovery in global trade, while its largest players – China, Japan, and India – remain dynamic. Throughout the region, accelerating economic growth, together with positive corporate earnings expectations and persistent capital inflows, are driving up stock prices. And inflation

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Inequality Comes to Asia

November 20, 2017

As income inequality becomes increasingly entrenched, it can undermine social cohesion and spur political instability. To avoid such an outcome, Asian countries need to change the rules of the game, providing opportunities for youth, regardless of their background, to ascend the income ladder.
SEOUL – From China to India, Asian countries’ rapid economic expansion has lifted hundreds of millions of people out of poverty in recent decades. Yet the income distribution has lately worsened, with inequality now potentially even more severe in Asia than in the developed economies of the West.

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South Korea’s Looming Crisis

October 2, 2017

In the 1990s, South Korea waited for a crisis to erupt before responding with necessary reforms. But now the country is confronting a new set of internal and external risks, which it should nip the bud, both by pursuing domestic economic reforms and by working with China and the US to defuse the North Korean nuclear threat.
SEOUL – Twenty years after the Asian financial crisis, South Korea seems to have learned its lesson, having taken great pains to strengthen its economic resilience. But now the country is confronting a new set of internal and external risks, which may foreshadow another major economic crisis – or worse. Given the ongoing nuclear crisis with North Korea, a new bout of economic tumult is the last thing the country needs.

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Planning for Korean Reunification

August 16, 2017

SEOUL – The long-simmering North Korean nuclear crisis has reached a near boiling point. Last month, the Hermit Kingdom launched two intercontinental ballistic missiles capable of hitting major US cities. The United Nations Security Council responded with a unanimous vote to impose new economic sanctions on the country – the most stringent yet – which would cut at least one third of its annual export revenue. Since then, North Korean leader Kim Jong-un and US President Donald Trump have been hurling escalating threats at each other.

At this point, it is impossible to say what will happen on the Korean Peninsula. For now, all the international community can really do is continue to leverage a combination of economic sanctions, military pressures, and diplomacy to try to

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Can J-nomics Save South Korea’s Economy?

May 19, 2017

SEOUL – South Korea’s new president, Moon Jae-in, a former human-rights lawyer representing the center-left Democratic Party, has his work cut out for him. Though North Korea’s increasingly provocative behavior will likely continue to dominate headlines, the success of Moon’s presidency will hinge largely upon his economic policies.

The good news for Moon is that both the global and South Korean economies are showing signs of recovery. Korean exports, led by semiconductors and petrochemicals, have recorded positive growth for sixth consecutive months. In April, total exports were 24% higher than a year earlier. The main stock price index has returned to its all-time high.

Of course, North Korea’s behavior, beyond its obvious security implications, has an impact on South

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The Sino-Korean Trade War Must End

March 22, 2017

SEOUL – South Korea has decided to deploy a US missile-defense system, and China is furious. Chinese leaders worry that the Terminal High Altitude Area Defense (THAAD) system will undermine its security and disrupt the regional strategic balance, by monitoring flights and missile launches in Chinese territory. But, as long as North Korea poses such an acute threat on the Korean Peninsula, China’s opposition to it is pointless – and highly destructive.

As the United States and South Korea rush to deploy THAAD before the South’s snap presidential election on May 9, China is ramping up economic sanctions, in the hope of compelling the next president to reconsider. Already, South Korea’s tourism, consumer goods, and entertainment industries have been hit hard.

Chinese travel agencies have suspended the sale of group tours to South Korea. And China has temporarily closed the 55 discount stores owned by the Lotte Group – South Korea’s fifth-largest conglomerate and the supplier of the land for the THAAD system – for supposed safety violations. Chinese media have issued threats that sanctions could be extended to other South Korean companies, like Samsung and Hyundai.

China is eager to take advantage of its position as South Korea’s largest trading partner, accounting for nearly one-quarter of its external trade, and main source of foreign tourism.

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Taming the Chaebols

January 19, 2017

SEOUL – The indictment of Lee Jae-yong, the heir apparent at Samsung, is but the latest explosive development in the political scandal that has been rocking South Korea. Already, the National Assembly voted to impeach President Park Geun-hye, the daughter of former president Park Chung-hee, on December 9. The Constitutional Court now has six months to justify her permanent removal from office. Depending on its decision, a presidential election may be held in the next few months.

But, as Lee’s indictment demonstrates, more than the presidency is at stake in this crisis. At the heart of the scandal is the reciprocal relationship between politicians and the chaebols, South Korea’s giant family-owned conglomerates. If the government takes this opportunity to transform the economy’s chaebol-dominated structure, it would reshape the country’s economic future as well – for the better.

Park is accused of using her political influence to benefit her longtime confidante, Choi Soon-sil, who is charged with forcing the chaebols to funnel about 80 billion Korean won ($70 million) into two nonprofit cultural foundations that she effectively controlled. She is also suspected of interfering in various state affairs, including ministerial appointments and state visits, despite having no official position. Park is being ridiculed as Choi’s puppet.

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