Global Korea 2010: Is South Korea Emerging as a Global Leader?

Do-Hee Jeong, BASC Research Assistant

South Korea has been the subject of great international attention during the past few weeks. In addition to Yuna Kim’s momentous recording-breaking victory in figure skating at the 2010 Winter Olympics, South Korea took the lead in a joint research project with Japan and China to push for a tripartite free trade deal; started free trade agreement talks with Turkey, Colombia and Mexico; further developed North Korea talks with China; and hosted its first set of meetings for the G-20 Summit this November. But most importantly, Korea embarked upon a new foreign policy direction by announcing an increase in foreign aid during the Global Korea 2010 conference held last Wednesday in Seoul commemorating President Lee Myung Bak’s second year in office. This coincides with Korea’s movement towards greater international leadership as the host nation for the 2010 G-20 Summit.

Although once a recipient of international aid itself, Korea introduced a campaign to increase its official development assistance during the recent Global Korea 2010 conference. In his keynote speech President Lee vowed that “Korea will not spare any efforts” for greater development assistance and urged “reducing development gaps between developing and advanced countries should be an integral theme for the world economy’s sustainable growth”. President Lee hopes to share the unique development expertise that Korea accumulated during its dramatic economic development with other members of the exclusive club of heavyweight international donors in the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD). Korea became an official member of the DAC last November, and as such, has an increasing obligation to extend overseas aid. In addition, the Lee administration used the Global Korea 2010 conference to showcase Korea’s new role as a global leader by announcing an increased commitment to foreign development assistance. Korea hopes that its rapid development and quick recovery from the financial crisis can serve as examples for currently developing countries. South Korea also plans to expand its economic policy advisory service by increasing the number of advisory-recipient countries. The four current countries include Vietnam, Indonesia, Uzbekistan and Cambodia, but the administration plans to expand to seven countries by 2011 and ten countries by 2012.

Furthermore, the Korea International Cooperation Agency, the government’s main body for official development assistance, has already increased its annual budget by 20 percent this year. The agency’s goals are two-fold: to increase overall contribution level, and to extend more interest-free grants than loans. The agency also plans to expand overseas development assistance to 0.25 percent of its gross domestic income by 2015; assistance currently remains at 0.1 percent (other members of DAC give an average of 0.3 percent). The agency stresses the interconnectedness of today’s world, claiming that the collapse of other countries will have dramatic impact on export-dependent Korea. The agency also emphasizes that increasing overseas aid will help to raise Korea’s international status.

However, these philanthropic efforts are probably not without self-interested motivations. Korea hopes to gain more access to the global market, and the country is actively pursuing a number of bilateral and regional agreements. Foreign aid will provide Korea entry points to many new markets and investment opportunities around the world.

Although Korea has been successful in gaining international attention for its plans to increase foreign aid, whether or not these measures will improve the global status of Korea and further legitimatize its role as a global leader by the G-20 Summit is open to debate. Although these initial steps seem hopeful, the issue of South Korea’s protracted burden of providing North Korean aid, its domestic problems, and the question of whether or not the “Korean” model of economic development can be generalized to other developing countries cast a shadow on the optimism of the Global Korea 2010 conference. Time will allow us to better evaluate these initial steps in Korea’s path to becoming a global leader.

G-20 2009: Promise-Making in Pittsburgh

This week, three BASC Research Assistants take on the recent G-20 summit in Pittsburgh, examining issues of security, institutional change, and the environment.

Crashing the G-20 Party: Line in the Sand against Iran
Ivy Ngo, BASC Research Assistant

The opening statements at the G-20 Economic Summit wasted no time in addressing the revelation of a nuclear facility in Iran. “Iran is breaking the rules all nations must follow”, President Obama said, while Prime Minister Gordon Brown announced, “The international community has no choice today but to draw a line in the sand.” Iran’s refusal to accept fault-–it did, after all, report the facility itself to the International Atomic Energy Agency and maintains the facility is for nuclear energy and not atomic bombs–-has done little to assuage the international community. Even Russia and China, who have been known to hug the fence on global security issues, have condemned Iran’s actions. The ‘line in the sand’ creates two options for Iran: diplomacy or sanctions.

The reaction towards Iran has thus far been hard-line, with little room for negotiation. Could this reaction be too harsh? Headstrong North Korea and Cuba have both been under tough sanctions for decades now, and North Korea has also recently been posturing with its own nuclear development. During his time in office, former President George W. Bush made his well-known assessment of Iran as part of an ‘axis of evil’; the continued harsh attitude towards Iran could entrench it further. Iran’s adamant denial of wrongdoing is laced with resentment. The Iranian recently posted a short opinion piece asking why Iran is excluded from the G-20 considering that it ranks 17th among the top 20 economies, based on Purchasing Power Parity, in lists compiled by the IMF and World Bank.

With the G20 now becoming the central platform to discuss the global economy, it will be interesting to see how the international community reacts, and who will dominate the discussion. So far, the US has refused to engage in direct talks, opting for six party talks with Britain, France, Russia, China and Germany instead.

Institutional Shift: Rising Powers Gain Greater Voice in the G-20
Michelle Chang, BASC Research Assistant

At a time when nations around the world are struggling to climb out of the greatest financial crisis since the Great Depression, the G-20 meeting in Pittsburgh is symbolic of first steps a new world economic order. Its emergence as the primary coordinating body of global economic issues signifies the increasingly undeniable importance of developing countries such as China and India and the need to provide these rising powers with fora in which they can exercise greater influence. Similarly, leaders of G-20 nations agreed to give greater voting power to developing countries within the International Monetary Fund (IMF) to make the institution more representative. At the moment, about 57% of the voting power in the IMF belongs to developed countries and 43% belongs to developing countries, and this shift will make the two groups about even. These actions are long overdue, but hopefully they represent the first of many steps necessary to bring our existing global institutional architecture in line with the changing realities of the international order.

The G-20 and the Environment: Vague Promises Draw Continued Criticism
Ren Yi Hooi, BASC Research Assistant

Despite reiterated promises to build a ‘greener’ economy, the G20 summit failed to propose a concrete set of actions to address environmental issues. While world leaders dedicated a total of $1.1trillion towards boosting the economic and financial crisis, there was no money set aside to protect the environment, disappointing environmental groups who criticized the ‘green effort’ as one characterized by “vague aspirations”. At the summit, leaders affirmed a 15-month-old commitment to put up a new climate treaty in December, pledged to “create green jobs” and resolved to "accelerate the transition" to a low-carbon economy. However, these were seen as inadequate repetitions of old ideas by environment experts and lobbyists, who had wanted to see solid figures and stronger message to re-build a leaner economy run on wind and solar power. The G-20 may be a powerful new forum within which to deal with these complex environmental issues, but if countries hope to truly make progress, leaders must make more concrete commitments to changing the behavior of their respective nations. The current global economic crisis certainly deserves primary focus at the moment, but given the propensity for continual change and upheaval on the international stage, the environment must be prioritized in order to ensure a bright future for all countries.