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Korea's Economy

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Korea's Economy 2014 Overview and Macroeconomic Issues Lessons from the Economic Development Experience of South Korea Danny Leipziger The Role of Aid in Korea's Development Lee Kye Woo Future Prospects for the Korean Economy Jung Kyu-Chul Building a Creative Economy The Creative Economy of the Park Geun-hye Administration Cha Doo-won The Real Korean Innovation Challenge: Services and Small Businesses KOREA Robert D. Atkinson Spurring the Development of Venture Capital in Korea Randall Jones ’S ECONOMY VOLUME 30 Economic Relations with Europe KOREA’S ECONOMY Korea’s Economic Relations with the EU and the Korea-EU FTA apublicationoftheKoreaEconomicInstituteof America Kang Yoo-duk VOLUME 30 and theKoreaInstituteforInternationalEconomicPolicy 130 years between Korea and Italy: Evaluation and Prospect Oh Tae Hyun 2014: 130 Years of Diplomatic Relations between Korea and Italy Angelo Gioe 130th Anniversary of Korea’s Economic Relations with Russia Jeong Yeo-cheon North Korea The Costs of Korean Unification: Realistic Lessons from the German Case Rudiger Frank President Park Geun-hye’s Unification Vision and Policy Jo Dongho Kor ea Economic Institute of America Korea Economic Institute of America 1800 K Street, NW Suite 1010 Washington, DC 20006 KEI EDITORIAL BOARD KEI Editor: Troy Stangarone Contract Editor: Gimga Group The Korea Economic Institute of America is registered under the Foreign Agents Registration Act as an agent of the Korea Institute for International Economic Policy, a public corporation established by the Government of the Republic of Korea. This material is filed with the Department of Justice, where the required registration statement is available for public inspection. Registration does not indicate U.S. Government approval of the contents of this document. KEI is not engaged in the practice of law, does not render legal services, and is not a lobbying organization. The views expressed in this publication are those of the authors. While this monograph is part of the overall program of the Korea Economic Institute of America endorsed by its Officers, Board of Directors, and Advisory Council, its contents do not necessarily reflect the views of individual members of the Board or of the Advisory Council. Copyright © 2015 by the Korea Economic Institute of America. Printed in the United States of America. All Rights Reserved. ISSN 0894-6302 CONTENTS KEI Board of Directors ................................................................................................................................. II KEI Advisory Council .................................................................................................................................. III Preface ........................................................................................................................................................V Overview and Macroeconomic Issues Lessons from the Economic Development Experience of South Korea ..............................................................1 Danny Leipziger The Role of Aid in Korea’s Development .......................................................................................................................7 Lee Kye Woo Future Prospects for the Korean Economy .................................................................................................................27 Jung Kyu-Chul Building a Creative Economy The Creative Economy of the Park Geun-hye Administration ..........................................................................35 Cha Doo-won The Real Korean Innovation Challenge: Services and Small Businesses .....................................................................47 Robert D. Atkinson Spurring the Development of Venture Capital in Korea ....................................................................................55 Randall Jones Economic Relations with Europe Korea’s Economic Relations with the EU and the Korea-EU FTA .....................................................................65 Kang Yoo-duk 130 years between Korea and Italy: Evaluation and Prospect ..........................................................................73 Oh Tae Hyun 2014: 130 Years of Diplomatic Relations between Korea and Italy ...................................................................81 Angelo Gioe 130th Anniversary of Korea’s Economic Relations with Russia ..................................................................................87 Jeong Yeo-cheon North Korea The Costs of Korean Unification: Realistic Lessons from the German Case .....................................................93 Rudiger Frank President Park Geun-hye’s Unification Vision and Policy ..............................................................................101 Jo Dongho KOREA’S ECONOMY 2014 - I PRESIDENT PARK GEUN-HYE’S UNIFICATION VISION AND POLICY By Jo Dongho Abstract Achieving unification has been one of the most important national goals of all South Korean presidents. President Park is no exception, and clarifies that building a foundation for national unification is one of the four major objectives of her government. Her basic perceptions are “from small unification to big unification” and “unification bonanza.” In order to seek unification, she takes three tasks: 1) normalizing inter-Korean relations through a trust-building process, 2) embarking on small-scale unification projects that will ultimately lead to a complete integration of the two Koreas, and 3) taking practical measures to prepare for unification by strengthening unification capabilities. President Park’s unification vision is desirable in that her administration is taking a balanced approach between unification and exchanges and cooperation while past administrations took a lopsided approach either toward exchanges and cooperation or toward unification. Another positive aspect of Park’s unification vision is that she approaches unification in terms of benefit rather than cost. However, criticism can be raised given that it may not be appropriate to seek out unification while even rudimentary official dialogue has been blocked. Resuming dialogue should be a priority in order to achieve peaceful unification. NORTH KOREA - 101 Introduction party Coalition for the Future, visited Pyongyang and had a private meeting with the late North Korean leader Kim “Our wish is unification.” This is a song the Korean people have Jong-il. This demonstrates that unification is one of her top been singing since childhood. For most Koreans, unification is a priorities. In fact, President Park clarifies that building a lifelong mission that must be accomplished. Korea had been one foundation for national unification is one of the four major nation since the Shilla dynasty established a unified kingdom objectives of her government. on the Korean Peninsula in 676. Therefore, the nation’s current divided status is unusual from a historical perspective. Having The purpose of this paper is to analyze the Park Geun-hye experienced tragedy and bitterness during the Korean War, administration’s unification vision and policy through President and suffering numerous provocations from North Korea after Park’s public speeches and official documents published by the war, Koreans consider unification the only fundamental the South Korean government. The Park administration’s solution to the consistent threat of another war on the peninsula. unification vision is then assessed in comparison with the Moreover, unification is expected to provide an opportunity for unification policies of past governments. Lastly, the paper further growth of the Korean economy. concludes with suggestions for the Park administration’s In addition, separated family issues make unification one of the unification vision and policy. most urgent tasks for the South Korean government. As of June 2014, the number of South Korean applicants for reunion is The System and Contents of President 129,553. The applicants are those who have parents or siblings Park’s Unification Vision and Policy in North Korea. If we define separated family in a broader sense, such as including the applicants’ children and/or grandchildren, Under the grand vision of “A New Era of Hope and Happiness,” the number is estimated to be several million. Indeed, there is President Park proposes four major national objectives: a saying in Korea “ten million separated families’ hahn (inner economic revival, ROK citizen’s welfare, thriving culture, rancor and sorrow).” and building a foundation for unification. In her inauguration speech, President Park said that “I intend to lay the groundwork In this regard, overcoming division or achieving unification for an era of harmonious unification where all Koreans can lead has been one of the most important national goals of more prosperous and freer lives and where their dreams can South Korean presidents. In fact, according to Korean come true.” Constitution Article 69, the oath of office commands the Republic of Korea president to pursue peaceful unification As noted with the three tasks in Figure 1, President Park’s of the homeland. Like her predecessors, President Park unification policy is based on a gradual and peaceful has shown a strong interest in unification issues. In 2002, approach. Therefore, it is clear that President Park furthers President Park Geun-hye, then chairperson of the political President Noh Tae-woo and the following administrations’ Figure 1 President Park Geun-hye’s Unification Vision and Policy Source: Ministry of Unification. 102
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