The Vision 2030 private working group consisting of Korea Development Institute (KDI), Samsung Economic Research Center, state-run and private economic research institutions worked out a report on basic analysis for establishing the Vision 2030 last August.
According to the report, the first task for Korea to enter ranks of advanced countries is to become a respectable and open country, which calls for conversion of the Korean economy into an open economy suitable for international standards and acceleration of the nation's networking system with foreign countries. Then what is the concrete strategy to become a respectable and open country
The working group said that Korea needs to create a foothold to become an advanced trading country through the Korea-U.S. Free Trade Agreement (FTA) and emerge as an FTA network hub of Northeast Asia.
It said the effects of international specialization will be maximized and the impact of FTA on the Korean economy will be eased if Korea pushes for FTAs with such advanced countries as the United States and Japan and with China and ASEAN simultaneously.
In particular, it stressed that the FTA among the three countries -- Korea, China and Japan -- which accounts for one fifth of the global economy in size, could be the most important midterm goal for economic integration of Northeast Asia.
Unfortunately, however, we cannot but worry that Korea may have lost its chance to jump toward the FTA network hub of Northeast Asia. It is because Korea is falling far behind China and Japan in terms of the speed pursuing FTA.
Currently, China and Japan are staging keen competition in Southeast Asia. For instance, Japan and Indonesia agreed on November 28 to conclude an Economic Partnership Agreement (EPA), which means an economic integration including FTA centering on tariff abolition, investment, intellectual property rights and exchange of manpower.
Under the agreement, Japan receives a tariff exemption for 95 percent of its exports to Indonesia.
Japan has already attracted Singapore, Malaysia and the Philippines to the East Asia EPA block. If Japan includes Indonesia with a population of 217 million in the block, Japan can lead the giant Asian market with a population of 330 million. Japan plans to increase the number of EPA conclusion countries to 12 over the coming two years from the present four.
Meanwhile, China signed a basic agreement with ASEAN in November 2002 to conclude an FTA. From July 2005, China and ASEAN began to lower tariffs for 7,445 products and effectuated FTA.
A China-ASEAN FTA with a population of 1.8 billion and GDP of US$2.3 trillion is the world's third largest economic bloc, following North American Free Trade Agreement (NAFTA) and European Union (EU). China has so far concluded FTAs with 11 countries.
Like this, the Asia's economic bloc, including Southeast Asia and Central Asia, is changing to the stage of China and Japan. However, the FTA achievements Korea has so far attained are terrible.
In fact, Korea faces a crisis of nut cracking like a nut being attacked from both China and Japan.
Then, how can we change this crisis to a chance for becoming hub
The correct answer is digital diplomacy
To raise our voice in the global society and keep the nation's interest, we should perform our obligation and responsibility. In particular, it goes without saying that Official Development Assistance (ODA) for developing countries is very important for export-oriented countries such as Korea.
Accordingly, developing countries will play a greater role for Korea to maintain prosperity by supplying enough resources. It is very important for Korea, a trading country in the global market, to expand its export market and secure stable raw materials. As the globalization is becoming accelerated, Korea needs to expand overseas markets for stable investment and depend on skilled foreign workers.
Meanwhile, Korea needs new allied nations among developing countries for its national security. In the past several decades, we tied the conception of security to the relations between Korea and the United States and major allies. However, most concerned threats these days are deteriorating environment, infectious diseases and politically extremist groups. To effectively cope with these problems and secure political, morale and economic assistances, Korea should obtain multinational and wider partnership.
Developing countries hope Korea will play a leading role in keeping with its economic and political status in the world. Korea is the 11th largest economic power in the world, but its assistance volume for growth of developing countries is the lowest among OECD countries, taking into account its economic size.
In particular, Korea has a special thing it can offer. Developing countries admire Korea's achievements and hope to follow the trace of Korea's economic and political development.
Development cooperation is a reciprocal one. Thanks to globalization, Korea has been rapidly changing to a multicultural society. Having variety in society and culture and keeping close relations with developing countries will bring about more understanding, generosity and mutual respect in the Korean society.
However, the problem lies in the fact that it is not so easy to increase the nation's public assistance scale for developing countries.
Under its mid and long-term plan, Korea has set its target for ODA to gross national income (GNI) at half of the average of OECD countries. However, it is not so easy to attain the goal because it requires Korea to spend about 5 trillion won in assistance funds over the coming five years.
As a result, we need to develop our special assistance method, which generates high efficiency despite small scale of budgets.
The right answer is a Digital Hallyu
At present, a slew of young people in China, Iran, Dubai, Mongolia, Vietnam and Indonesia eagerly hope to possess Koreanmade mobile phones. In addition, buses and passenger cars carrying Korea's advertisement boards or letters in a number of developing countries are attracting high popularity, showing the boom of Digital Hallyu.
Digital diplomacy through Digital Hallyu, a Korean wave of digital technology, services and products, suggests the new direction of our diplomacy. Although Korea falls far behind China and Japan in terms of diplomatic financial resources and manpower, Korea should seek ways to tide over such demerits through digital diplomacy.
Related to this, the Future Strategic Committee of the Ministry of Information and Communication declared the Korea Vision ACE IT Strategy on November 24, which includes the way to activate IT diplomacy. ACE stands for Advanced, Convergent and Expanded.
Under the ambitious project, Korea will actively push for digitalization of developing countries in the education, remote medical treatment, human beings' cultural asset sectors, not to mention to lead the IT cooperation activities with the United Nations and the International Telecommunication Union.
Such digital diplomacy or IT diplomacy can be a Korea-type supporting model that China and Japan cannot imitate. It is the very effective way to maximize assistance effects by making the best use of Korea's merits.
