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We have ample examples of efforts to "engage" adversaries, from Willy Brandt’s Ostpolitik to Kissinger’s conception of détente and Kim Dae Jung’s Sunshine policy. Yet much more attention has been given to understanding the logic of sanctions than the logic of inducements. Drawing an array of new sources of information on the North Korean economy, from the direction of its foreign trade to two firm‐level surveys of Chinese and South Korean firms doing business in the country, we consider the political and economic logic of engagement. Like sanctions, the conditions under which engagement strategies are likely to work are subject to a number of constraints. Target governments appear well aware of the risks of engagement and there is only mixed evidence for claims that such engagement has transformative effects.

Dr. Stephan Haggard is the Lawrence and Sallye Krause Distinguished Professor of Korea-Pacific Studies and Director of Korea-Pacific Program (KPP) at the University of California, San Diego Graduate School of International Relations and Pacific Studies.

Stephan Haggard works on the political economy of developing countries, with a particular interest in Asia and the Korean peninsula. He is the author of Pathways from the Periphery: The Politics of Growth in the Newly Industrializing Countries (1990), The Political Economy of Democratic Transitions (1995, with Robert Kaufman), The Political Economy of the Asian Financial Crisis (2000) and Development, Democracy and Welfare States: Latin America, East Asia, Eastern Europe (2000, with Robert Kaufman). His current research focuses on the relationship between inequality, democratization and authoritarianism in developing countries. 

Professor Haggard has written extensively on the political economy of North Korea with Marcus Noland, including Famine in North Korea: Markets, Aid, and Reform (2007) and Witness to Transformation: Refugee Insights into North Korea (2011). Haggard and Noland co-author the "North Korea: Witness to Transformation" blog at the Peterson Institute for International Economics.

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Stephan Haggard Distinguished Professor of Korea-Pacific Studies; Director of Korea-Pacific Program Speaker University of California, San Diego
Seminars
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Neo-liberalism, which became a dominant ideology in policy-making in many countries from the early 1980's, is now blamed for worsening inequality and the 2008 world financial crisis. As the recovery process is moving very slowly due to lingering uncertainties from the Euro crisis, going back to the European model of a welfare state is not a feasible policy direction for most countries. Thus, now is the time to seek a new paradigm for a sustainable capitalism and welfare state, Dr. Sang-Mok Suh argues. He proposes 'welfarenomics,' implying a better balance between economics and welfare.

Welfarenomics means promoting a sustainable calitalism through modifying the neo-classical market economy model in three ways: (1) strengthening the role of government in the areas of formulating & implementing national strategy; (2) increasing social values of business activities through developing new CSV (Creating Shared Value) activities; and (3) creating a habitat for co-development through activating civil society. Welfarenomics also implies promoting a sustainable welfare state through modifying the European welfare state model in three ways: (1) building a foundation for 'workfare' through developing customized job programs for welfare beneficiaries; (2) utilizing various welfare programs as means for social innovation; and (3) improving the effectiveness of welfare programs through applying various management concepts to the field of social welfare.

The presentation will cite some of the recent experiences in Korea, but the concept of welfarenomics can be applied to any country in need of achieving both economic growth and social equity.

For the past four decades, Dr. Sang-Mok Suh has been a policy-making expert in both economics and social welfare. After receiving his PhD in economics from Stanford University in 1973, Professor Suh worked at the World Bank for five years and at the Korea Development Institute (KDI), a top South Korean think tank, for ten years as a researcher. His doctoral dissertation was on the relationship between economic growth and income distribution. In 1986, he led the research team at KDI for formulating the National Pension Scheme for Korea. He was vice president of KDI, 1984–1988. As a Korea National Assembly member, 1988–2000, Dr. Suh played the key role of coordinating economic and welfare policies between the ruling party, on the one hand, and the government and opposition parties, on the other. While he was Minister of Social Welfare, 1993–1995, Dr. Suh formulated a comprehensive welfare strategy for Korea for the first time and initiated the Osong Bio Industrial Complex.

Currently Dr. Sang-Mok Suh is Distinguished Professor at Inje University in Korea and chairman of Education & Culture Forum 21. 
 
 

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Sang-Mok Suh Distinguished Professor, Inje University; former Minister of Social Welfare, Korea Speaker
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Koret Distinguished Lecture Series: Lecture I

This year marks the 60th anniversary of the Korean Armistice Agreement but the situation on the Korean peninsula remains tense and uncertain. Eight months after stepping down as the Republic of Korea’s Minister of Foreign Affairs and Trade, Kim Sung-Hwan will address the difficult challenges to achieving sustainable peace on the Korean Peninsula.

Minister Kim will examine North Korea’s policies toward South Korea and the United States in light of major developments on the Korean Peninsula since the end of the Korean War in 1953. He will also address international efforts to stop North Korea’s development of nuclear weapons. He will share his insights into the current situation in North Korea, including the differences in North Korea’s policies and behavior since Kim Jong Un succeeded his late father Kim Jong Il two years ago as the supreme leader. Minister Kim will conclude by offering his policy recommendations for dealing with the North Korea of today.

Minister Kim completed thirty-six years as a career diplomat in the Republic of Korea’s foreign service in March of this year. His final two positions in government were as Senior Secretary to the President for Foreign Affairs and National Security (2008 to 2010) and as Minister of Foreign Affairs and Trade (2010-2013). Earlier assignments in the ministry headquarters included vice minister (2010) and deputy minister for planning and Management (2005). From 2001 to 2002, he served as director-general of the North American Affairs Bureau, in charge of the Republic of Korea’s relations with the United States. Overseas, Minister Kim’s postings included service in the United States, Russia and India. He was Ambassador to the Republic of Austria and Permanent Representative to the International Organizations in Vienna (2006-2008) and Ambassador to the Republic of Uzbekistan (2002-2004). In July 2012, UN Secretary General Ban Ki-Moon appointed Minister Kim as a member of the High Level Panel on the Post-2015 Development Agenda. Minister Kim graduated from Seoul National University and studied at the School of Slavonic and East European Studies, University of London. Currently, Minister Kim is Chair of the Institute for Global Social Responsibility and Distinguished Visiting Professor at the Graduate School of International Studies at Seoul National University.

The Koret Distinguished Lecture Series was established in 2013 with the generous support of the Koret Foundation

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Sung-hwan Kim Former Minister of Foreign Affairs and Trade for the Republic of Korea Speaker
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In this tenth session of the Strategic Forum, former senior American and South Korean government officials and other leading experts will discuss current developments in the Korean Peninsula and North Korea policy, the future of the U.S.-South Korean alliance, and a strategic vision for Northeast Asia. The session is hosted by the Korean Studies Program at the Shorenstein Asia-Pacific Research Center, in association with the Sejong Institute, a top South Korean think tank.

 

PARTICIPANTS

Republic of Korea:

Taeho Bark, Graduate School of International Studies, Seoul National University; Ambassador-at-Large for International Economy and Trade; former Trade Minister

Cholho Chong, Research Fellow, the Sejong Institute; Brig. Gen (retired); Professor, Sookmyung University; former commander, Air University, ROK Air Force

Young Sun Ha, Chairman, Board of Trustees, East Asia Institute; Professor (retired), International Relations, Seoul National University

Sang Woo Rhee, President, the New Asia Research Center; former chancellor, Hallym University

Yoon-joe Shim, Member of the National Assembly, Saenuri Party

Daesung Song, President, the Sejong Institute

Myung Hwan Yu, Chairman, Board of Trustees, Sejong University; former Minister of Foreign Affairs and Trade

United States:

Bruce W. Bennett, Senior Defense Analyst, RAND

Karl Eikenberry, William J. Perry Fellow in International Security, and Shorenstein APARC Distinguished Fellow, Stanford University; former U.S. Ambassador to Afghanistan

Thomas Fingar, Oksenberg-Rohlen Distinguished Fellow, Stanford University; former chairman of the National Intelligence Council

T.J. Pempel, Professor, Political Science, University of California, Berkeley

Gi-Wook Shin, Professor, Sociology; Director, APARC, Stanford University

Daniel C. Sneider, Associate Director of Research, APARC, Stanford University

David Straub, Associate Director, Korean Studies Program, APARC, Stanford University

Katharina Zellweger, 2012-2013 Pantech Fellow, Korean Studies Program, APARC, Stanford University; former North Korea country director for the Swiss Agency for Development and Cooperation (SDC)

 

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LEE,_Dong-Wook_3x4.jpg PhD

Dong-Wook Lee is a visiting scholar at the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC).

Lee has worked for many different divisions at the Republic of Korea’s Ministry of Knowledge Economy, in various fields such as automobiles and shipbuilding, overseas resources development, inter-Korean economic cooperation, industrial complex development, and emerging industries policies, to name a few. At the ministry, he has played a central role in developing industry related policies, enhancing the competitiveness of Korea's industries, strengthening cooperation between North and South Korea, and promoting industrial convergence.

Before Lee came to Shorenstein APARC, he was a director general in charge of the Korea Trade-Investment Promotion Agency (KOTRA)’s Foreign Investor Support Office to attract foreign direct investment. He has served as a public official for more than 20 years since passing the Examination for Higher Civil Service (finance and economy) in 1991.

Lee acquired a BA in business management from Yonsei University and an MA in public administration from Seoul National University. He earned a PhD in economics from KonKuk University in February 2012.

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These working papers on the South Korean economy are the product of an annual conference series on Korean affairs hosted by Stanford University's Korean Studies Program (KSP), and made possible by the generous support of the Koret Foundation. KSP's 2009–2010 Koret Fellow, Byongwon Bahk, a former vice finance minister and chief economic adviser to Korean president Lee Myung-bak, played a leading role in organizing the 2010 conference, authored a major paper, and co-edited this volume.

From Byongwon Bahk's preface:

The editors believe that the study of the South Korean economy holds, or should hold, interest not only for Koreans but also for Americans and the international community as a whole. Korea has become a major player in the global economy, ranking thirteenth in GDP and seventh in exports among the world's nearly 200 countries. This should no longer come as much of a surprise to consumers across the globe who use Korean cell phones, drive Korean cars, and, increasingly, enjoy Korean pop music and movies.

The Korean economy is also important as a leading model of development. In only two generations and despite national division and the devastation of civil war, South Korea has transformed itself from a largely agricultural economy to a world leader in manufacturing, which in turn facilitated its emergence as a dynamic democracy. The Korean experience holds many lessons for countries throughout the world as they also struggle to modernize in a highly competitive, globalized economy.

Korea's success in navigating the turmoil caused by the global financial crisis and recession of 2008–2009 is yet another reason for studying its economy. Despite its economy being an astounding 85 percent dependent on international trade, Korea has been among the world's leaders in recovering from the crisis. Korea owes that success in part to the very hard lessons it learned from the Asian financial crisis of 1997–1998.

The five chapters selected for this compendium focus on some of the timeliest and most important issues involving the Korean economy.

Papers included in this volume:

  1. "The Changing Global and Korean Economies" by Taeho Bark
  2. "An Odyssey of the Korean Financial System and the September 2008 Financial Shock" by Thomas F. Cargill
  3. "South Korea’s Official Development Assistance Policy Under Lee Myung-bak: Humanitarian or National Interest?" by Eun Mee Kim and Ji Hyun Kim
  4. "Policy Recommendations for the Korean Economy" by Byongwon Bahk
  5. "Economic Globalization and Expatriate Labor in Korea" by Gi-Wook Shin and Joon Nak Choi
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Byongwon Bahk
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In the ninth session of the Strategic Forum, former senior American and South Korean government officials and leading experts focused on leadership changes on and around the Korean Peninsula and the possible implications for North Korea policy, the U.S.-South Korea alliance, and Northeast Asia. They analyzed North Korean behavior under its new leader Kim Jong-un and the likelihood his regime would continue nuclear and missile development. Participants also compared and contrasted the North Korea and alliance policies of South Korea’s leading candidates in the December 19 presidential election. The session was hosted by the Sejong Institute, a top South Korean think tank, in Seoul, in association with the Korean Studies Program at the Shorenstein Asia-Pacific Research Center.

 

PARTICIPANTS

Republic of Korea:

Chul Hyun Kwon, Chairman of the Board, The Sejong Foundation

Dae Sung Song, President, The Sejong Institute

Sang Woo Rhee, President, New Asia Research Institite

Jae Chang Kim, Co-Chairman, Council on US-Korea Security Studies

Myung Hwan Yu, Former Minister, Foreign Affairs & Trade Ministry

Yong Ok Park, Governor, PyungAn Nam-do Province (North Korea territory)

Se Hee Yoo, Chairman, Daily NK; Hanyang University

Ho Sup Kim, Professor, Chung-ang University; Chairman, KPSA (2012)

Young Sun Ha, Chairman, East Asia Institute

Jung Hoon Lee, Professor, Yonsei University

Seong Whun Cheon, Chief, North Korea Studies Center, KINU

Chol Ho Chong, Research Fellow, The Sejong Institute

United States:

Gi-Wook Shin, Director, Shorenstein APARC, Stanford University

Michael Armacost, Distinguished Fellow, Shorenstein APARC

Bruce Bennett, Senior Research Fellow, RAND Cooperation

Karl Eikenberry, Distinguished Fellow, Shorenstein APARC

Thomas Fingar, Distinguished Fellow, Shorenstein APARC

David Kang, Director, Korean Studies Institute, University of Southern California

T.J. Pempel, Professor, Political Science Dept., University of California, Berkeley

Daniel C. Sneider, Associate Director for Research, Shorenstein APARC

David Straub, Associate Director, Korean Studies Program, Shorenstein APARC

Joyce Lee, Research Associate, Korean Studies Program, Shorenstein APARC 

Seoul, Korea

Workshops
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Katharina Zellweger will share her insights into North Korea based on her experience as a development and humanitarian aid worker and a resident of Pyongyang. Closely interacting with North Koreans daily, Zellweger lived in Pyongyang for five years as the North Korea country director for the Swiss Agency for Development and Cooperation (SDC). She is a Swiss national with over 30 years of experience in humanitarian work from an Asian base. Her primary engagement has been with China and North Korea.

While heading the SDC program in Pyongyang, Zellweger focused on sustainable agricultural production to address food security issues, income generation to improve people's livelihoods, and capacity development to contribute to individual and institutional learning.

Before joining SDC, Zellweger worked nearly 30 years at the Caritas Internationalis office in Hong Kong, where she pioneered the organization's involvement in China and North Korea. In recognition of her work in North Korea, the Vatican made Zellweger a Dame of St. Gregory the Great in 2006. 

Zellweger holds a master's degree in international administration from the School of International Training in Brattleboro, Vermont, and a Swiss diploma in trade, commerce, and business administration. She also apprenticed with Switzerland’s national agricultural management program.

Zellweger joined the Korean Studies Program as the 2011—12 Pantech Fellow to conduct research on the transformation, especially social and economic change, of North Korea and its society.

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Katharina Zellweger 2011-2012 Pantech Fellow Speaker
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Since Kim Jong Il’s death on Dec. 17, North Korea has a young new leader: Kim’s 28-year-old son Kim Jong Un. What does the new leadership hold in store for the future of the Korean Peninsula, U.S.-Korea relations, and the stability of Northeast Asia? David Straub, who attended the seventh U.S.-Korea West Coast Strategic Forum in Seoul just days before Kim’s death, shares highlights from the Forum and offers insight into the current North Korea situation.

Straub is associate director of the Korean Studies Program at Stanford University and a retired senior U.S. foreign service official with over 30 years of Northeast Asia experience.

The U.S.-Korea West Coast Strategic Forum is held semi-annually, alternating between Stanford and the Sejong Institute in Seoul.

The West Coast Forum opened with a discussion about the current situation in North Korea. After Kim Jong Il’s death, how much do you think that picture will change?

Most Forum experts believe there will be relative stability in North Korea for some time to come.

The reason Kim Jong Il chose Kim Jong Un as his successor is because he is the least controversial person in North Korea to succeed him. Anyone else would be the object of great suspicion and jealousy within the elite there.

North Korea has already had one succession—from founder Kim Il Sung to his son Kim Jong Il—and that went smoothly. The succession from Kim Jong Il to his youngest son Kim Jong Un is natural within that context—it is a dynastic succession. As with other dynastic successions, the easiest person to accept is normally someone who represents a continuation of the person in power.

Do you foresee possible areas for improvement in relations between North and South Korea or for negotiations over North Korea’s nuclear program?

Apr. 15 is the 100th anniversary of Kim Il Sung’s birth, which is going to be a large celebration. North Korea probably will want to commemorate it without a lot of distractions. The North Korean leadership also wants to provide more food and supplies to its people, and provocations toward South Korea would make it harder to get international aid. 

A number of Forum experts are concerned that North Korea might conduct another nuclear or long-range missile test this year. Most tests so far have not been fully successful, so from a military and technology perspective they probably want to try again. North Korea has been slapped with international trade sanctions for its previous tests, but China has always stepped in to help. Sanctions will probably not deter the North Koreans from conducting future tests.

As far as inter-Korean relations are concerned, it is unlikely that North Korea will take any major new initiatives toward the South. The leadership does not like conservative South Korean President Lee Myung-bak because he came into office saying that he would not continue giving large-scale aid to North Korea until it abandoned its nuclear weapons program. That was contrary to the Sunshine Policy of his two progressive predecessors.

President Lee’s term is almost up, and South Korea will hold a hold a presidential election on Dec. 19 this year. North Korea probably hopes that the progressives will win the election and restore the Sunshine Policy.

Will North Korea be a major issue for debate in South Korea’s upcoming 2012 presidential election?

Current polling shows that North Korea is the top concern of only 8 percent of the South Korean electorate. As in the past, the main issues for voters there are the economy, their standard of living, and social welfare issues. North Korea will not be the top issue unless something very dramatic happens between now and the election. On the other hand, if the race is close, feelings about North Korea policy could help to decide the outcome.

Among South Korean citizens, is there more fear or hope—or maybe a mixture of both—about North Korea’s new leadership?

Recent opinion polls show that 80 percent of South Koreans feel that North Korea will not give up its nuclear weapons. There is not much reason for optimism. That being said, most South Koreans are concerned about North Korea’s 2010 attack of Yeonpyeong Island and hope for improved relations. And, of course, Kim Jong Un is a different leader and most South Koreans hope he will move in a more positive direction. But they feel it is unlikely to happen in the next few years—if ever.

Does uncertainty over the future of North Korea have the potential to impact or strengthen any aspects of the U.S.-South Korea alliance?

This year, the U.S. and South Korean administrations will likely focus on managing the North Korean situation and continue to prioritize the U.S.-South Korea alliance. The two countries closely cooperate on North Korea policy.

The real question for the alliance in terms of North Korea policy will be who is elected as president in both countries. If a progressive South Korean candidate wins, that person will probably pursue some variation of the Sunshine Policy. Especially if a Republican is elected in the United States, we may see echoes of the difficult U.S.-South Korea relationship we had during the George W. Bush administration.

If President Obama is re-elected, another South Korean Sunshine Policy would also pose challenges. The administration has taken a very firm position that the United States will not significantly improve relations with North Korea until it gives up its nuclear weapons program. South Korea’s Sunshine Policy focuses on embracing North Korea in the hope that relations will improve over time and that North Korea will eventually voluntarily give up its nuclear weapons in that long-term context. 

China, the country in Northeast Asia with the most influence over North Korea, recently issued a statement in support of Kim Jong Un. Does this signify any major change in relations between these two countries?

The Chinese government has particular interest in North Korea. China is focused on developing its own economy, including the relatively poor northeastern area that borders North Korea. The last thing China wants is instability on the Korean Peninsula, which would detract from its economic development.

China does not believe it can force North Korea to give up its nuclear weapons without risking instability. In the absence of progress in the Six Party negotiations over North Korea’s nuclear program, China has unilaterally increased economic and diplomatic support for North Korea. Its support is independent of who serves as the North Korean leader.

China tried very hard to get Kim Jong Il to open up the North Korean economy more, but did not succeed, primarily because Kim feared that doing so would also allow in more outside information and undermine his regime. China probably hopes that the younger Kim Jong Un may eventually have not only the power but also the desire to reform the economy.  

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