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.

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.

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.