Tag Archive | "politics"

Moon Jae-in Takes a Different Path to Change in South Korea

By Hwan Kang

When Moon Jae-in was elected after former President Park Geun-hye was impeached, Koreans expected major policy makeovers. Indeed, the Moon Administration is trying to meet expectations by addressing some of Korea’s long lasting problems by announcing progressive measures such as an increase in the minimum wage and regulating the real estate market. However, Moon is also showing he is different from other politicians not by tearing apart Park Geun-hye’s legacy entirely, as some other progressive politicians have promised, but rather by utilizing part of it to his advantage.

One of former President Park’s main priorities was her “Creative Economy” plan, which aimed to promote economic growth and create jobs by fostering imagination, creativity and technology. This was the basis for hosting many startup contests and funding new startup centers that were supposed to inspire young minds to create new businesses. However, not only did the “Creative Economy” turn out to be a major flop with no definite results, it became a center of many embezzlement and bribery allegations in relation to Choi Soon-sil and her co-conspirators. The scandal also left the Korean public with a very bad impression of startups, causing many startup centers to face funding cuts and endangering new ventures.

In his 5-year policy roadmap, which was announced last July, Moon promised to continue the governmental support for startups despite the bad publicity, while promising a thorough investigation into allegations against the previous administration. He is planning to revamp government support for startups to boost the economy and create jobs in preparation for the “4th industrial revolution.” He even showed that he is going to prioritize startups by changing the name of the ministry charged with handling small business issues from the “Ministry of SMEs” to the “Ministry of SMEs and Startups (MSS).” The words may have changed, but the core startup policy remains pretty much the same as the “Creative Economy.”

Similar to Google or Paypal, it was startups such as Naver, Kakao, and numerous game companies that became surprising contenders against the chaebol conglomerates, always pushing the market to make way for new technology that the chaebols have overlooked. However, because the chaebols were so deeply rooted in the Korean market, SMEs and startups usually did not have a chance to grow into larger businesses themselves. Instead, they opted for big buyouts by the conglomerates, which in turn benefited huge companies even more. The reason the “Creative Economy” became a huge disappointment was that people thought it would finally be a big break for startups, many of which just want to continue developing what they have created. To those people who worried the new government would abandon the venture sector altogether, Moon’s plan may sound more refreshing than making any other changes.

Another policy that has remained steady through the transition between administrations has been the issue of the Terminal High-Altitude Aerial Defense (THAAD) system. Originally, the THAAD deployment created a significant amount of controversy, as it was pushed through by the Park administration without much open debate. It caused an uproar from South Koreans who believed there was some sort of sketchy arrangement behind the deployment because it happened to coincide with the Choi Soon-sil scandal. Additionally, concerns about possible electromagnetic wave pollution near the deployment site, on top of severe economic retaliation from China, also added to the growing anxiety. Each presidential candidate in the May election after Park’s impeachment put forward different positions on the deployment of THAAD, with progressive parties mostly leaning toward cancelling the plan.

Moon, who avoided giving a definite answer to the THAAD problem for a while, eventually decided to proceed with the “temporary deployment” this September and put an end to the indefinite delay. Just as could be expected, this decision was met with variety of mixed emotions from the South Korean public. Some from the progressive side, such as the Justice Party, criticized Moon for his apparent breach of trust, saying the Democratic Party had switched sides. According to Gallup Korea, the approval rate for the President took a slight hit, decreasing from near 80% to 70%, with his disapproval rate rising slightly as well after the announcement.

However, considering that the percentage of people who agreed to the deployment has remained steady within the range of 50%~57% dating from when Park announced the plan in July 2016, to two months into Moon administration in July 2017, one could guess that it was not the deployment itself that people wanted to change in general. Rather, their problem was with how the government handled the whole ordeal. This is a main point of contrast between Park and Moon – the former made little room for talk with the people while Moon at least took the time to consider an environmental test before making a decision. This becomes more evident when Gallup asked people what they thought about Moon’s decision to temporarily deploy four THAAD launchers –  72% replied it was the “right choice,” while 14% thought it was a “bad choice”.

South Koreans wanted change from the status quo and they picked the candidate who promised to deliver it, but the game is still far from over. Change can mean many things, from a complete reversal to minor alterations of existing policies. The Moon Administration is still in its early days and will need to decide what kind of changes would best benefit Korea. Koreans should also keep tabs on where the government is going so the country can head for the direction that people had intended when they impeached the last president.

Hwan Kang is currently an Intern at the Korea Economic Institute of America as part of the Asan Academy Fellowship Program. He is also a student of Seoul National University in South Korea. The views expressed here are the author’s alone.

Photo from the Republic of Korea’s photostream on flickr Creative Commons.

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South Korean President Moon Jae-In and French President Charles de Gaulle, both 360 presidents

Les Présidents: Moon Jae-in, Charles de Gaulle, and the 360 Presidency

By Mark Tokola

Historical analogies are fraught. Things never happen exactly the same way twice, and assuming they do can be misleading.  Nevertheless, historical parallels can offer useful perspectives.  For example, an advisor to South Korean President Moon Jae-in who recently visited Washington remarked that one element of President Moon’s philosophy for South Korea was a “360 degree defense.”  This sounds commonsensical; nations prudently should be prepared to defend themselves against potential threats coming from any direction.  But, for those old enough to remember, it also pushed the memory button of French President Charles de Gaulle’s January 1968 announcement that France would pursue a policy of “defense tous azimuts,” or all-around defense. The parallels between Moon Jae-in and Charles de Gaulle do not stop there.

Charles de Gaulle always had an uneasy relationship with the United States. On one hand, President de Gaulle withdrew France from NATO and obstructed European integration.  On the other, he was the U.S.’ strongest ally during the Cuban Missile Crisis, accurately predicted German unification and the fall of the Soviet Union, and presided over an unparalleled period of French economic growth.  Presidents Kennedy and Nixon both held de Gaulle in high regard.  He has topped polls as “the greatest Frenchman of all time.”  (One assumes Napoleon did not earn the accolade because of being dictatorial and, in the end, losing.)  The lesson of the comparison between de Gaulle and Moon may be that it is possible, perhaps even advantageous, for the United States to have an ally with which it sometimes disagrees.

One contextual parallel between the two presidents is that Moon and de Gaulle both came to power following a domestic political crisis. The collapse of the ineffective French Fourth Republic in 1958 was followed by the de Gaulle presidency and the founding of the Fifth Republic.  Charles de Gaulle promised, and delivered, constitutional reforms which have endured.  Moon Jae-in similarly has taken power following a crisis of governance and has promised constitutional reform.

Charles de Gaulle generally is perceived as a conservative, but on the economic front he favored state intervention in the economy, including a move to rein in the largest French companies by requiring that they share profits with their workers.  By 1964, France had overtaken the UK economically for the first time in modern history.  In a similar vein, Moon Jae-in has promised government action to boost economic performance, and his attitude toward Korea’s largest corporations, like de Gaulle’s, is that they should contribute more to the well-being of the citizenry.

But it is in the foreign policy arena that the comparison might be most instructive.  De Gaulle believed that the Soviet Union posed a threat to Europe, but also believed that it was necessary to engage with the Soviets as well.  He traveled to the Soviet Union in 1964 in an early attempt at détente, all the while believing that the Soviet system had no future.  De Gaulle did not have complete faith in what he considered a weakening American extended nuclear deterrence, and eventually concluded that France needed an independent nuclear arsenal with which it could defend itself.  De Gaulle chose to balance France’s U.S.- and UK-oriented Atlanticism with a European “Continentalism” that he defined as stretching from the Atlantic to the Urals.  He sought the closest possible ties with France’s old enemy, Germany, and held out the possibility of cooperation with Russia (de Gaulle never called it “the Soviet Union”).

It appears that Moon Jae-in has a similar instinct towards broadening the foundation of South Korea’s foreign policy stance.  He favors an enduring, close relationship with the United States, but also believes that South Korea could simultaneously have a positive relationship with China in a more closely integrated Asia, balancing a continuing U.S. Pacific-orientation with a new Asian “Continentalism” among countries of the region.  Continuing the parallel between the two presidents, Moon may view Japan with the same skepticism with which de Gaulle viewed the U.K., cooperating when in both countries’ interests but watching it with a wary eye. Though he doesn’t share de Gaulle’s uncertainty about the U.S. nuclear umbrella.

De Gaulle’s assertiveness in promoting what he perceived as France’s national interest sometimes strengthened and sometimes undermined American diplomacy. But, taking the long view, it also demonstrated that countries that share basic values regarding democracy, free markets, and human rights generally will support each other’s strategic direction and foreign policy interests — even if they disagree from time to time on specific policies.  Similarly, the U.S. government may not always agree with President Moon’s perception of South Korea’s national foreign policy interests.  This may not lead to the most comfortable kind of alliance, but it is still one that can endure, even beyond the temporary issues raised by North Korea.  It is worth recalling that throughout their long and sometimes awkward history, the United States has never been at war with France or with South Korea, a rare distinction.

Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.

Images from wikicommons and arif_shamin’s photostream on flickr Creative Commons.

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Korea Unveils Ambitious Plans for “Mooncare”

By Jenna Gibson

While the United States is locked in a fierce debate over Obamacare, South Korea is going through its own deliberations about healthcare reform. On August 9, right before hitting his 100th day in office, Korean President Moon Jae-In unveiled his plan to expand Korea’s already extensive healthcare system, a proposal quickly dubbed “Mooncare.”

Korea currently provides universal healthcare through its National Health Insurance Service. All citizens are required to pay into the fund via taxes, and they are all covered for general medical costs. Private insurance does exist, and people usually purchase those additional policies to cover large medical expenses, such as a major accident or cancer treatment.

One of President Moon Jae-In’s major pledges has been to reform this system, with the particular goal of decreasing costs for low-income patients. Moon’s plan focuses on three major changes: first, he wants to expand the types of procedures covered by the state insurance to eventually encompass all medical treatment except purely optional operations such as non-medically indicated cosmetic surgery. In addition, he plans to lower the cap for out-of-pocket expenses so that low-income Koreans would only have to pay up to 1 million won ($883) per year for their medical care. Finally, he plans to increase emergency financial support for those in the lower half of the income bracket, providing them access to up to 20 million won ($17,663) in case of a major health crisis.

“We will continue to move toward building a fair and just Republic of Korea that will ache when the people ache and will only smile when the people smile,” Moon said at the plan’s unveiling. “We will build a country where every person is free of concern over medical costs and can receive treatment for any disorder without having to worry about expenses.”

However, not everyone is enthusiastic about these sweeping changes. Korea will need 122,164 more nurses, 1,613 pharmacists, and 785 doctors to implement the president’s plan, according to a report from the Ministry of Health and Welfare. And critics have balked at the 30.6 trillion won ($26.9 billion) pricetag for the plan, saying that even if the government covers the increase for now, those costs may eventually be passed back down to taxpayers. This plan fits in with accusations that Moon is becoming a “Santa Claus President” – along with this healthcare plan, Moon has already promised several major welfare reforms including a minimum wage increase and a boost for both pension and child care funding.

Supporters, on the other hand, praise the program’s ambition and its focus on helping low-income Koreans. They also noted that this increased coverage could lead to a boom in the medical and biotech industry.

Moon’s approval rating has remained high, increasing slightly to hit 78 percent in the days following his healthcare announcement. According to a poll conducted on August 18-19, 85.3 percent of Koreans surveys said Moon was doing a good job managing state affairs. According to the Korea Herald, “When asked about having a ‘medium burden, medium welfare’ system in South Korean society, 81.6 percent supported the idea, with more than 75 percent of the respondents saying they are willing to pay more taxes to expand welfare and solve bipolarization issues.”

While Moon will have to carefully manage the significant funding necessary to conduct this and other major upgrades to Korea’s social safety net, it seems he has widespread support among the Korean public to begin moving forward with his ambitious reform agenda.

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone. 

Image from Republic of Korea Armed Forces’ photostream on flickr Creative Commons.

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Pyongyang’s Deficit Soars: Won Steady But for How Long?

By William Brown

ICBMs are not the only things soaring in North Korean skies.  Comprehensive second quarter data released by China Customs last week shows a huge jump in North Korea’s trade deficit with China—sharply falling North Korean exports and flat imports, a double bad combination.  And, potentially troubling to the Kim regime, the composition of trade seems to be promoting market activity rather than the decrepit, but still enormous, command economy.

China North Korea Trade Balance
*  China stopped reporting crude oil shipments in first quarter 2014 but the trade is reliably said to be continuing, probably at the old aid agreement terms which provides about 150,000 tons of crude each quarter.  The charts, above and below, have added in the value of that volume at generally declining Chinese crude oil export prices–$50 million in the most recent quarter.

Pyongyang has been able to keep a clamp on the exchange rate—won can be traded informally for U.S. dollars in markets around the country—but likely at some cost to the government’s reserves and its ability to expand money supply without sparking inflation, and perhaps with a little help from the balloons. But food and other commodity prices, meanwhile, may be on an upswing as drought followed by flooding diminishes prospects for the critical fall rice crop, and as worries about Chinese supplies may have pushed up gasoline and diesel prices.  An informal inflation index produced by DailyNK has inflation rising to a 16 percent rate in July, suggesting Kim’s signal achievement of fighting inflation may be at risk.

Officially, the Chinese data show a $174 million North Korean deficit in June and $574 million for the quarter, both at record levels. Considering China has taken its crude oil exports “off the books,” the actual North Korean deficit is probably even larger — in the graphics below we have added between $115 to $50 million each quarter to North Korean imports since 2014 to account for the oil.

China North Korea Trade exports and imports

How North Korea finances this large deficit in the face of sanctions on its nuclear and missile activities is not well understood, making policy analysis of those sanctions next to useless. Even South Korea’s Bank of Korea, which bravely estimates North Korean GDP, says it can’t guess at the country’s balance of payments or its hard currency reserves.  But for the sake of argument, and given the trade deficit with China has averaged about $200 million a quarter for the better part of a decade, it would seem reasonable to expect that about this amount of hard currency is earned or borrowed in a combination of net trade with other countries; foreign aid to North Korea including the offset for the crude oil; UN and other international expenditures inside North Korea; small amounts of inward foreign investment and loans; remittances from overseas workers and refugees or Korean immigrant families in Japan, South Korea, China and Russia; and tourism.

  • Probably to re-build domestic confidence after the country experienced a disastrous currency redenomination in 2009, followed by hyperinflation in 2010, Pyongyang’s monetary authorities appear to have fixed the unofficial won’s value at just above 8,000 won per dollar, and began to ignore the official 135 won per dollar rate.  Monetary stability since then is impressive, probably owing to some combination of market price caps, restrictions on the use of foreign currency, conservativism in expanding won credit, direct intervention using the regime’s own reserves and, most interestingly, a willingness to allow legal trading and use of dollars in the market places. And now, with five years of stability, won holders appear satisfied not to chase the dollar.
  • Still, the mystery of the day is why smart money dealers in Pyongyang aren’t taking advantage of the deteriorating export situation by buying up U.S. dollars and forcing a panic.  Either something else is happening that we don’t know about or there is trouble ahead for the country’s always-tenuous finances. One easily can imagine another breakout in favor of the dollar and panic selling of won—hugely disruptive in North Korea’s newly forming half-market economy.

North Korean Won

  

North Korean Exports Labor Intensive and Mining Products

North Korean exports to China fell to only $361 million in the second quarter, the lowest level since 2010, and even this was suppported by generally higher prices for most items.  Major export commodities included:

  • Apparel and other textiles accounted for almost half of its exports—$149 million, up from $145 million in second quarter 2016.
  • Ferrous and non-ferrous ores rose to $78 million, up from $65 million.
  • Fish product exports at $67 million, were up sharply from $31 million.
  • In contrast, mineral products, including coal, was recorded at only $2 million, down from $236 million in the same period of 2016.

None of these items would appear to be big hard currency earners for the regime, although they help provide employment.  Labor intensive textiles exports have grown in recent years as the industry makes better use of its antiquated mills, allowing exporters to pay workers directly in some cases and thus improving productivity of labor and capital alike.  Ore exports would seem problematic, given the UN sanctions against them, but Chinese firms were said to have invested heavily in the huge Musan iron ore complex on the border with China some years ago and may now be recouping investment costs by trucking the ore over into China.  This mine previously served North Korea’s largest industrial complex, the Kimchaek iron and steel mill in Chongjin, which is now dilapidated and only marginally productive. So the iron ore earnings may be coming at the expense of higher value-added steel products once exported from that plant and are likely controversial, even in North Korea, as they are thought of as a giveaway of the nation’s natural resources. China has also invested in a copper mine, and likely in other non-ferrous metals, but results from these are spotty and now largely sanctioned.  Fish products are essentially traded by fishing boats, with flows going both ways depending on the season.

Textiles lead North Korea’s imports

Imports from China also appear to be increasingly driven by consumer rather than government or investment demand.  Textiles, cell phones and television imports are growing at the expense of some industrial inputs and agricultural inputs, and cereals. Petroleum product imports, plus gasoline and diesel fuels, remain sanctioned and low.

  • Textiles and apparel imports reached $258 million, up from $198 million in second quarter 2016.
  • TV and cell phone imports totalled $50 million, up from $38 million.
  • Food products of all kinds registered $123 million, up from $96 million.
  • Diesel, gasoline, and kerosene imports were $19 million, down from $31 million, again from second quarter of 2016.

 

Selected Imports from China

 

Visibility of Chinese-made consumer products among the general public is spreading the suggestion that the economy is doing fairly well—South Korea’s Bank of Korea estimated last week that North Korea’s proxy GDP rose 3.9 percent in 2016, the fastest in well over a decade and this despite the sanctions. But a large question is how far the regime will let this go, given what is clearly a big drain on limited foreign exchange.  Grain imports also rose slightly in the second quarter but remain much lower than in the recent past, and may need to rise much more if the fall harvest turns out to be weak.  Some grain is provided by foreign aid agencies, purchased in China and shipped to North Korea, thus counting as a North Korean import in the trade accounts, but with an offsetting credit in the (unpublished)  transfers account.

William Brown is an Adjunct Professor at the Georgetown University School of Foreign Service and a Non-Resident Fellow at the Korea Economic Institute of America. He is retired from the federal government. The views expressed here are the author’s alone.

Illustration by Jenna Gibson, KEI.

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The North Korean ICBM Test: A Significant Step, But Still Just a Step

By Mark Tokola

It usually takes some time to figure out the details of what a North Korean missile test has accomplished – what type of missile it was, how it performed, its capabilities – but from the initial information regarding North Korea’s July 4th missile test, it appears that they have successfully tested an Intercontinental Ballistic Missile (ICBM).

The accepted technical definition of an ICBM is a missile that can travel 3,400 miles. The North Koreans test fired their missile to fly a short range but with a high trajectory; it landed off the west coast of Japan. If the trajectory was flattened out, the missile in theory could have flown over 4,000 miles, enabling it to reach Alaska but not the lower 48 states.

Conducting an ICBM test is a significant step in North Korea’s weapons program, but it is just a step. Kim Jong-un’s stated objective is to develop a reliable ICBM that can carry a nuclear warhead to the American homeland. The July 4th missile did not demonstrate that kind of range, and there is no evidence (yet) that North Korea has a nuclear warhead that could be carried by an ICBM. We shouldn’t downplay the significance of this test, but calling it a “game changer” may be an overstatement.

The true importance of the July 4th test is the timing – following a series of other missile launches in 2017, it is clear that North Korea is not slowing the pace of its quest for nuclear weaponry that can threaten the U.S. Further, Kim Jong-un has crudely described it as a “gift for the American b******ds,” implying it was timed for Independence Day. The language choice shows that the North Korean regime sees no hypocrisy in using such language about other countries while having a hair-trigger sensitivity to slights to its own national dignity. The test also comes on the eve of a G20 meeting, demonstrating North Korea’s desire to be in the international limelight.

Perhaps the most important fact about the timing of the North Korean ICBM test is that it comes on the heels of the first visit of new South Korean President Moon Jae-in to Washington, where he spoke clearly of his desire to engage North Korea in dialogue. If North Korea had any interest in demonstrating an openness to President Moon’s overture, it would not have conducted an ICBM test only days after President Moon’s public remarks. We should all hope that North Korea would be responsive to a South Korean initiative to defuse tension, but the July 4th test makes it hard to believe that there is any basis for that hope. North Korea seems unresponsive to China’s efforts to defuse tensions, and even less so to South Korea’s initiatives. North Korea seems single-mindedly focused on trying to acquire a reliable ability to credibly threaten the United States with a nuclear attack — truly a high stakes gamble on North Korea’s part.

Still, it is not too late for a diplomatic solution. That would be in the best interest of South Korea, China, Russia, Japan, the United States – and even for North Korea. That diplomatic path may be narrowing, and it will only be possible if South Korea, China, Russia, Japan, the United States, and others are able to maintain a common front against North Korea’s nuclear ambitions. There is some evidence that sanctions are beginning to bite – which may be also be contributing to Kim Jong-un’s rush. As the world’s leaders gather for the July 7-8 G20 summit in Hamburg, watch for signs of unity or division to see how the international community may handle this growing threat.

Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.

Photo from Stefan Krasowski’s photostream on flickr Creative Commons.

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Is Trump Impacting How South Koreans View the United States?

By Kyle Ferrier

Claiming “Korea actually used to be a part of China” and stating “it would be appropriate” if South Korea paid for THAAD are just some of Donald Trump’s comments since his inauguration that have not been well received by the South Korean public. As President Moon Jae-in meets with President Trump this week to discuss new issues as well as longstanding ones such as the North Korea nuclear problem, his flexibility both in Washington and after his return to Seoul depends on public opinion at home. Against this backdrop, the release of two major survey-based reports in the past few days are rather fortunately timed and help to shed light on how South Koreans perceive U.S. political leadership.

The first is the Pew Research Center’s U.S. Image Suffers as Publics Around World Question Trump’s Leadership: America still wins praise for its people, culture and civil liberties, released on June 26. The second is the Asan Institute’s A New Beginning for ROK-U.S. Relations: South Koreans’ View of the United States and Its Implications, released on June 27. While the Pew report looks at a broader scope of countries and the Asan report focuses solely on the South Korean public, both ultimately provide similar conclusions: South Koreans continue to view the U.S. favorably despite negative views on Trump. However, the two provide conflicting analyses as to whether Trump has already impacted U.S. favorability and how South Koreans view the future of relations with the U.S.

From polls conducted in 37 countries, the Pew study finds that international confidence in the U.S. president has dropped from 64 percent at the end of the Obama presidency to 22 percent at the beginning of Trump’s. South Koreans do not buck the trend. When asked if they have confidence in the U.S. president to do the right thing regarding world affairs, 88 percent of South Koreans responded positively during the end of the Obama years while only 17 percent expressed the same confidence in Trump — below the global median of 22 percent. Of the 37 countries polled, this 71 percentage point swing was the fourth largest, behind Sweden, the Netherlands, and Germany. The 78 percent of South Koreans who definitively answered they had no confidence in Trump is the highest among the countries polled in Asia (the others are Japan, Australia, Indonesia, Vietnam, Philippines, and India) and is above the global median of 74 percent. Further, when asked about Trump’s major policy shifts, 78 percent disapproved of withdrawing from international climate change agreements and 80 percent disapproved of U.S. withdrawal of support for major trade agreements.

Asan presents complementary findings. It shows Trump’s favorability during the campaign was low: on their 0 to 10 ratings scale, where 0 is the least favorable and 10 is the most, Trump was below a 2 up through Election Day.  This is similar to the favorability of Japanese Prime Minister Shinzo Abe, not much higher than that of Kim Jong-un — who hovered around 1 — and dwarfed by Barack Obama — who consistently scored in the low to mid-6 range from at least the beginning of 2014 through 2016. Trump’s election boosted him from a 1.69 in November to a 3.25 in December and a 3.49 in January, but dropped to 2.93 in March before going up slightly to 2.96 in June. This jump in favorability since becoming president has given him a steady lead over Abe, but Trump remains below Chinese President Xi Jinping, who is punishing South Korea economically over the deployment of THAAD.

When asked only about the United States, Pew shows 75 percent of South Koreans view the U.S. favorably, above both the regional and global median. In addition, 86 percent view Americans favorably and 78 percent like American democratic values, both of which are also above the regional and global medians.  Further, those on the political right are more inclined to have a favorable view of the U.S., with 86 percent of respondents who self-identified as politically right favoring the U.S. compared to 64 of those on the left.

Korea Surveys

The favorability rating of the U.S. in the Asan study largely follows the trend of the Obama years, remaining around a 6 out of 10. “This suggests that the United States’ favorability is not determined solely by the favorability of its leader and that American soft power has had a positive impact on South Korean public opinion,” the Asan report states. “It appears that South Koreans have learned to distinguish between the United States, the country, and Donald Trump, the individual.”

Both reports seem to indicate that American soft power has a positive influence on South Koreans, who view the U.S. and its president separately. However, the two present contradictory findings on how Trump has impacted perceptions of the U.S.

While Asan shows only a very minor dip in U.S. favorability since Trump’s election — a drop from 5.92 in November to 5.81 in June, which is termed as “relatively stable” favorability scores — Pew finds a larger drop. The 75 percent of South Koreans who viewed the U.S. favorably in 2017 is down from 84 percent in 2015, the last year Pew data is available, and is at its lowest level since 2008. Pew suggests this follows a larger global trend. Of the 37 countries polled, 30 showed a drop in favorable views of the U.S. in 2017. Other countries experienced a steeper fall though, as South Korea’s drop in positive views of the U.S. is tied for 23rd of the 30.

The two reports are also at odds on how South Koreans perceive relations with the U.S. moving forward. Only 8 percent of Pew respondents thought relations with the U.S. would get better, 45 percent thought they would stay about the same, and 43 percent stated they would get worse. In contrast, 67 percent of respondents in the Asan study thought relations with the U.S. would improve and only 20 percent thought relations would deteriorate.

There is clearly a wide gap between the sentiments expressed in both polls, but this is likely because of how the questions were worded.  Pew framed their question around Donald Trump (“Now that Donald Trump is the U.S. president, over the next few years do you think that relations between our country and the U.S. will ___?”) and Asan framed theirs around Moon Jae-in (“ROK-U.S. Relations under President Moon Jae-in will___”.) Considering the negative views on Trump expressed in both polls and Moon Jae-In’s high domestic popularity, this disparity makes a certain amount of sense. Additionally, as no exact date is provided for when the Pew poll was conducted — the report only states spring 2017 — their findings may not reflect changes based on Moon’s election and thus may leave out any boost in confidence it might have engendered for relations with the U.S.

It may still be too early to definitively claim that Trump is impacting South Korean perceptions of the United States. But this does not mean Trump’s controversial statements, should they continue, will not influence how South Koreans view the U.S. in the future. If the outcome of the U.S.-ROK summit this week does not meet expectations or Trump makes controversial remarks in the future, South Korean public opinion of the U.S. could be pushed lower.

Kyle Ferrier is the Director of Academic Affairs and Research at the Korea Economic Institute of America. The views expressed here are the author’s alone. 

Images from Gage Skidmore’s photostream on flickr Creative Commons.

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Moon Vows to Become a “President of All People,” but Faces a Nation Divided

By Gwanghyun Pyun

Moon Vows to Eradicate “Deep Rooted Evils” of Previous Administrations

An unexpected early presidential election was held on May 9 in South Korea. This election was the result of the impeachment of President Park Geun-hye. The election was won by Moon Jae-In, who strongly argued for eradicating ‘deep rooted evils”’ in Korean society, referring to the turmoil from the former President Park. Moon largely won the support of those who protested against the Park administration, and during his campaign he praised the “candle sentiment” of the people who took to the streets with candles to protest. But while he was supported by those who protested against the administration, how will his policies tackle the issues they stood up for?

In Moon and the Minjoo Party’s official pledge book, his first pledge out of twelve is for there to be a ‘Republic of Korea without corruption,’ including the ‘eradication of deep rooted evils’ as its primary agenda. It specifically promises that the next administration would eradicate the deep rooted evils that resulted from the nine years of the former two conservative administrations. This means that his strategy during the election focused on criticizing the previous two  presidents to gain the support of those who took part in the candlelight protests. According to a poll by Gallup Korea, the reasons people voted for Moon were the “eradication of deep rooted evils” (20 percent), “regime change” (17 percent) and Moon’s “good personality” (14 percent).

A Republic of Korea where people are sovereign by finishing the candlelight revolution

Moon and the Minjoo Party decided to begin his list of  four visions for Korea with a vision of “finishing the candlelight revolution, a Republic of Korea where people are sovereign.” It suggests that during the nine years of the two former administrations, Korean society has belonged to the 1 percent of people who have vested interests in the system such as bureaucrats, the chaebol and the rich. Moon insisted during the campaign that finishing the candle revolution would bring a society where all the people are sovereign.

As the first pledge, Moon made promises to take Korean society back from the 1 percent. To do this, his administration will set up a special committee for clearing out deep rooted corruption and confiscating any wealth accumulated by illicit means. While he spoke out against the meddling in state affairs by Choi Soon-sil, a friend of the former president Park closely tied with the scandal that led to hear impeachment, Moon also promised to reform corruption among high-ranking bureaucrats, to remove the blacklist of cultural figures who supported left-wing causes, and to negate the state authored history textbooks made under the Park’s administration.

At the same time, Moon pointed out what he thinks is the fundamental reason why a small number of people have too much power –  the Korean constitution made in 1987 is outdated. Because this constitution has given prior leaders imperial presidential power, he said, Korea needs constitutional revisions to ensure balance between the presidency and the National Assembly.

The 58.6 percent who did not vote for the President Moon

Since he has focused on giving power back to the people, Moon needs to be aware of the views of the 58.6 percent of people who did not vote for him. Considering the fact that Moon’s first vision and pledges are about fixing faults from the last nine years, it seems that his victory  is more about the perceived wrongs committed by the prior two administrations than his policies on security and the economy.

During the election, Moon had two main rivals – the conservative Hong Joon-pyo and the centrist Ahn Cheol-soo, who won 23.3 percent and 21.8 percent of the vote respectively.  He also faced two minor opponents in the center-right Yoo Seung-min and the left Shim Sang-jung, who won 6.8 percent and 6.4 percent respectively.

Excluding the topic of cleaning up corruption, Korean publics opinion on other policies are polarized. Especially in terms of security policy, the three other candidates who collectively won 52.9 percent  offered a different vision for dealing with North Korea than Moon’s pledge  to inherit the ‘Sunshine policy’ that pushed for a close relationship between South and North Korea during the liberal administrations of 1998 to 2008.

The two conservative candidates, Hong and Yoo, insisted that Seoul needs to maintain a hardline stance against the North, including deploying tactical nuclear weapons in South Korea. The main candidate, Ahn, said that without North’s denuclearization first, there cannot be any cooperation with North Korea. Furthermore, these three candidates support the deployment of THAAD, while Moon argued that the THAAD deployment decision should be left to the new administration.

When it comes to economic policy, Moon insisted that the government should lead the creation of job opportunities, and has set a target for creating 810,000 new jobs in the public sector. In contrast, his three main rivals argued that private sector should lead job creation and criticized Moon for having no proper plan to budget for the 810,000 jobs he wants to create.

But while Moon Jae-in may face these splits on economic and security policy, particularly among those who did not vote for him, he has acknowledged the need to bridge divides. In his inaugural address, Moon said “I will become a president of all people. Each person who did not support me will still be my people and I will serve them as such,” highlighting the nation’s integration. It will be an important task for him to address the faults of past, but he must also work to overcome the current divisions in society and bring the nation together.

Gwanghyun Pyun is currently an Intern at the Korea Economic Institute of America as part of the Asan Academy Fellowship Program. He is also a student of Sogang University in South Korea. The views expressed here are the author’s alone.

Photo from Republic of Korea’s photostream on flickr Creative Commons.

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Is the Hallyu Crisis with China Over?

By Jenna Gibson

Beijing has approved the broadcast of a new Korean drama that had been co-produced by a Korean and a Chinese company, according to a source in the Chinese entertainment industry, making it the first Korean show to get the green light since before the THAAD spat.

This move is good news for Korean entertainment companies, which have been lamenting the Chinese ban which had slowly pushed Korean stars out of the spotlight throughout last year and culminated in direct retaliation against tourist packages and Lotte Department stores. It also bodes well for drama co-productions, which had seen tremendous success in last year’s standout Descendants of the Sun. At the time, before THAAD derailed things, Korean-Chinese collaboration was seen as the new frontier in Hallyu, and key to the continued success of Korean creative content in the Chinese market.

What’s interesting is the impetus for China’s reversal on allowing Hallyu content. Beijing is likely trying to start off on a good foot with newly elected Korean President Moon Jae-In, himself a skeptic of the THAAD system, in an attempt to give Moon some leeway should he decide to review the deployment.

A recent op-ed in the People’s Daily-affiliated Global Times insisted that “It is likely that Moon will stop THAAD’s deployment,” saying, “The huge economic losses South Korea has suffered are a result of the Chinese public’s anger. South Korea, which relies heavily on China economically, needs to weigh its potential gains and losses carefully” and that “Both Beijing and Seoul should take Moon’s presidency as an opportunity to promote warmer bilateral relations.”

But in reality, Moon has little room to maneuver at this point. THAAD is already in place and operating at some capacity, and recent missile launches from North Korea (the second of which was detected by THAAD) have highlighted its necessity in the public eye.

Although there was a dip in approval last November, the Korean public has largely remained favorable toward the THAAD system, according to polling by the Asan Institute in Seoul.  As of March, 50.6 percent of Koreans approved of THAAD, with 37.9 percent opposed. Perhaps because of this, President Moon has softened his position from outright opposition during the early stages of the campaign to stating that he objects to the way the decision was made, not the system itself.

As Asan Vice President Choi Kang pointed out in a KEI podcast after the election, President Moon may be constrained both by domestic politics and public opinion. Moon’s Minjoo Party only has 120 seats out of 300 seats in the National Assembly, and he failed to breach 50 percent of the vote during his election.

“How he can make a coalition or compromise with opposition parties is going to be a very, very critical issue for him to handle in the early phase of his presidency,” Choi said.

This could be particularly difficult when it comes to China, which has seen a steep decline in popularity among the Korean public since they stepped up their economic pressure over THAAD. Beijing’s economic retaliation has included the ban on selling tourist packages to Korea as well as cancelled concerts and a block on Korean entertainment content being uploaded to streaming sites.

According to a new report from the Korea Institute for Industrial Economics and Trade (KIET), “China’s ban on South Korean cultural imports will amount to 5.6 trillion won (US$5.02 billion) and 15.2 trillion won (US$13.6 billion) in direct and indirect damage in the consumer goods distribution sector” if it continues for six months. New numbers from the Korea Tourism Organization show a 66 percent year-on-year drop in Chinese visitors in April, driving much of the estimated losses for industries such as clothing and cosmetics.

“It’s quite difficult for South Korea to improve its relations with China because public understanding of China has deteriorated over several months,” Choi said. “So unless there is a positive sign coming from China on this economic pressure, it is very unlikely for the South Korean government to improve drastically its relations with China.”

Now that China seems to be offering an olive branch, public opinion may begin to shift back in Beijing’s favor. But after months of panicked headlines over China’s latest crackdown, it’s unlikely that one fantasy romance drama will be enough to turn things around entirely.

At this point, Beijing may continue to roll back its content and tourism bans in the hopes of wooing President Moon to their point of view, or as a face-saving measure. Either way, though, Chinese leadership would be ill-advised to hold their breath for a THAAD removal.

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Image from LG전자’s photostream on flickr Creative Commons.

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Challenges in Relations with the U.S. under the Moon Administration

This is the seventh in a series of blogs looking at South Korea’s foreign relations for the new Korean administration. The series also includes blogs on relations with North KoreaChina, Japan, Russia, the European Union, ASEANAfrica, the Middle East, and Latin America

By Kyle Ferrier

The United States is a crucial security and economic partner for South Korea. Not only is the U.S. treaty obligated to defend South Korea, but 28,500 American troops are stationed below the DMZ. Should an armed conflict arise on the peninsula Washington would assume operational control (OPCON) of South Korean forces. Since its implementation in March 2012, the KORUS FTA has helped to secure the U.S. as South Korea’s second largest trading partner, making it the cornerstone of the bilateral economic relationship. While the strength of these ties is built on a foundation of shared values transcending leadership transitions over the years, U.S. President Donald Trump has openly disputed fundamental aspects of the relationship. For the newly elected South Korean President Moon Jae-in, just as central to resolving the issues raised by Trump will be understanding his approach to foreign affairs.

Trump won the U.S. presidential election last November on a platform of radical change. In contrast to the mood of Obama’s campaign in 2008 which employed slogans such as “Hope” and “Yes We Can,” Trump’s “Make America Great Again” complemented his bleak portrayal of a broken American system abused by elites and foreign countries alike. Trump often put South Korea in his crosshairs, claiming they did not pay enough for U.S. troops stationed there—going so far as to suggest withdrawing military personnel in exchange for allowing Seoul to have nuclear weapons as a cost saving measure—and criticizing the KORUS FTA for destroying U.S. jobs.

Once elected, Trump was quick to reverse course on the alliance, assuring President Park of U.S. commitment just one day later. Since then South Korea has hosted a steady stream of senior U.S. officials, including Defense Secretary Jim Matthis, Secretary of State Rex Tillerson, Vice President Mike Pence, and most recently CIA Director Mike Pompeo. Although these visits are an extension of initial efforts to reassure Seoul, they are contrasted by Trump’s “disruptive” approach to foreign policy, which draws on his campaign rhetoric, prioritizes his interpretation of American interests, and is underwritten by unpredictability. The disruptive approach is seemingly being applied to adversary and ally alike, which directly impacts South Korea through U.S. policy on North Korea as well as issues of alliance management and bilateral trade.

The Trump administration has repeatedly stated Obama’s second term policy of “strategic patience” towards North Korea is dead, yet it may just be going by a different name. At the onset of his presidency, Trump was relatively quiet on North Korea, with some hoping this might be interpreted as a willingness to talk with Kim Jong-un. However, since mid-March the administration has taken a more forceful stance. Secretary Matthis first announced the end of “strategic patience” on his trip to Seoul. Soon after, multiple senior officials and even Trump himself claimed military options were back on the table, particularly a pre-emptive strike against North Korea. Then, after a two-month policy review, the administration released its agenda of “maximum pressure and engagement,” which some have noted is remarkably similar to “strategic patience.” Both are centered on pressuring Beijing to influence Pyongyang and waiting for credible indications from the North that they are willing to reduce their illicit weapons programs. Despite posturing otherwise, security realities in Northeast Asia look to be constraining Trump to largely continuing Obama’s approach, at least for the time being, which is more than can be said for alliance management and trade relations.

Although Trump seemed to be shying away from campaign calls for Seoul to pay more for U.S. military presence on the peninsula, recent comments raise new questions, particularly for an upcoming milestone in the alliance. Trump’s call for South Korea to pay $1 billion for the THAAD missile defense system in an April 28 interview was refuted by National Security Advisor H.R. McMaster only a few days later. However, it was not enough to erase the negative impact on the public discourse in South Korea, unnecessarily complicating Moon’s promised domestic review of THAAD’s deployment. The president’s comments also raise questions over how he may attempt to shape the renewal of the Special Measures Agreement (SMA) that is set to expire at the end of this year, which governs the burden sharing arrangement. It is certainly conceivable that Trump may influence SMA negotiations by similarly calling for Seoul to contribute more to the alliance, including the potential to leverage OPCON.

The last major challenge for the Moon administration will be addressing Trump’s criticism of the KORUS FTA. Trump has repeatedly attacked the trade deal, citing the U.S. bilateral trade deficit with South Korea, though it is still unclear if he will pursue the actions he has espoused. KORUS was one of only two trade agreements singled out for not meeting expectations in The President’s Trade Policy Agenda released by USTR, the other being NAFTA. Trump recently suggested that he might terminate the agreement if South Korea was not open to renegotiations, similar to the approach he has taken with NAFTA.

Whereas the relevant senior U.S. officials have attempted to counter Trump’s disruptive approach to North Korea and the alliance, competing coalitions within the administration on trade further obscures how U.S. policy might be carried out. On the one hand, there are those who favor policies more traditionally associated with protectionism: Secretary of Commerce Wilbur Ross, Director of the new Office of Trade and Manufacturing Policy Peter Navarro, and USTR nominee Robert Lighthizer. And on the other are those who support greater global engagement: Director of the National Trade Council Gary Cohn and Senior Advisor to the President Jared Kushner. Although it is not yet clear how the U.S. will seek to pursue new concerns over KORUS—despite generally favorable reports by USTR and the US International Trade Commission released in the past year—the first major hurdle will come at the end of June when Commerce and USTR are expected to release their findings from a major review of all bilateral trading relationships.

How soon the Moon administration attempts to address these challenges with the United States will significantly dictate their potential impact on U.S.-South Korea relations. Whether it is growing pains or a more structural issue, the Trump administration’s implementation of foreign policy so far has negatively influenced South Korean public opinion. While the newly adopted policy of “maximum pressure and engagement” is remarkably similar to “strategic patience,” the process of getting there raised serious questions about U.S. credibility through concerns such as the location of the USS Carl Vinson and the perception that Washington would pre-emptively strike North Korea without consent from Seoul. Efforts by senior U.S. officials to smooth over some of Trump’s more controversial remarks have helped to stabilize relations, but the U.S. loses face each time. Even so, there are still contentious remarks that have not been sufficiently addressed.

Recent polling shows Trump’s popularity in Korea has sharply declined—falling below China’s Xi Jinping who is punishing South Koreans over THAAD. Koreans still view the U.S. favorably, yet it is unclear how long this duality can be sustained. A poor public opinion of the United States would severely constrain Moon’s ability to successfully coordinate the issues Trump has raised, which should make early and direct dialogue with his counterpart in Washington a high priority.

Kyle Ferrier is the Director of Academic Affairs and Research at the Korea Economic Institute of America. The views expressed here are the author’s alone.

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Poll of Polls: South Korean Presidential Polls April 25-May 1

By Juni Kim

With the South Korean presidential election a little over a week away, frontrunner Moon Jae-in has maintained his lead while his closest competitor Ahn Cheol-soo continues to fall in the polls. Ahn, who nearly matched Moon’s polling numbers in early April after a surge in support, has dropped off considerably in the past two weeks. Meanwhile, conservative candidate Hong Joon-pyo continues to rise in the polls with the largest increase in support (4.2% over last week’s poll of polls) among the presidential contenders.

The shift in support between Ahn and Hong is likely due to conservative voters turning towards Hong’s more traditionally right-wing appeal and Ahn’s underwhelming performance in televised debates. Although the conservative vote is still split, Hong is now the most preferred candidate among self-identified conservatives at 36% (compared to Ahn’s 29%) according to the latest Gallup Korea poll, and 42% of conservative voters indicated they had a more favorable view of Hong after watching the television debates.

 Poll Average Graph Week 2

Although the shift in the polls is promising for Hong’s camp, an upset election result by either Hong or Ahn is unlikely at this point. Both candidates had the lowest marks among general voters for their performances in the debates, and Moon has maintained his polling lead over the past few weeks. 221, 981 votes have already been cast in last week’s overseas voting, including over 48,000 ballots cast in the United States, and early voting starts in South Korea this Thursday. Politics, especially in recent years, is subject to stranger than fiction twists and turns, but barring a monumental “May Surprise,” South Korea is likely to have its first progressive president in nearly a decade.

The polls included in our aggregate poll are from listings on the South Korean National Election Commission’s website. For more information, you can visit this page and see the polling data (in Korean) from each research organization. Our aggregate poll includes polls conducted by Realmeter, Gallup Korea, ResearchView, Hankook Research, R&Search, KSOI, MetriX, and Ace Research. Last week’s poll of polls was updated with polling information from the week of April 18-24 that has been released since the prior blog was published. The updated numbers for last week’s polling results are as follows: Moon Jae-in (41.3), Ahn Cheol-soo (30.6), Hong Joon-pyo (10.1), Sim Sang-jung (4.2), and Yoo Seung-min (3.6).

Juni Kim is the Program Manager and Executive Assistant at the Korea Economic Institute of America (KEI). The views expressed here are the author’s alone.

Images created by Juni Kim. Photos from 박근혜 공식앨범‘s flickr page, Chihoon Byun’s flickr page, 철수 안’s flickr page, ddeohee’s Twitter page.

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About The Peninsula

The Peninsula blog is a project of the Korea Economic Institute. It is designed to provide a wide ranging forum for discussion of the foreign policy, economic, and social issues that impact the Korean peninsula. The views expressed on The Peninsula are those of the authors alone, and should not be taken to represent the views of either the editors or the Korea Economic Institute. For questions, comments, or to submit a post to The Peninsula, please contact us at ts@keia.org.