Economic crisis and global standards

By Eugene Lee

Amid rising commodity and energy prices and falling property prices, Korea is reeling from the burden of decreasing exports and a depreciating won. Many are desperate for a breather from the troubles and are wondering what the best solution is for the future. My take is to follow global trends and adjust the economy according to international standards.

Some in the Yoon administration see the semiconductor industry as a good bet for a bright economic future. However, these hopes have already been dashed, as the prices have tumbled, keeping major domestic producers, Samsung and SK Hynix, in the red for the past several months. The problem is also exacerbated by the worsening international market, where major U.S., Japanese, and Taiwanese producers are banding together against China, leaving South Korean producers out in the cold. And it is understandable, as South Korea has always had deep business interests in China, since it began producing semiconductors and has had little or no incentive to develop markets elsewhere. Even if it has made a promise on the Chip 4 Alliance, it has yet to be followed through.

A huge chunk of money has already been allocated to further the semiconductor industry. However, semiconductors will only take you as far as your understanding of silicon's limits allows. In my understanding, the Fourth Digital Revolution is not about one particular industry, it is about a symbiosis of all technologies, where semiconductors are just one of the small bricks. If we are to improve our education, we can create a conducive environment for integrated multi- and interdisciplinary research and application of nuclear fusion, quantum physics, lasers, nanophysics and chemistry, AI and so on.

The current administration is trying to resolve the situation with policies that are at least half a century old. I agree that the proposed reforms in the three areas of labor, education and pensions are absolutely necessary. But to this day, all we have heard is how important and unavoidable the change is, but nothing about what kind of change is being envisioned. So far, the only details on labor reforms have been about a possible increase in working hours. As I mentioned in my earlier writings, this will not help, but rather will throw South Korean businesses back in time.

President Yoon is trying to convince himself and everyone else that his recent grand tour abroad has been a success. But if you look deeper, you may realize that what is happening now is actually leading the whole country towards a cliff.

Starting in the UAE, President Yoon's trip was a spectacle, which reminded me of former President Lee Myung Bak's "resources" diplomacy a decade ago, where the thinking pattern remained very much the same - old ways, old technologies and old dependency on fossil fuel. Instead of much-needed domestic investment in energy infrastructure, a large sum of money was promised to projects for who knows what kind of benefits.

The consequences of President Yoon's "slip of the tongue" is now opening the door to Iran's unfriendly moves, be it taking our citizens hostage or even blocking passage to our ships through the Strait of Hormuz ― a key oil supply line for South Korea and the world.

Then there was the World Economic Forum, where President Yoon spoke against the division of the world into blocks. Good idea, but Greta Thunberg, the climate activist, accused the participants of throwing the world "under the bus."

Finally, President Yoon floated the idea of acquiring nuclear weapons in his nuclear weapons declaration. Not only would it be prohibitively expensive to establish a new military division and infrastructure for storing and managing nuclear material, but the international community, led by the IAEA, would immediately cut off supplies of any nuclear material, bringing about an economic and diplomatic retreat from the rest of the world, which took decades to build.

Most importantly, it will agitate China and make South Korea a number one target. No matter how appealing the prospect of a nuclear weapons program may be, it will not provide the desired security. Instead, it will destabilize the whole region and may even push Japan toward nuclear armament.

Maybe one of President Yoon's ambitions is to have his own "Zelenskyy moment" in the U.S. Congress, which would obviously appear "so good" domestically. But I fear that to secure his place in the spotlight, Yoon may seek even further polarization with North Korea, and may try to create "a mini-war" with Kim's regime to prove his point. Plus, a small "war" can quickly become a big one and engulf the whole peninsula.

In addition, if we haven't learned anything from the ongoing Ukraine-Russia conflict, then we need to understand why the U.S. is willing to put so much on the line in the conflict, precisely because of the promise made back in 1994 with denuclearization to keep Ukraine's sovereignty untouched. My call to the ruling party is to reign in the president and his agenda, and to try to prevent any damage to our national interests.

After all, where South Korea should be looking is the markets and regions where it already is. Trying to explore, or just bolstering, its presence will be just fine for the country. For example, the EU is working on ways to offset carbon emissions even further, it may soon introduce "green" or carbon taxes on all imports. And we need to start making changes accordingly to future-proof our economy. So, my advice is to try to understand what progressive parts of the world want, to modernize ourselves ensuring South Korea's economic future, if not its relevance.

Eugene Lee (mreulee@gmail.com) is a lecturing professor at the Graduate School of Governance at Sungkyunkwan University in Seoul. Specializing in international relations and governance, his research and teaching focus on national and regional security, international development, government policies and Northeast and Central Asia.