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Troy Stangarone
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Troy Stangarone

Troy Stangarone (ts@keia.org) is the senior director of congressional affairs and trade at the Korea Economic Institute.

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Troy Stangarone

COVID-19 requires bold economic measures

By Troy StangaroneThe situation that the world faces today is grave. Borders are being shut and economies are coming to a standstill. French President Emanuel Macron put it simply, “We are at war.” While the crisis being fought today is not a war in the sense of troops in battle, lives are at stake and the tactics used to preserve them will have significant economic consequences.The first priority must remain dealing with the public health emergency from the coronavirus. Despite steps to shut borders and isolate countries, the coronavirus can most efficiently be tackled through cooperation. Here South Korea can help the international community. Its rapid expansion of testing, transparency, and use of technology have helped to flatten the curve of COVID-19's spread. But an important secondary consideration is how nations handle the economic consequences of containing the spread of the coronavirus.As the world's major economies resort to social isolation policies to stop the spread of COVID-19, economic activity is increasingly becoming constrained. Four former chief econom

Mar 25, 2020By Troy Stangarone
Troy Stangarone

Realistic US approach to North Korea

By Troy StangaroneEvery U.S. president ideally wants to head into their re-election campaign with foreign policy successes to tout to voters. However, foreign policy has traditionally had very little impact on U.S. elections unless there is something deeply wrong in the policy. In the case of the current talks with North Korea, this history suggests there is likely to be little progress until after the November election.The potential downside to foreign policy for a president's re-election is perhaps underscored by the Vietnam War. What began under the Kennedy administration as an effort to support the South Vietnamese government with military advisers in time became a deeply unpopular war in the United States as casualties grew with no end to the conflict in sight. It slowly eroded President Lyndon Johnson's public approval and became a significant factor in his decision not to run for re-election in 1968. Even foreign policy achievements have often not translated into electoral success. Despite George H.W. Bush's stunning foreign policy successes in peacefully managing the end of t

Feb 26, 2020By Troy Stangarone
Troy Stangarone

Can income-led growth succeed?

By Troy StangaroneIt's a seemingly straightforward question, does raising the pay of low wage workers help to boost workers' income or hinder employment? It is also an increasingly relevant question since President Moon Jae-in began pursuing a policy of income-led growth.Under this policy, the minimum wage increased by 16.4 percent in 2018, an additional 10.9 percent last year, and is set to rise 2.9 percent this year.When the policy was first introduced, it faced immediate pushback. Even before the minimum wage increases took place, Korea's minimum wage was on par with the United Kingdom's and higher than Japan's as a percentage of median income.Given these levels, critics of the administration embraced traditional economic concerns that raising the minimum wage would raise the cost of doing business and reduce the number of jobs available to those in society who are most in need of employment.These concerns were backed by a 2019 study by the U.S. Congressional Budget Office (CBO) that found a Democratic proposal to raise the U.S. minimum wage to $15 an hour would cost 1.3 million j

Jan 27, 2020By Troy Stangarone
Troy Stangarone

Berlin Wall and Korean division

By Troy StangaroneIn August of 1989, a group of 600 East Germans were allowed to cross the Hungarian border into Austria for the first time. In the weeks to come, tens of thousands more would follow them, setting in motion a series of events that would see the Berlin Wall come down Nov. 9. We tend to remember the high points of Eastern Europe's struggle against communism and place less focus on the challenges those states faced afterwards. Despite most East European states having joined the European Union, the region has seen some democratic backsliding. Hungary now practices what it calls illiberal democracy and Poland has seen democracy weaken as well, while some of the smaller former Soviet countries such as Moldova have struggled economically.Notwithstanding the setbacks, Eastern Europeans still generally see the end of the Cold War as a good thing. With the notable exception of Russia, a poll by the Pew Research Center indicates that Eastern Europeans see the shift to a multiparty democracy and market economy as a positive. But there are mixed views in the region on whether the

Nov 26, 2019By Troy Stangarone
Berlin Wall and Korean division
Troy Stangarone

Turning darkness to light in North Korea

By Troy StangaroneFrom outer space North Korea is engulfed in a sea of darkness at night. Looking from afar there would be very little reason to believe that roughly 25 million people live on the other side of the Demilitarized Zone (DMZ).As nighttime satellite imagery suggests, power is a scarce resource in North Korea. Beyond the elite, Pyongyang has largely failed in providing power to the rest of the country. According to estimates from the International Energy Agency, only 11 percent of rural North Koreans have access to electricity and only 36 percent of the country as a whole does.Of course, North Korea isn't the only country that largely remains dark at night. This is common in rural parts of Haiti and a number of countries in Africa. However, North Korea is an outlier in Asia. The only other country in the region with rural access to electricity even below 50 percent is Myanmar where 46 percent of the rural population has access to electricity.Given North Korea's underdevelopment, the United States and South Korea need to consider how best to pursue economic growth in North

Sep 25, 2019By Troy Stangarone
Troy Stangarone

US should back South Korea in talks with North

By Troy StangaroneWith the conclusion of military exercises between the United States and South Korea there is an expectation that working level talks between the United States and North Korea may resume.After Donald Trump and Kim Jong-un held their brief summit in the DMZ at the end of June, the two leaders agreed to resume working-level negotiations. Those talks never got off the ground due to the recent U.S.-South Korean joint military exercises.While it was never likely that North Korea would agree to negotiate while the exercises were ongoing, Kim did pledge to Trump in his recent letter that they would resume once the exercises were concluded.The lack of working level talks has been one of the failings of the current iteration of disarmament talks with Pyongyang. While Trump's decision to meet with Kim helped to change the dynamics and ensure that the U.S. is talking with the ultimate decision-maker in North Korea, the process has also become too top heavy. That became evident after the failure to reach an agreement in Hanoi.Neither Trump nor Kim have the necessary expertise to

Aug 26, 2019By Troy Stangarone
Troy Stangarone

Japan escalating conflict with Korea

By Troy StangaroneWhen the Japanese Cabinet met on Aug. 2, it had the option to de-escalate the current conflict with South Korea. Its frustrations over the South Korean Supreme Court decision on compensation for forced labor victims had already been expressed with the restrictions imposed in early July.Instead, Japan chose to escalate the conflict despite the United States asking both Japan and South Korea to refrain from taking measures that would further enflame the situation.By removing South Korea from its “whitelist” of favored trading partners, Japan has raised the level of uncertainty in the economic relationship by making it more difficult for South Korea to import key components.As global value chains have expanded, most firms have adopted a “just-in-time” model for supplies that have allowed them to increase efficiencies, reduce costs and more quickly adjust to changes in market conditions. This also means companies were able to reduce the amount of supplies they hold in inventory, making it easier to adjust to economic downturns. As a country on Ja

Aug 6, 2019By Troy Stangarone
Troy Stangarone

Japan risks harm to world trade

By Troy StangaroneWhen I started this column a year ago, I touched upon the importance of international trade rules for South Korea's economic future. While we still often think of trade in terms of lowering tariff barriers, the rules and norms that allow goods and services to flow freely and predictably are increasingly important. Unfortunately, adherence to those rules have grown weaker over the past year and the current standoff with Japan is symptomatic of a worrying trend.With some exceptions states have largely refrained from using national security exemptions to restrict trade in recent decades, but over the past year national security has increasingly been viewed as a way to impose tariffs or restrict trade in the pursuit of other objectives.Regrettably, the United States which has led the way in developing the current rules-based system that allowed more nations to prosper than at perhaps any time in human history has been leading the way in utilizing questionable national security rationales to achieve other objectives. Not surprisingly, Japan is learning from the United St

Jul 22, 2019By Troy Stangarone
Troy Stangarone

We need new economic model for North Korea

By Troy StangaroneAs part of the talks with North Korea since the beginning of 2018, the United States and South Korea have offered the prospect of an improved economic future if Pyongyang were to dismantle its nuclear weapons program. But achieving that future will require the North to engage in domestic economic reforms.In the past, suggestions for an economic model for North Korea to emulate have often gravitated toward the paths taken by China and Vietnam. China has often encouraged North Korea to take the same steps it did toward liberalizing its economy, and there is no doubt that Xi Jinping, who visited North Korea last week, has continued to highlight the success of the Chinese model to Kim Jong-un.In the lead-up to the Hanoi summit, Vietnam's success was also touted as a model for the North, with speculation that Kim might have signaled North Korea's interest in foreign investment by visiting one of Samsung's facilities there.On the surface, the Chinese and Vietnamese models make sense and have insights to offer. Both are examples of economically developing Communist states

Jun 24, 2019By Troy Stangarone
  • Trump considers visiting DMZ
Troy Stangarone

Can womenomics solve demographic decline?

By Troy StangaroneThe world's population is aging. The population of those over the age of 60 is growing faster globally than any other age group. This is especially true in much of the developed world where countries like Germany, Italy, and Japan were among the first to become super-aged societies with more than 20 percent of their populations over the age of 65. South Korea, however, will experience the same transition in a much shorter timeframe than most countries.For European countries such as Germany and Italy, population aging was gradual as they moved from an aging society with 7 percent of the population over the age of 65, to a super-aged society over the course of a little less than 80 years for both countries. In the case of Japan, the transition was a relatively brisk 36 years. For South Korea, it will likely only take 26 years to move from an aging society to a super-aged society.South Korea's shift from a relatively young society to a super-aged society is the result of one very positive trend, but also one that is concerning for the future.South Koreans are living lo

May 29, 2019By Troy Stangarone
Can womenomics solve demographic decline?
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