By Michael Ha
Staff Reporter
A leading futurist and a global advisor to President Lee Myung-bak sees a brave new world on the horizon. In his vision for a new economic paradigm, he sees a league of Asian nations united by a common economic market and a common currency, much in the mold of the European Union.
French professor and author Guy Sorman says this vision is not just pie in the sky. What's more, he predicts Korea and Japan, brought together by common economic interest, will spearhead this grand effort.
``If I were to make a guess or a bet, I am quite sure that sooner or later, you will have, between Japan and South Korea, a kind of a union, like in Europe ― with a common currency," Sorman said.
In an interview with The Korea Times this month, he envisioned an ``Asian Union" that starts with Korea and Japan that would grow to include surrounding nations. He acknowledged it may not be easy for the two sides to come together to work on a common economic system. There are still deep-seated hostilities. The recent uproar over Dokdo islets in the East Sea is just another example of how quickly the Korea-Japan relations can sour.
But even in Europe, there were animosities between nations and creating a union of European nations indeed seemed like a long shot, Sorman noted. He said nations working together to build a union helped them look toward a common future. European nations built the EU not because of their history but despite it, according to Sorman.
"If France and Germany were able to do that, after 1000 years of war, Korea and Japan could do it too," he said. ``If you look at Europe, this is all part of burying our hostile past."
``The purpose of this kind of an economic union is to bury the past and to demonstrate to people that you now have a common interest. Nowadays, young people in France and Germany can hardly understand why their two nations went to war," Sorman explained.
``This can be done in Asia, too. I think the process should start between Korea and Japan, and then other nations in the region, maybe China in the future, the Philippines, maybe Indonesia. One day it could incorporate Taiwan as well. They may all become interested."
When the European Union first got underway, Sorman said, ``It started basically between France and Germany. That formed the core of the alliance. Then Italy, Spain, the Netherlands, the United Kingdom, they all joined the process. So someone has to start."
The engine for this kind of Asian Union can only be Korea and Japan, he said. `` I do think that in the future, you will have a much stronger reconciliation between South Korea and Japan. Both governments should start working on this. It would be quite a dramatic and impressive gesture when the Korean President and the Japanese Prime Minister say, `Okay let's build an economic union.' It will make history. And it will make the region much safer and more prosperous in the future."
There is another economic issue Korea must tackle in order to become a truly global economy: its rigid labor market. Sorman argued that the Korean government should address the labor market inflexibility and the problem of contract and non-contract workers.
``One thing that must be done is the reform of the labor market and add more flexibility," he said.
``A major problem in South Korea is that many foreign companies do not invest in South Korea. Why? There are two reasons. First, because there are still heavy regulations. Second, there is no labor flexibility," Sorman argued.
``The trade unions are very strong. Foreign companies are not very attracted to the Korean labor market because after all, if I am building a factory, why not build it in countries with more flexibility in the labor market? And then I can recruit people because I can fire people. That's the way the labor market works."
Further, there are two types of workers in South Korea. ``You have workers who have contracts and you cannot get rid of them whether they are good or bad."
``And there are other workers who have no contracts. They are out of the system. This division, I think, is very unfair. It's a system where people do not have the same rights. So I think this system in the labor market should be destroyed," Sorman said.
Sorman added: ``Both the trade unions and the government should keep in mind that to reduce unemployment, especially among the young people, you must bring more investors to the market, and to bring more investors to the market, you must have more flexibility in the market."
``Well," he added, ``but maybe this is easier said than done."
Sorman also spoke about the Korean education and university system. He called it one of Korea's glaring weaknesses.
``It seems to me that one of the weaknesses of South Korea right now is its educational system, the university system, which is extremely bureaucratic and is characterized by the Confucianistic style, which is not very well adopted to the global community," he said.
``But I don't want to be too severe because when I look at, for example, the country's innovation, South Korea is doing quite well. If you look at statistics about patents, for example. The United States comes first, Japan comes second, Europe comes third, and then South Korea comes fourth."
``South Korea, which is relatively small, is more innovative ― and this can be quantified by the number of patents ― than Russia and China, which is incredible! You have, every year, more Korean patents than Chinese patents, which shows Koreans are very innovative," Sorman said.
``These figures are not well known but they are very impressive when you look at who is patenting what every year. China: nothing. Russia, nothing. The only players in terms of innovation are the United States, Japan, the European Union, and South Korea and then India."
Sorman added: ``China and Russia, right now ― they are not doing anything in terms of innovation. And I think South Korea could do much more by building a more competitive university system, by attracting more foreign professors, foreign students."
``The university system is really very closed ― it needs to be globalized. This is what I have been telling President Lee Myung-bak: this is a major challenge," Sorman said.
``I mean all the rest of the problems are well known: you must deregulate more and open up the service sector and the banking sector to competition, everybody knows that everywhere. That's part of the government platform."
But on higher education, there is not much focus, he said. ``And I think there really is room for improvement. The educational system is too closed, too bureaucratic and too Confucianistic, it seems to me. This is not a value judgment. It's just inconsistent with South Korea's ambition to become a global player."
``If you look at efficient U.S. universities, they have a lot of financial resources," he observed. ``So I think more private and public resources must be brought into the Korean university system. And big Korean corporations are putting a lot of money in sponsoring art and things like that; I mean that's okay. But I think much more money should be put into the university system. And like in the United States, links between business and academics should be increased," he observed.
``One of the strengths of the U.S. academic system is that businesses are subcontracting a lot of research to universities. Universities are really an essential part of the economic life in the United States. There is no border between business and academics. I think this is efficient and I think this is something that should be done in Korea."
``And also, Korean universities should make more links with European, Chinese, Russian or the U.S. universities and have more exchange programs. All these are basic steps that can be taken in order to have a more cosmopolitan flavor," he said.
``Also, one other problem, which will be a rising problem in Korea, is immigration. South Korea already has one million immigrants. It's not an easy problem to solve, but it's one that Koreans will have to deal with."
But all in all, Sorman said he has always maintained a positive outlook for the country.
``I've been studying South Korea for more than 20 years and, you know, I am always rather upbeat and positive about South Korea's prospects," he said.
``Korea basically chose the right strategy in politics and the economy. In the 1960s, South Korea chose the free market and trade economic system. Today, everybody is following the same road," he said. ``South Korea is the only genuine democracy in this part of the world. In Japan, it's long been a one-party system. So South Korea is a genuine democracy and this brings a great advantage for Korea's future."