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Will governance solve the inequality problems surrounding COVID-19 vaccines?
KIEP Perspective Will governance solve the inequality problems surrounding COVID-19 vaccines?

Decameron, a collection of tales by Giovanni Boccaccio, is an entertaining series of one hundred stories written in the wake of the Black Death. The stories are told in a country villa outside the city of Florence by ten young noble men and women who are seeking to escape the ravages of the plague, the Black Death, that hit Europe in the 14th century.

Heungchong Kim
Development of the IT Industry and Structural Transformation: Focused on the Russian IT Industry and Korea-Russia IT Cooperation
World Economy Brief Development of the IT Industry and Structural Transformation: Focused on the Russian IT Industry and Korea-Russia IT Cooperation

Russia has been chronically suffering from a structural problem that its economy heavily relies on energy resources. The long-standing and excessive economic dependence on the energy sector decayed qualitative growth through productivity, necessary for long-term growth as the economic transition to mid- and high-value-added manufacturing gets delayed. In other words, Russia’s economic growth since 2008 can mostly be attributed to quantitative growth driven by physical capital and labor input. This study analyzes the impact of innovation in the IT sector on the Russian economy from a structural transformation perspective. More specifically, the research theoretically examines how technological innovation in the IT sector helps address the structural transformation delays that middle-income countries have suffered, and investigates the possibility of IT cooperation between Korea and Russia in policy and technological aspects.

Minhyeon Jeong, Jiyoung Min, Dongyeon Jeong and Sang Hwan Kim
What determines a country's current account and exchange rate? - a tale of two external drivers
World Economy Brief What determines a country's current account and exchange rate? - a tale of two external drivers

To make a meaningful response logic to future exchange rate pressures, we monitor the determinants of the current account and exchange rate. First, according to the analysis of current acccount determinants, the current account imbalance will gradually ease from a long-term and structural perspective if the domestic financial market develops or access to the international financial market is strengthened. In addition, existing structural current account estimates that do not take into account international financial market conditions may have underestimated the structural current account balance of emerging countries such as Korea. Second, based on the analysis of the currency determinants, we can argue that the weak won is structurally inevitable due to the weak yuan.

Minsoo Han, Sungbae An, Hyosang Kim, Subin Kim and Jinhee Lee
ASEAN’s exit strategy from the Covid-19 pandemic and Korea’s contribution
KIEP Opinions ASEAN’s exit strategy from the Covid-19 pandemic and Korea’s contribution

ASEAN has developed its exit strategy from the Covid-19 pandemic, the ASEAN Comprehensive Recovery Framework (ACRF), endorsing the ACRF and its implementation plan at the 37th ASEAN Summit in November 2020. The ACRF and its implementation plan provide immediate measures and mid- to long-term measures for each phase of recovery. The ACRF includes five broad strategies: (i) Enhancing Health Systems, (ii) Strengthening Human Security, (iii) Maximising the Potential of Intra-ASEAN Market and Broader Economic Integration, (iv) Accelerating Inclusive Digital Transformation, and (v) Advancing Towards a More Sustainable and Resilient Future, which will be pursued through a total of 40 key priorities.

Mee Ryung La
What’s in the New Southern Policy Plus? An ASEAN Perspective on Building Niche-based Pragmatic Cooperation with South Korea
World Economy Brief What’s in the New Southern Policy Plus? An ASEAN Perspective on Building Niche-based Pragmatic Cooperation with South Korea

It is clear that the NSP started off with the right messages and many Southeast Asian countries have been receptive to the initiatives. Despite the pandemic bringing a lot more challenges in implementing the policy initiatives, the NSP Plus has envisioned an innovation-oriented cooperation by transforming the traditional face-to-face operations to electronic and digitalized management. Public health cooperation is understandably the immediate focus, but such cooperation should be also seen as long-term fulfilment of the cooperation on the People pillar in the NSP. Infrastructure connectivity and South Korea’s cooperation in the building of an evolving East Asian regional architecture respectively enhance the Prosperity and Peace pillars. With patience, dedication, and commitment, the NSP Plus will be a long-lasting foreign policy legacy of Moon that brings benefits to Korea, ASEAN, and regional stability.

Chiew-Ping HOO
South Korea’s New Southern Policy as an Open Regime: A View from Southeast Asia
World Economy Brief South Korea’s New Southern Policy as an Open Regime: A View from Southeast Asia

There are four ways on how the NSP Plus could be further improved. First, to avoid policy limitations and maximize the room for supply chain resiliency and functional cooperation, the coverage of the NSP countries can be expanded apart from ASEAN and India. Second, South Korea can employ the concept of Third-Party Market Cooperation (TPMC) or the pursuit of joint ventures or partnerships with other countries in maximizing capacity-building in third countries (NSP countries). Third, South Korea can help strengthen ASEAN institution-building, regionalism and internal balancing by applying a similar policy framework to the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) just as it does to the Mekong Region. Fourth, there needs to be more reciprocity or two-way interaction in the NSP so as to not make it seem that ASEAN is only on the receiving end of South Korean generosity. Finally, it is important to note that a change in the South Korean administration does not necessarily spell the end of the NSP just as the US’ Pivot or Rebalance to Asia of the Obama Administration was remodeled to the Indo-Pacific under the Trump administration.

Aaron Jed Rabena
Development of Environmental and Labour Provisions in FTAs
World Economy Brief Development of Environmental and Labour Provisions in FTAs

Trade-related issues such as market access and tariff elimination or reduction have been the main concerns of free trade agreements or FTAs since the early 2000s. With more attention recently given to the concept of sustainable development, however, a growing number of countries start to share a common understanding that global and concerted efforts for environmental and labour protection are crucial for sustainable growth. In this context more of the recent FTAs focus on non-trade concerns such as protection of the environment and workers. A leading example is the FTA between Korea and the EU. Ever since the Korea-EU FTA, the EU has included a chapter on “Trade and Sustainable Development” or “TSD” to extensively provide for environment and labour obligations in its bilateral trade agreements. Further, it is noteworthy that the U.S. and the EU have resorted to dispute settlement and enforcement mechanisms within their FTAs to ensure that their trade partners effectively implement environment and labour obligations at the domestic level. For instance, on December 17, 2018, the European Commission requested a consultation to Korea under the Korea-EU FTA on the grounds that the Korean government had not shown sufficient efforts in ratifying the remaining four of the eight fundamental ILO Conventions and thus acted inconsistently with the TSD Chapter of the same FTA. This is the first case that the EU has ever initiated a dispute settlement procedure under a TSD chapter. The Panel of Experts was composed on December 30, 2019, and the final report was recently published on January 25th, 2021. Against this background, for consideration by the Korean government this Brief discusses the emerging trends of environmental and labour provisions in U.S. and EU trade agreements (with a special emphasis on the USMCA), particularly focusing on the aspect of ‘enforceability’ of such obligations.

Cheon-Kee Lee, Jukwan Lee, Hyeri Park, and Yoo-Duk Kang

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