This study aims at finding out (international) cooperation in the fields of culture, economics, and environment for promoting Korea-Cuba relations. Expected delaying of normalization of diplomatic relation between S. Korea and Cuba which it is not clear how soon this would happen, our research question focused on what strategic choices could be helpful to promote future relations for both countries.
Of course, it could be consider a giving up strategy as one-side method in negotiation of normalization of diplomatic relation between S. Korea and Cuba. However, even if S. Korea could not obtain overwhelmingly large benefits with getting in a situation, unilateral concessions would not be considered in a good way for international negotiation. If S. Korea also recognize the limited situation with win-set changes, such as by using strategies that would set a deadline for when given that it has limited, or no choice, this kind of pushing strategy is to work as a disadvantage for better negotiation. Beyond giving up or pushing strategy, therefore S. Korea must consider the changing market situation in Cuba such as a closely related with a possibility of America’s embargo release for Cuba in near future and a possibility of changing political circum stances, etc. and rather than being in a hurry to step on a course for strengthening ties, S. Korea must take actions in a way of more realistic methods with a long-term process for making normalization of diplomatic relations for both countries.
The other method is to creating special conditions by changing circumstances and inducing Cuban concession with some ways as below: First, as a little bit easy and a possible option, ‘Move Cuban Political Leaders’. We understand that Cuban political leaders have played a great role as important decision-making entity, especially in the context of diplomatic policy-making structure established more strongly and for a long time in particular after Cuban Revolution in 1959. By providing them strong incentives and leading them to keep away from N. Korea, it will lead to normalize diplomatic relations with S. Korea. However, in fact this strategy is not easy to realize as well, because Cuban diplomatic policies have been sustained for a long time on a basis of upholding loyalty and a cause for their foreign policies, especially with N. Korea as well.
Second, ‘Move N. Korea’. As Cubans make sense to talk about, “it depends on improvement the relationship between S. Korea and N. Korea” when asked about the most serious obstacle for normalization of diplomatic relation between S. Korea and Cuba and many point out by saying that recovering of relations with the communist N. Korea for S. Korea is the most important thing. However and in reality, there still remain a serious question about how would S. Korea be able to take a signal from N. Korea that it does not matter for the normalization and move into peace relation for both ones.
Third, ‘Move the USA’. currently the USA accomplished lots of a diplomatic achievements, such as diplomatic normalization with Cuba, reaching a great settlement on nuclear negotiations with Iran, etc. and from this same position and participation, the USA will play a leading role by participating a peace-building process and will contribute to rebuilding denuclearization zone in Korean Peninsula, as same as S. Korea and Cuban issue. Finally, ‘move the other neighbor country who has a good relationship with S. Korea and Cuba in Latin American region’. Of course, the third country who has friendly ties with both countries in Latin America could play as a leverage and persuade Cuba to join diplomatic negotiation. However, this strategy is also hard if we understand the complicated diplomatic geopolitics in Latin American region, in particular in the conditions of the dominant of left governments and other economic relationship as well.
Even this research identified there exists alternatives and methods mentioned above such as changing strategy and inducing the changing of circumstances, it is still hard to make a diplomatic normalization within a short period between S. Korea and Cuba. However, one principle which this research strongly suggest is that, regardless of when diplomatic relation achieved by using various strategies, it must be designed to improve relations with strategy and cooperation methods. Instead of considering when and result(e.g. normalization), this research focused more process and searched a various way of cooperation method, emphasizing on promoting human interchange and expanding people’s contacts, strengthening economic ties between S. Korea and Cuba, and finally two countries have a great potential for cooperation in a field of environment, or climate change issue.
Up to now, K-wave is booming and increasing friendly Korean image in Cuba and is another potential power, such as Korean companies who want to take advantage of Cuban opportunity through creating new business in Cuban market, or it helps an other catalyst to improve international development cooperation in the field of environment and sustainable development, climate change issue, all of these approaches will help to make a good relation naturally in near future even it will take a little bit long term each other.
Based on this awareness, cultural cooperation is possible with the following policy suggestions. We understand in many senses Korean culture and contents for entry into the existing Cuban market seems too early stage yet, because we can not know exactly what is the real consumer market and sometimes it is difficult to identify in-depth and various levels as well. However, already we have experienced and accumulated lots of materials and created useful methods for entering into the other Latin American cultural markets where are currently growing in the private sector. This kind of bench-marketing from other country in Latin America will be helpful to develop a new market approach for S. Korea into Cuba.
However, concerned about cooperation method and direction related with Cuban case, it must be more careful. Because of having a colonial history for a long time and economic blockade from the USA currently, sometimes Cuban cultural market has a great resistance against oppressive manner from other foreign culture. If we understand this national sentiment, S. Korea must adapt and access through just pure meanings of cultural exchange by mutual understanding and harmonizing it with in cultural contents (e.g. non-ideological materials), rather than showing off economic and technical superiority of S. Korea.
This kind of policy priority should be considered as an important guideline and adopted into real cultural cooperation activities each other. If we also understand the current popularity of the Korean culture and contents which is rising around the mania groups rather than the public in Cuba, cooperation must focus on appealing power and should have a high focus on selected targeting small groups and anticipating its spill-over to the public in near future. For example and based on the consumer survey, S. Korea should consider the popular ‘telenovela(television serial drama)’ as target type drama which match the tastes of Cuban consumers.
If we understand the main consumers for K-Pop is groups of teens and twenties and then they must be the first target for Korean television dramas, movies, etc. It is also necessary to introduce and access in conjunction diverse cultural contents, such as plays, musical, dance, and folk performances as well.
In addition, it is necessary international cooperation for building more broadcasting infrastructure in Cuba. and free showcase, fan autograph meeting will be good cooperation methods in enhanceing and expanding contact opportunity each other. In the case of Cuban consumers who enjoy Korean culture and if we consider the existing various and relatively diverse groups such as younger audience in K-Pop and other audience in movie market, and women and older people in dramas, so called 'line-up' is established at the moment. In the conditions of understanding this consumer variety in Cuba, from now the ‘line-up’ must be enhanced for every member of the household through creating an integrating genre that family member can enjoy all together. In other words, emphasizing the ‘family’ is the need to absorb all ages.
In the case of broadcast video contents, S. Korea-Cuba should participate in co-production process. if Korea has the varios skills and technologies in aspects of hardware(world-class level) for making broadcast video contents, Cuba has various culture, natural environment and artistic sensibility. It should combines and produce a high level of work. In order to enable the cultural exchange between S. Korea and Cuba, not only broadcast cultural content, it should be included literary and cultural festival, sports, education and there is a need to improve the exchange of medical fields as well. For example, authorities in both countries make a great effort to develop educational programs in the field of Korean cultural education and exchange, or invite Cuban experts who know Korean culture.
In economic terms, it is necessary to consider the following points. If we think the current USA- Cuba normalization and then in the case of release of economic blockade against Cuba in near future, Cuban economic growth is a matter of time. Korean economic cooperation toward Cuba in the short term and before establishing diplomatic relations, Korea should focus on expanding export items and volumes with Cuba as main goal. Expected sectors are construction equipment, IT communication, agricultural machinery for development of agriculture and natural resources. According to the analysis of KOTRA, automobiles and parts, hotel and home appliances, information and consumer communication devices, pharmaceuticals and medical equipment, mining equipment and processing machinery, etc. will be included.
However, after achievement of diplomatic normalization between S. Korea and Cuba, it will go further beyond only expanding economic trade . After normalization and in the short and medium term, economic cooperation with Cuba will be required granting of credit. From initiative and as a complement to minimize the risk of granting of credit, it will make more trade opportunities each other, including being guaranteed a stable sales for trading companies and exchange a bilateral investment, guaranteed by guarantee agreements for a stable economic activities each other.
Furthermore, after reviewing foreign investment and industrial development policies which are emphasized by Cuban authorities currently since 2008, this research finds out that Cuban government wants more foreign investments in the fields of energy, tourism industry and others(infrastructural parts), such as power generation, telecommunications, industrial complex, ports development, oil exploration, etc. For these, S. Korea can cooperate with Inter-American Development Bank(IDB) and other international financials by enhanceing multilateral cooperation channels.
The possibilitis or potentials of environment cooperation for both countries started from reviewing many national environmental strategies and sustainable development policies in Cuba. However, Cuba has lots of problem for sustainable development, such as the state budget deficit, labor shortages, poor environment management, capacity for sustainable development is quite low. In addition, in the process of economic open, reform currently it is now asking a new governance and become urgent for Cuban sustainable development model. Besides the various impacts of climate change : typhoon(hurricane), drought(increased water stress in Cuban), water management system, air and water pollution and biodiversity destruction, rising sea level threats(in the coastal lowland areas) are another matters of unsustaibable way of development and urgent issues for requiring international cooperation. S. Korea-Cuba environmental cooperation in the sustainable development dimension is required, especially in the parts of renewable energy development and greenhouse gas reduction sectors by providing economic incentives(adaptation and mitigation balancing) will reduce climate change impacts, natural disaster risk, etc. In this case GCF funding and technology transfer will be useful mechanism. 

 

 Egypt is one of the economy in the Middle East and North Africa with great potential in terms of population size and natural resource reserves. As well, it may realize economic growth and diversification through industrialization because it doesn’t depend on oil or natural gas excessively and currently has basic foundations in manufacturing sectors.
Starting from this assessment on the Egyptian economy, this study inquires into the appropriate direction of Egypt’s future industrial policy and, further, aims to propose some policy measures to strengthen economic ties between Egypt and Korea.
Egypt, as Korea did, adopted industrial policies for industrialization and industrial up-grading merely to be unsuccessful. Import substitution industrial policy in the 1950s and 1960s led to only stagnant productivity and large trade deficits. Later in the 1990s, Egypt shifted its policy toward export promotion, but the policy ended with protection for vested interests of old uncompetitive manufacturers. The result left the Egyptian economy heavily dependent on staple industries with low value-added such as textile and clothing, food, and oil and chemistry.
While Korea promoted new high-tech industries as strategic sectors to level up its position in the international value chain, Egypt adopted a strategy to support all of manufacturing sectors rather selected industries. Policies to attract foreign direct investment, to develop attractive industrial zones, and to produce technology and skilled labors were also disappointing, which was mainly attributable to corruption and red-tape.
Relying on Korea’s experiences with consideration of the current situations in and around the Egyptian economy, this study suggests some directions for the future industrial policy in Egypt. First, Egypt needs to selectively support strategic industries with large employment absorption capacity. Second, Egypt needs to upgrade its industrial structure in the mid or long run, although in the short run it may focus on investment in infrastructure and mega civil engineering projects for prompt job creation. Third, Egypt needs to refine incentive mechanism to attract FDI by enhancing labor market flexibility and streamlining administrative procedure. Last, Egypt needs to ensure political stability, corruption control, and government efficiency, which are all pre-conditions for successful implementation of an industrial policy.
When selecting strategic industries, Egypt should mainly consider three aspects of candidate industries: static and dynamic comparative advantage, global market growth, economy-wide spill-over effect. Through considering and measuring these three aspects, this study selects 9 industries as Egyptian strategic sectors: primary metal manufacturing, non-metal mineral manufacturing, food and beverage, chemicals, textile, metal manufacturing, electric equipment, rubber and plastics, furniture. Further, this study proposes more active cooperation between Egypt and Korea in 5 industries out of 9 above: primary metal manufacturing, food and beverage, chemicals, electric equipment, rubber and plastics.
This selection is based on match-making between the Egyptian strategic industries and Korea’s overseas investing industries. As cooperation tools at industry level, this study suggests Korean companies’ participation in the Egypt’s electric power generation and distribution, creation of industrial zones in Egypt exclusively for Korean companies, sharing of Korea’s experiences in industrial policy, enhancing the Egyptian capacity for R&D and vocational training, and supporting the establishment of a national chemical research institute in Egypt. 

 

 Recently there has been developed intense competition between great powers, which are willing to integrate Europe and Asia into a single economic bloc. The world powers are entering into the era of division and congregation depending on their interests with intense efforts made to dominate geopolitical superiority. This looks like the Eurasian plate is fluctuating.
The intense struggle for the hegemony in Eurasia between great powers is mainly being carried by international transport corridors passing through the continents. International transport corridor is not just network of routes to transport cargo and passengers, but a transversal line of international political economy, in which great powers are making efforts to dominate and extend their influence.
Eurasia has been the arena of competition on international transport corridors between great powers for a long time. Due to the fact that Eurasian Silk Road is the connection between transportation route, independent actions and approaches of each countries are taking places. Therefore, we need to focus on the fact that the Eurasian Silk Road is a complicated ‘space of game’, in which competitions and cooperation between countries are being made. Particularly, the giant stampede on Eurasia silk road between US, China, and Russia is giving Korea great significance, since Korea is the peninsula, located in the intersection of the Pacific and the Eurasian Continent and is sensitive to hegemonic changes of the ocean and the continent.
The purpose of this study is to create new opportunities for the new cooperation space, and simultaneously to seek the ways of peaceful reunifications of two Koreas through it, based on the analysis of the geopolitical and geo-economical changes building Eurasia Silk Road. Focusing on the intricate ‘New Great Game’ between the global super powers in Eurasia, especially triggered by ‘One belt-One Road’ plan of China, which is transforming from trans-regional great power into global super power, we are going to seek the way of building Eurasian Silk Road together.
Recently complex strategical project on Eurasia among China, Russia, and US has been activated already. However, Korea’s ‘Eurasia initiative’ is still remaining in the stage of planning. Even though the road map of ‘Eurasia Initiative’ was set up in the end of 2014, it has not detailed realization plan, so any progress is not being made except the ‘Rajiin-Khasan Project’.
For these reasons, discussions on key elements of China, Russia, and US’s strategies of building silk road, their geostrategic meanings, and mutual contract and possible collaboration of ‘Eurasia Initiative’ based on them have great significance. So, in other words, it depends on this, whether we can maintain new engine of economic growth, and dynamic momentum of peaceful reunification of Korea by the active efforts to connect Europe and Asia into ‘one continent’, or we could not overcome the limitation of a divided country and we will excluded from Eurasian cooperation community.
Thus, in order not to sink on the geopolitical confrontation relying on one ocean or continent power, it is important to seek new ways of ‘Eurasia Initiative’ as a middle power country. This is, in the world of ‘New Great Game’ between super powers, Korea needs to seek its own empowerment with the stake holders, such as Central Asia countries, ASEAN countries, India, and Mongolia. It is important to secure the right to speak, escaping geopolitical competitive construction, by taking complex neutral actions among China, Russia, and US. In addition, in the situation of antipode of US-centric international political economic order, ‘projection of power’ needs to be avulsed, since it can be seen as an attempt of china-centric power balance. In other words, community of profit and common destiny needs to induce new Eurasia economic cooperates and development model to overcome gap between countries and to coexist together, not to expend market dominated by inertia of the empire. Also, US’ ‘Pivot to Asia’ should sublate ways, which are aggravating complications, such as reinforcement of partnership by supremacy inhibiting China’s meteoric rise, but should be readjusted to be the partner of developing Asia’s dynamic growth potential. Dice towards the continent of Eurasia already has been thrown. Remnants are the strategic approach of ‘Eurasia Initiative’s evolution, escaping from the traditional geopolitical landscape of hegemony and the conflict.
The problem of how to derive construction of cooperation is important so far, with the situation of absence of economic cooperate mechanism and unoptimistic security situation in Northeast Asia. To solve this problem, it is preferable to do ‘geo-economical approach’ rather than ‘geopolitical approach’ to set the priority on economic co-operation. And first in importance is to establish a ‘Northeast Asia Economic Corridor’ by enhancing planning convergence of each Northeast Asian countries. This can be called optimum partnership program combining China’s 6 economic corridors construction promotion in accordance with their ‘One Belt-One Road’ strategy, Russia’s EEU, Far East development in accordance with the ‘New East Policy’, recently raised TEBR, Mongolia’s ‘Transit Mongolia’ and ‘Steppe Road Initiative’, and Korea’s ‘Eurasia Initiative’.
Northeast Asia Economic Corridor is not a new concept but is rather a concept and initiative, consolidating bilateral, multilateral cross-border co-operation, which has been developed focusing on building international transport corridors in the border areas between North Korea and china, and among North Korea, China, and Russia. Northeast Asia Economic Corridor is an effective preventive measures to avoid existing geopolitical confrontation and conflict between ocean and continent powers. It’s core content is realizing ‘2+4 cooperative structure’, cooperating in transport logistics, trade industry, agriculture and forestry marine products, and energy resources, focusing on building the China-Korea, China-Russia-Korea economic corridor in the eastern end of Eurasia Silk Road. It is building China-Korea economic corridor, based on the enhancement of adjusting China’s ‘Liaoning Costal Economic Belt Plan’, ‘Dandong Development Plan’, and North Korea’s ‘Huanggumpyung and Wehuado Development Plan’, along with South Korea’s ‘Pan-Yellow Sea Area Plan’ together. And also, it is building China-Russia-Korea economic corridor, based on the enhancement of adjusting China’s ‘Chang-ji-tu Plan’, Russia’s ‘Far East Development Strategy’, North Korea’s ‘Lason Development Plan’, and South Korea’s ‘Pan-East Sea Area Plan’.
This, of course, is a biased composition, concentrated on the continent, and it discloses the certain limits, since it excludes main stakeholders of Northeast Asia, such as US, Japan, etc. Especially, if Northeast Asia countries keep uniting with the alliance, focused on bilateral relations, It would not be easy to get initiative building China-Korea Economic Corridor, and also the Northeast Asia Economic Corridor. And considering South Korea-US-Japan’s triangular relation’s trend of US-centric networking alliances in confrontation with North Korea-China-russia’s triangular relation, South Korea, the nation confined to alliance structure, is in a hard position to get the initiative on building economic corridor. In particular, Japan is the kind of ‘cold spot’ in Northeast Asia economic cooperation, and in this regard, securing Japan in the structure of Northeast Asia Economic Corridor would be the key factor in determining success and failure of the building economic corridor. It is possible to carry Japan in the structure of multilateral cooperate structure, since Japan can have an adverse impact on strategic composition if Japan is excluded from the discussion of building Northeast Asia Economic Corridor. Furthermore, Japans’ participation can lead US’ participation, which is an offshore country but very influential in Northeast Asia. Through this, we can anticipate that promoting Northeast Asia Economic Corridor could have leverage effect leading peace and prosperity in Northeast Asia beyond the geopolitical confrontation.
In conclusion, building Northeast Asia Economic Corridor is the powerful plan to achieve South Korea’s ‘Trust-building Process on the Korean Peninsular’ and ‘Northeast Asia Peace and Cooperation Initiative’, and also it will provide momentum for the construction of inter-Korean economic community, along with the cooperation in transport logistics, communication, and electricity, based on the establishment of transport corridors between North and South Korea. The crucial factor of building Northeast Asia Economic Corridor would be North Korea’s decision to participate. So, we have to develop multilateral cooperation projects toward North Korea, related to building Northeast Asia Economic Corridor with the annulment of 5.24 ban measures for inducing North Korea’s participation.

 

 This study explores possible frontiers for industrial cooperation among Korea, Russia, Kazakhstan and Uzbekistan. While regarded as one of major foreign policy agenda, the ‘Eurasia Initiative’ lacks practical programs to achieve the desired goals of the Initiative, mostly due to the external constraints imposed by geo-politics surrounding the Korean peninsular. This motivation of this study is find common interests of these countries in order to provide a list of practical programs for cooperation. It focuses on the area of industrial cooperation between Korea and the major Eurasian countries. The Eurasian countries pursue diversification and upgrading of their industrial structure, specially promoting manufacturing sectors, though they are differ in how they implement their strategies. However, these countries are believed to be far behind other countries with respect to internationalization of industries, which seems to be one of the most important factors for competitiveness and economies of scale. As far as the Korean industry is concerned, international cooperation through fragmentation or production sharing should be considered as an effective strategy to promote SME. In this study, we look into the characteristics of industry structures and industrial policies and major Eurasian countries, then identify policy agenda and specific areas of industrial cooperation with individual countries.
It is well known that industry and trade structure of Eurasian countries are heavily dependent on natural rsources including oil, gas and various minerals. Eurasian countries have made efforts to change the industrial structure by promoting manufacturing sectors. Russia’s industrial policy include various industrial development plans such as ‘Plan for Improvement of Industrial competitiveness’. The Plan aims at promotion of various ‘strategic’ target industriess; aerospace, pharmaceutical and medical, shipbuilding, electronics and wireless electronic industrial development and agricultural development. Russia has activelly employed import substitution policies to support the development plan.
In the case of Kazakhstan, the government has also introduced industrial policy measures in order to strengthen its manufacturing basement. The main implementing institutions are ‘National Agency for Technological Development’,‘Investment Fund of Kazakhstan’and‘Development Bank of Kazakhstan’. Through these institutions, Kazakhstan government channel its development funds. Considering its policy focus, this study identified the major areas of cooperation including petrochemical, chemical, electricity, machine building, and medical supplies. Uzbekistan also has a primary sector driven industry such as agriculture, gold and energy. It has as highly closed economic system under strong state control.
Uzbekistan economy is vulnerable to fluctuations of international commodity prices, which plays negatively against FDI. Just like other Eurasian countries, Uzbekistan pursues diversification of its industry sturcte by promoting the manufacturing sector. Uzbekistan government announced many medium-run industry development programs for industrial competitiveness and sustainable development.
The main purpose of the programs is focused on development of machinery, oil and gas, petrochemical and chemical, textile, food processing industry and agriculture, localization, infrastructure development, energy saving etc. Recently Korea faces economic structural problems such as ‘growth without employment’ and ‘decline of growth potential’. In order to overcome these structural problems, the role of SMEs has been highlighted, in that SMEs cover more than 99% and 86% respectively in terms of the number of enterprises and the rate of employment. Nevertheless SMEs in Korea has special features, which are they are mostly based on domestic demand and linked to large enterprises or conglomerates in terms of supply and demand relation.
Korea’s conglomerates have rapidly entred into ‘global supply chain’, and global economic recession makes them face a slump in exports. These situation tells us SMEs needs to converse their domestic demand basis business to export basis. In this sense, the government policies of supporting SMEs in Korea have mainly focused on strengthening the exporting capabilities of SMEs. However, this research argues the government policy should be transformed and new strategies need to be set up. This research suggests industrial cooperation between Korea and Eurasian countries, Russia, Uzbekistan and Kazakhstan. For this, a new modality for cooperation like ‘TIDA’ needs to be further developed beyond the existing system like FTAs which focus on market opening. 

 

The rapid growth of the Indian economy has recently led to a rising interest among other countries regarding the sustainability and direction of India’s economic emergence. Its growth has provided an incentive for major economic powers such as the USA, Japan, China, EU etc. to enter the Indian market and expand their trade volume and investment with India.
Consequently, such increases in exports and investment from other countries have spurred changes in the industrial structure of India. Because of the recent increase in the market share of other countries in India, Korean firms in India now face higher competitive pressure in the Indian market. This necessitates better, diverse strategies in order to respond to the changes occurring in the Indian economy and the rising competition in the Indian markets.
Considering these issues, we begin the paper by analyzing the structural changes of the Indian economy and competition over India’s market. Then in the second chapter, we analyze the changes of industry, export and import, and competition in terms of market share. The results can be summarized as follows: First, the share of service compared to that of manufacturing has increased, implying that India’s economy has grown in parallel with service-oriented industries.
We also found that ‘center of gravity’ of manufacturing in India has shifted from labor-intensive industries to capital-intensive industries. Second, while exports have had a major role in India’s growth, the amount was smaller in relative terms to those of other developing countries. It implies that India’s economy depends more on the domestic market than trade. Third, India depends more on private consumption than fixed capital formation or other similar aspects, with respect to the determinants of aggregate demand.
Fourth, the major industries have experienced structural changes, as the share of textiles and its products have decreased and those of other manufacturing, especially electrical and optical equipment, have increased in the exports. As for imports, the ratio of other manufacturing, basic metals and fabricated metal, chemicals and related products, and electrical and optical equipment have increased. Fifth, the ratio of intermediate goods is higher than that of final goods in terms of the production process.
It means that entry strategies of Korean firms need to focus on intermediate goods. Sixth, even though the major trade partner for India is the USA, China’s share in the Indian market has undergone a significant increase. On the other hand, the import ratio of EU has decreased. Seventh, in measuring the effect of creation of value-added from major countries that export to India, USA is still the most influential. However, its ratio has been declining quickly, while there has been rapid growth on the part of China, meaning China has become the most important country for India in terms of trade.
In the 3rd chapter, the changes within the domestic market and promising industries in India are identified. First, we have identified chemicals and related products, basic metals and fabricated metals, electrical and optical equipment, machinery, and transport as the most promising industries in India in view of growth rate and size of the domestic market and imports. In the 4th chapter, the competition structure of major countries compared to Korea in the said five industries is analyzed.
The results show that Korea has lost its competitive edge vis-a-vis China and EU 15 in those industries, even though it still holds advantages over USA, Japan and ASEAN. In Chapter 5, we provide several political implications for the Korean government and companies in need of economic cooperation with India. First, the Indian economy depends more on its domestic market than exports, and has grown alongside industries that are heavily engaged in import and investment.
Thus, Korean firms need to focus more on the Indian domestic market, in addition to formulating proper entry strategies. Second, capital-intensive industries will claim a greater proportion of the Indian economy because the share of labor-intensive industries has been reduced and that of capital-intensive industries have recently experienced rapid growth. It implies Korean firms’ strategies for entry and economic cooperation strategies need to focus on capital-intensive industries.
Third, the high utilization ratio of most industries shows that the strategies are also necessary for the establishment of bases of production and entry into manufacturing industries. Fourth, a strategy is also needed for expansion of trade for import-oriented industries. Fifth, more strategies in response to China’s expansion in India’s market is imperative, given the aggressive entry of numerous Chinese products into the Indian market.
Sixth, the entry strategies at the industry level are needed, considering the increased competition with major countries in India’s market. Finally, Korea needs to enter the infrastructure sectors where the Indian government has recently invested heavily. 

 

 

 

  

 

 

  

 

 

 

 

 

 

 

 

While Africa’s economic performance since the 2000s has indeed been a highly notable success, it has not managed to solve the problem of poverty as such economic success has not translated into job and income creation. The African economy is still trapped within the confines of a monocultural economy, relying on an inefficient system built on a limited inventory of primary goods; it is not only failing to produce added value but also suffering from de-industrialization with the aim of settling into the normal process of economic turnabout still far on the horizon. The Millennium Development Goals (MDGs), an international initiative to eradicate poverty, are nearing their conclusion in 2015 after starting in 2000, and contrary to the initial expectations, the lack of tangible effects on Africa has given weight to the argument that big changes to the paradigm of aid giving are inevitable.
Nearly 15 million young people join the job market in Africa every year but the industries’ absolute lack of capacity to assimilate these people has resulted in youth unemployment levels reaching near-crisis levels. The private sector is arguably the most effective sector in terms of contribution to the eradication of poverty, and job creation through private sector is increasingly seen as the new paradigm of international development cooperation. Development cooperation has hitherto been focused on social developments like education or public health; recently, however, the emphasis has increasingly shifted to economic development through the development of the private sector, and from it, the goal to eradicate poverty. Stemming from this context, this study is about private sector development (PSD) in Africa, which is a sector of increasing importance and necessity as a target of development cooperation.
This study aims to propose viable options for an increase in the variety and effectiveness of development cooperation efforts being undertaken by Korea. The private sector and poverty can be said to be directly linked to each other in that the private sector can be said to be the most effective agent in the eradication of poverty, either through a microeconomic approach (jobs → increase in income → alleviation of poverty) or a macroeconomic approach (increase in tax revenue → increase in public investment such as education or infrastructure → increase in productivity or the capacity of the poor). Many nations in Africa have already established national visions of achieving middle-income group status by 2025, and to realize this, economic development must be attained through PSD. The private sector―being a practical leading agent of economic transformation, increase in productivity, and added value through the strengthening of private firms―can be said to be of paramount importance in bringing about economic development.
In this aspect, this study first reviewed the status and characteristics of the private sector in Africa and analyzed its details and limitations from various angles. Next, this study provided qualitative and quantitative analyses of the significance of support to the PSD of Africa with a focus on job creation and increase in income. Afterward, the status and characteristics of PSD support from various donor nations were analyzed, with implications for Korea as well. Finally, priorities for Korean cooperation with Africa were drawn from the exploration of needs in Africa and the capability of support from Korea. Co-operative options for individual items were presented as well. The summary of chapters, thus, would be as follows: Chapter 2 analyzes the status and characteristics of the private sector in Africa from multiple angles and defines the structural limitations that prevent further development of the private sector. Also, the role and importance of the private sector in bringing about inclusive growth,  such as job creation, and change in economic structure, is highlighted as well as its role in development cooperation. The private sector in Africa can be said to be the “engine” that drives the growth of the economy as 80% of gross production, 67% of gross investment, 75% of gross credit, and 90% of employment all stem from the private sector. However, the private sector in Africa is currently incapable of propelling the development of its countries’ national economy as it suffers from a number of problems including lack of productivity and competitiveness.
Most private firms in Africa are micro-enterprises, barely operating on a subsistent level within the informal sector. With this, most of the poor in Africa work in microenterprises, which are usually small-scale enterprises with less than ten employees, often made up of family members or relatives. Nevertheless, the private sector plays an important role in the national economies of African countries. While small-scale enterprises (including micro-enterprises) contribute only a small part to gross production, the sheer number of these enterprises means that they play the greatest part in job and income creation. Factors that deter the growth of the private sector in Africa range from financial exclusion to lack of infrastructure, deep-rooted corruption, excessive corporate regulation, and the emigration of a professional workforce. However, the prospect of PSD is not always hopeless. In fact, the rampant problems in Africa can be said to present an abundance of opportunities.
In Chapter 3, a cross-sectional analysis is conducted to assess private sector development (PSD) quantitatively and the effect of PSD on per capita GDP and unemployment rate focusing on inclusive growth in Africa. By considering inclusive growth with the distinctive features of Africa’s PSD such as the informal sector, PSD is defined more broadly than simply the enhancement of investment climate and business environment, and the purpose of Chapter 3 is to assess PSD and areas of focus for PSD in Africa; furthermore, inclusive growth is considered with small business ownership, financial system inclusion, and intermediation of business investments. The sources of data are The Inclusive Growth and Development Report 2015 and The Global Competitiveness Report 2014-2015 of the World Economic Forum along with “Informality and Development” by La Porta and Shleifer(2014). The analysis employs a linear structural equation model to account for the endogeneity of GDP per capita and unemployment rate, and an unstructured covariance matrix is assumed to reflect complicated relationships among selected variables. The results of analysis indicate that, in Africa, small business ownership is the only significant factor of inclusive growth that causes high income levels and low unemployment rates.
Provided that the model specification is correct, we can conclude that small business ownership should be considered a priority in Africa’s PSD. Higher income level is related to stronger technological readiness and larger market size, and lower employment rate has relationships with more higher education and training and more efficient labor markets. Yet the employed model has several limitations as follows: the number of observations is too small and standard deviations are fairly high; due to the limited inclusive growth indicators, panel data are not available, thus long-term analysis is not allowed; selected independent variables are indicators obtained from numerous sources, so correlations among variables are hard to determine; and a supposed unstructured covariance matrix, due to the high complexity of indicators, might cause weak validity of the inference of the chosen model. Variables including financial inclusion, informal sectors, infrastructure, and social security as focus areas of PSD in Africa, therefore, should be considered to achieve higher income level since the aforementioned variables show correlations with GDP per capita in diagnostic scatter plots.
Chapter 4 analyzes the approaches, policies and practices of private sector development for Africa in the cases of three bilateral donors―the United Kingdom, Germany, and the United States―in order to draw policy implications for the Government of Korea. In terms of intervention sectors and themes, the three donors had commonality in PSD work encompassing macro approaches for regulatory and policy reform, mid-level interventions for market development, and micro-level support to micro- and small-sized enterprises with a limited level of differences. All three donors had the whole-of-government PSD strategies stating guiding principles, purposes, and areas of intervention.
Highlighting the issue of fragmentation and lack of co-ordination among various aid agencies and ministries in PSD interventions of Korea, it was advised to first design a government-wide PSD strategy including a results framework and budget allocation plan. It was recommended to then incorporate this PSD strategy into the upcoming Mid-term ODA Policy for 2016-2020. Drawing upon the experience of Germany, diversifying PSD approaches was emphasized depending on the development status and fragility level of partner countries. As Korea’s African priority countries―Ghana, Ethiopia, Mozambique, Rwanda, Uganda, Tanzania and Senegal―consist of nations at different stages along the developmental path of private sector development, it was stressed that the design of PSD approaches and programs should be diversified for each country and reflected in Country Strategy Papers. It was also outlined that each of the three donors has PSD approaches focusing on their own strengths and experiences. For instance, the United Kingdom has an advanced financial industry focus with support for financial inclusiveness whereas Germany, with a strong Technical and Vocational Education System, emphasizes linking job creation and private sector development; and the United States, with competitive market mechanism, has a strong public and private partnership scheme.
In that context, Korea, drawing upon its own development experience, could consider a focus on appropriate technology, industrial zone development, and human resource development for PSD in Africa. Chapter 5, the core part of this study, discusses the priorities and options for cooperation between Korea and the private sector in Africa, based on the discussions and results of the previous passages. While Korea’s PSD support to African countries remains limited, the recent growth of its importance has led to recommendations for cooperation in four areas: entrepreneurial support, industrial complex development, professional or industrial workforce development support, and agricultural development. These areas are further elaborated as follows: First, entrepreneurial support is a viable possibility. Entrepreneurial boom remains active in Africa, perhaps to a greater degree than in any other place; however, the success rate of new businesses remains low because of various factors such as inadequate entrepreneurial support. From Korea’s point of view, providing entrepreneurial support to African countries may seem slightly far-fetched but the example of Rwanda shows that entrepreneurial support is a highly feasible option. African countries, having a drastically different context compared to Korea, necessitate above all an entrepreneurial support tailored to the local environment and entrepreneurs. Such entrepreneurial support can be said to be centered on “demand-centered technological development,” and as such, entrepreneurial support tailored to each of the target nations in Africa should take into consideration the ease of usage by locals and the feasibility of maintenance and continued development through the usage of appropriate technology.
The list of appropriate technology can be primarily drawn from a survey of the local populace, and a primary survey should be followed by an “appropriate technology database (D/B),” which then should be shared with relevant organizations. This database should involve the participation of not only the government aid agencies but also as much of the other actors as possible such as the local Korean population, corporations (local branches), nongovernmental organizations, social enterprises, and academia. This database can then be used as an important source of future entrepreneurial support and development cooperation at the grassroots level.
Second, the construction of industrial complexes should be a consideration. African countries’ popularity as an investment option for the light industry, such as textiles and clothing, has been on the rise, and coupled with the rise in interest of Korean firms, it is enough to warrant the need for light industrial complexes to be built through a public？private partnership (PPP). Considering the various circumstances of African countries and the lack of experience on the part of Korea, small- to medium-scale urban industrial complexes should be prioritized instead of large-scale industrial complexes. In this respect, funding is one of the most important issues. Funding should be based on a joint venture between Korean aid agencies (i.e., Korea International Cooperation Agency, known popularly as KOICA, Korea Eximbank, etc.) and enterprises (both public and private), with the possibility of financial cooperation with multilateral development banks (MDBs), such as the World Bank, the International Development Association (IDA), the International Finance Corporation (IFC), the Multi-lateral Investment Guarantee Agency (MIGA), or the African Development Bank (AfDB), or co-financing with bilateral development banks. The industrial complexes themselves can focus on the light industry, which has greater demand in the development process, i.e., with greater job creation and import substitution effects and the possibility of being integrated into the global supply chain. Some consideration of light industry areas can be textile, apparel, agro-processing, detergent, plastic (consumer and industrial), plywood and furniture, paper, and agricultural machinery and equipment. The demand for these products in Africa is constantly on the rise because of the increase in income and changes in living conditions; however, the lack of a manufacturing basis means that most of these products are imported. Technological transfers should be accompanied by psychological initiatives akin to the example of Saemaul Undong, or New Community Movement, motivating the workers to “work hard” and minimizing product defects through the “3-P Movement” (precision, probity, perfection), thereby raising the competitiveness and productivity of the firms through the “New Enterprise Movement.” Third, professional and industrial workforce development should be included in the support package. The primary education system in African countries has managed to achieve astounding levels of success through initiatives such as the MDGs, but tertiary and vocational education have not yet achieved nearly the same level of success. The level of higher education (especially tertiary education) remains low among the populace, and even the existing higher education institutions suffer qualitatively, causing alarming levels of job mismatch. Vocational education suffers from the same ailments. While various vocational programs are churning out a constant stream of trainees, some statistics indicate that the percentage of personnel with actual skills in demand by the corporations hover barely around 1% of the total. These observations indicate that Korean co-operative efforts should prioritize educational support to strengthen the basis and the qualitative capability of the workforce and ultimately resolve the job mismatches that plague the job market. Korean development cooperation in this regard has hitherto focused on hardware-based support, providing buildings to house vocational schools, or educational materials.
However, future endeavors should shift focus to demand-driven or market-oriented modes of cooperation, with the goal of reducing the discrepancy in the labor market. Any attempts to solve the discrepancy between the workforce supply and demand should focus on the synchronization of industrial demand (labor demand) and workforce supply (labor supply), and this attempt should be based on a precise survey of what technological skills are currently in demand by the industrial base. Such a survey can be followed by the determination of labor demand per individual industries (or sectors), which, in turn, can serve as basic data in formulating the blueprints of educational or vocational training policies. The magnitude of this task makes it unsuitable for a single aid organization to undertake it on its own and instead a partnership involving the government agency of that nation, or the AfDB, or aid organizations from developed nations could be considered. Other options for alleviating the job mismatch can include providing support to educational capabilities through partnerships between the universities, tailored education programs according to industrial development stages, and implementing national skill qualifications.
Fourth, support can be provided to realize a value chain in agriculture. African nations have abundant, farmable land, but the lack of infrastructure has resulted in the demand for agricultural goods surpassing the supply. Investments made on a massive scale are necessary to achieve a tangible increase in agricultural production, but neither poor farmers nor governments of the nations are able to provide such investments. Hence, agricultural development support could focus on developing agro-industrial complexes by establishing a locus of development in a certain area and focusing on the development in that area and thereby realizing a value chain in agriculture. The ultimate aim of an agro-industrial complex is to realize an economy of scale and value chain (increase in productivity → storage/processing → selling) and through it create added value, and such options could prove to be a suitable co-operative model considering the agricultural status of African countries and their needs. Such agro-industrial complexes should be focused on areas that enjoy superiority in market access, considering the situation of most African countries at present (especially the lack of infrastructure and, consequently, the isolation from the market). These projects should be preceded by an increase in productivity through seed developments and fertilizer provisions. Korea has a number of technologies regarding food crops, fruit and vegetables, and dairy farming, and has provided these technologies to developing nations as part of its development cooperation efforts. Agricultural storage areas and processing plants could also be an area of support.
The absolute lack of processing plants or storage sites often results in the harvested crops being thrown away in Africa, resulting in levels of postharvest loss (PHL) reaching up to 30%？50% of the total production. Next, support could also be provided in agricultural or rural development capabilities. To ensure sustainable development, psychological initiatives, such as diligence, self-help, cooperation, and a sense of ownership are equally important to material provisions or support. In order for comprehensive development projects, such as the agro-industrial complex, to successfully take root in the area, voluntary involvement of the local populace is of great importance in ensuring this goal. The experience of Saemaul Undong can prove to be instrumental in providing additional support through training rural leaders and organizing the populace. This study has narrowed down the prospective options for development cooperation into four areas, with the goal of providing a definite option of development cooperation in mind, but the size of the discussion has regrettably resulted in a surface-level theoretical exploration of policy options. However, this study can be said to be a pioneering work in PSD cooperation in Africa, and successive studies are anticipated to capitalize on the basis of this study to achieve greater scale and utility in the future. Conclusions drawn from this study can be applied to co-operative efforts between Korea and the designated target nations to achieve greater economic success and, in turn, impact poverty eradication.