This study aims to identify problems in special economy zones (hereafter SEZs) in India based on the concept of sustainable development and provide suggestions to decision makers in business organizations and public administrators. More specifically, unlike prior studies that approach the SEZs on the basis of economic and statistic indices, this study investigates various situations occurring in the SEZs based on the reactions of residents in the areas.
India started inviting foreign investment via trade liberalization. Particularly, India was the first country that recognized the necessity of free trade zones and implemented them. After the implementation of the zones, India tried to further strengthen their competencies by transforming free trade zones to SEZs. However, as India found such various problems in the SEZs as land deprivation and unequal wealth distribution, it has revised the ordinances related to SEZs several times. These problems are derived from companies committed to the SEZs and over-reliance on private investments. Furthermore, Indian policy makers have become questionable to the efficacy of SEZs since tax reductions and exemptions have found to reduce tax revenue of local governments.
Other than the issues pertaining to economics, the problems in SEZs are also related to political realities and conflicts among Indian political parties. For instance, India government based on INC (India National Congress) and BJP (Bharatiya Janata Party) have buttressed the SEZs in India while CPI (Communist Party of India), RSP (Revolutionary Socialist Party), and FB (Forward Block) criticized the SEZs for protection of laborers and farmers’ authorities. More recently, however, due to the aforementioned problems, many politicians in different parties have commonly raised the questions regarding the effectiveness of SEZs.
Recognizing complex natures associated with problems in SEZs, we investigated SEZs and their problems based on the concepts of sustainable development. Since WCED (World Commission on Environment and Development) initially announced the concept of sustainable development in 1987, researchers and practitioners have expanded the concept mainly into the three areas: economic, societal, and environmental sustainability. In this study, we introduced the three types of sustainability, and employed them as lenses to view the problems of SEZs in India. In addition, we sought to the relationships among the three types of sustainability.
We adopted qualitative research methods. The method focuses on the how people related to research topics perceive, behave, and experience. It can also help researchers in depth understand research topics. In this study, we employed an interpretative research method of qualitative research methods, which can help researchers identify Indians’ reactions to the SEZs based on Indians’ perspectives. Following the qualitative study guidelines, we had a seminar at Tata Institute of Social Science and interviewed several people in India. The results indicate that failures in environmental and economic sustainability are likely to influence social sustainability, which in turn leads Indian to be suspicious of the efficacy of SEZs. In addition, other factors such as a lack of political consensus and a threat to Indian sovereignty can also effect on the efficacy of SEZs. Based on these findings, this study provides several suggestions to Korean business practitioners who plan to start business in SEZs in India and Korean policy administrators who design SEZs in Korea.

Who is Indian? A realm of Indian’s spirit focused on the Yogaśāstra
What makes their identity? Is it a sentiment of religion? Or is it a social stratum which is representative of Caste?
We can hear the India of today through the media that they convey the economic growth by contrast with the poverty, or introduce the religious spiritual by contrast with the affluent material.
Now is the time for us to observe their culture by the balanced sense in their side.
In Indian society they follow the traditional principle on the other hand we can find out their devotion that they fulfil their dharma and rights both family and their community.
It is not possible to understand this point of view without a source of perception of Indian.
This book is for the companies which want to find their way to India and governments which want to cooperate with them. Because it offers a key to them to understand spirit of Indian.

This study analyzes the historical transformation of Indian industrial development strategies in terms of structural characteristics of Indian economic governance. Especially, government-business relations of Indian economic governance are examined in detail based on five standards to determine the relations: conclusiveness, information sharing, trust, transparency, bureaucratic discretion. Further, local governments' authorities, functions, and roles within the Indian economic governance, in addition to those of federal government and businesses, are also researched with regard to their interactions for economic policy-making. Besides, several factors to affect the governance such as industrial types and specific policy areas are considered so as to minimize possible biases. This study shows that Indian economic reform has been significantly affected by government-led economic development plans, though Indian government has accentuated neoliberal economic policies. In other words, two distinctive and conflicting policy ideas have been dominant simultaneously in deciding Indian economic development strategies. The most critical reason for this phenomenon is highly localized and multi-layered political system of India. The complicatedly tangled interest battles of the country over industrial policies have hindered consistent policy implementation as well as have caused serious (re)distributional problems. Moreover, strong socialistic tradition and remarkable political power of lower income groups have exacerbated situations in accelerating neoliberal schemes. As a result, Indian economic reforms have swung between governmental intervention and marketization, rather than have been totally based on neoliberal ideology.

This study examines the self-perceptions of communities in India. Focusing on a number of communities including the familial, village, merchant, religious and cyber communities, we investigate the traditional foundations of each community, and current changes. In "Traditional Perceptions of Community in India," the second chapter, we discuss the key concepts and the rise of communities in India. In the third chapter, we examine representative communities of India. Among the numerous communities, we discuss specific examples of the family, a merchant community, the panchayat and village communities, and religious communities. We focus on the present in the fourth chapter. Among the aforementioned communities, we examine the temple community, a community with which most Indians are associated in one way or another, and how the temple community has been transformed through a period of industrialization and urbanization. We also investigate a newly rising notion of community, i.e. the notion of cyber communities in this chapter. With the advance of information technology (IT), new cyber communities have been rising in India, and we examine the development in chapter 4. In the final chapter we summarize the significant points of our study.
The self-perceptions of Indians’ communities are based on the social concept of dharma, i.e. the varna dharma. Such communities can be found in various sizes, staring from the family, the smallest community, to the village and nation. According to its function, each community may be differentiated as a merchant guild or a religious community. The social position of each individual, represented by their caste, also forms an integral part of a social community when viewed together.
Among the representative communities of India we may count the family, the panchayat and village communities, merchant communities, and religious communities. The traditional Indian family is a joint family, in which several generations of brothers join each other to form a community within the same household. Members of the joint family share the responsibility for their ancestors as well as the familial wealth, which leads to strong ties among the members. The family also provides practical benefits for each individual member.
Among many merchant communities, this study focuses on the Marwaris of Rajasthan. The Marwaris are considered as one of the most successful merchant communities in India, based on strong family ties, assertive and practical marketing, thorough localization, reputation for honesty and industriousness based on family culture, and cooperation among Marwari communities. Marwaris provided a new role model for Indian merchant communities, especially within the modern economical system of India.
While the self-perception of village communities has been comparatively weak in India due to the strong self-perception of familial and caste communities, the traditional jajmani system and panchayat have been crucial in preserving village communities. The panchayat system was legalized according to the 73rd constitutional revision (1993), leading to the rise of the ‘Panchayat Raj,’ a symbol of the decentralization and mass participation found in Indian politics. Whether the panchayat raj will mature the Indian village into a democratic community will be a significant issue of contemporary Indian society.
The traditional religious communities of India can be divided into Hindu, Muslim, Sikh, Jain, and other minor religious communities. The self-perception of Hindu communities surfaced during the modern Hindu renaissance, which also lead to the rise of Hindu nationalism. The RSS (Rashtriya Swayamsevak Sangh: National Volunteer Organization) or the VHP (Vishva Hindu Parishad: World Hindu Council) are political groups representative of such Hindu nationalist viewpoints, and have been responsible for many communal upsets and events. With the support of such groups, the BJP (Bharatiya Janata Party), a right-wing Hindu nationalist party, was able to hold power from 1998 to 2004. Hindu nationalism has been charged with the rise of communalism in India, leading dissensions with other religious communities and threatening the secularism propagated in the Indian constitution at the time of Independence.
When India and Pakistan were divided according to religion, many Muslims remained in India and their number is now more than 150 million. However, many experience a loss of religious identity and community, as well as suffering from economic hardships and lack of political influence. With the rise of Hindu right-wing political pressure and unseen threats, both real and imagined, many Muslim communities are anxious to build a self-perception of their own religious community in spite of the lack of physical and material security.
The self-perception of the Sikh community was formed during the religious persecutions of the Mughal Empire. In addition, the controversy between Sikhs and Hindus on the notion of shuddhi (purification) resulted in a rise of the Sikh self-perception. In the 1980s the Sikh community sought an independent state through the Khalistan movement. Nowadays they seem to be more focused on religious movements rather than political positions.
The Jain community has maintained its social status through its economic role in Indian society. Due to their belief in ahiṃsa, Jains have long been involved in commerce and finances, and thus have formed their own self-perceptions of community through the lineages of teachers, one’s hometown or caste, areas or categories of business and the credit relationship formed by such businesses, and pilgrimage. Especially from the 19th century onwards, we can witness the rise of religious identity as a Jain, differentiated from Hindus.
These communities have been undergoing many changes during the modern and contemporary period. Among many communities, we examine the temple communities and cyber communities in this study. For most Indians, the temple community serves as a critical component of their lives, not only in the religious sense but also within the social and political arena. Each temple community possesses different characteristics due to the difference in the role of the constituents and the relationship among the constituents; the most significant constituents are the clergy, the lay believers, and the management committee. The self-perception of a temple community is expressed through participation in religious rites as well as charitable acts, education, social and political activities. In general, the management, which is usually run by a committee, is most active in building the self-perception of a temple community.
Currently, the temple communities of India, especially those of urban areas, display many changes from the traditional temple community in their outward appearances, management, and economic status. One of the most significant changes is found in the role of the clergy, in particular the role of the Hindu priest of the Hindu temple community. While the priest occupied a considerable role in the formation of a religious community as well as the management of a temple, this role has now been usurped by the management committee in the contemporary temple community. As a result, the judiciary role, based on the religious authority of the priest found in traditional and/or rural communities, has now become miniscule. As an employee of the temple, the priest does not play as significant a role as the members of the management committee, who now organize charitable activities, volunteering, cultural and sometimes political events.
With the computerization enabled by the rapid increase of users as well as the spread of various IT-based technologies, numerous Indian communities have been formed in cyberspace. Accordingly, Indians are now shifting to accommodate cyber communities in addition to their traditional offline communities. Currently India is one of the youngest nations in the world, with a large number of young adults and youths leading the cyberspace communities.
Social media in India has been affecting not only the media industry but also many aspects of daily life. The flow from one’s homepage to social media such as personal blogs, Facebook, and Twitter is now commonly found in India, with many people receiving information from the government, the industry, as well as general users.
The core opinion leaders of India are males, mostly in their mid- to late-twenties. Many are college students or workers in the IT or financial industry. The social network services provided by such opinion leaders are found more effective in the work of NGOs(non-governmental organizations), compared to that of the industry. This indicates a trend in the social service network, which favors the pursuit of public benefit rather than business profits. In many cases social network services are provided through mobile phones rather than personal computers.
According to this study, we suggest the following strategies in promoting knowledge and insight of India as well as advancing Korean-Indian relationship.
First, as a study of communities and the self-perception of communities in India, we anticipate this study will provide critical information on Indian societies and their ways of thinking, while aiding government agencies and companies entering and branching out in India.
Second, we propose financial or administrative support for Indians in Korea who are seeking to build a center for the immigrant and migrant worker community. This may include support for building physical temples in Korea, or providing cyberspace in which actual Indian temple communities may be broadcast or cyber worship communities may be operated.
Third, with the upsurge in the use of social network services such as Twitter or Facebook, many Indian businesses have started to use these networks to promote new products or service. Korean businesses aiming to find a market in India should also be aware of this trend, and provide their own channels within the Indian social media as soon as possible. This will be crucial to the younger consumers of India, who will lead the trends in providing information as well as consumption.

This is to explore the cultural and economic implications on the Eastern India composed of two provinces, West Bengal and Orissa. West Bengal and Orissa are geographically in eastern regions of India and are the most densely populated and agriculture-dependent state in India. These states remains one of the poor states in India. However, they are in different stage and process of economic development because of their different cultural and social background. It gives some policy implications for the firms to enter India market.
The basis of the traditional culture of Eastern India may be the Jagannath belief and Durga puja. And modern culture is heavily influenced by the modernism brought by East India Company in the 19th century onward. West Bengal and Orissa marks the lowest on the human development indices such as medical service, health care, education, housing etc. Though the communists has been taking the power in West Bengal government, the government servants show us serious corruption and the violence of the upper classes is very widely prevalent in all over the province. What is to be noted on Orissa is that they have very good number of Scheduled Tribes in its north-western region where deep forest with various natural sources are lying. And the development policy of the government and entrepreneurships lead the serious resistance and struggle of the indigenous people dwelling in the region. The power and influence of Naxalite struggle here in Orissa is most noteworthy in all over India. In addition to this, the refugees from the 1947 Partition and the Bangladesh Liberation War of 1971 have affected the backward economic situation of these two provinces. Though the governments of the provinces have been trying to prompt various investments, the poor condition of infrastructure like road, light, port is blocking the progress.
West Bengal and Orissa are most poor states compared to others. Agriculture is the leading occupation in West Bengal and Orissa. However, industry is the lowest contributor to the gross domestic product of the states. Except the mineral and steel industries, only traditional sectors such as cottons and leathers are playing important economic role in these states. Manufacturing are still backward sectors in these two states. Minerals account for 50% of Orissa's export and the traditional items such as engineering products, leathers, textiles, jeweller are major export products in West Bengal.
Two states are by far the least industrialized and underdeveloped states because of their unique social and cultural backgrounds. It is analyzed that the reasons that West Bengal remains one of the poor states in India are political instability and bad governance, political and high corruption with Bengal the Communist Party of India (Marxist) led Left Front rule for three decades.
Orissa is India's poorest state and highly disparities which have long historical and deep institutional roots. Agriculture-deep dependence and its low productivity, lack of leadership and fails of industrial policies have been unable to break the disparities. Land reform makes another obstacles for the firm that needs vast land to establish the factories. Massive resistance from the people of the state who mainly depend on agriculture for livelihood also is a major factor against attracting investment in Orissa.
There are two case to explore the cultural and economic implication on the eastern India, the Tata Nano and POSCO.
In 2006, Tata Motors started constructing a factory to manufacture their $2,500 car, the Tata Nano at Singur, West Bengal. Tata chose the Singur site because of its proximity to Kolkata and highway connections. The West Bengal government obliged, making use of a colonial land expropriation law and state pepression to force 13,000 Singur peasants out of 1,000 acres of prime agricultural land. The project faced massive opposition from displaced farmers. They were given a political support by West Bengal's opposition leader Mamta Banerjee of Trinamul Congress Party. After repeated violences, Tata finally decided to move out of Singur in 2008. On 7 October 2008, Tata announced that they would be setting up the Tata Nano plant in Sanand, Gujarat.
POSCO signed a Memorandum of Understanding (MOU) with the Government of Orissa in June 2005, to set up a 12 MTPA green field steel plant near Paradip, Jagatsinghpur District, Orissa, with an estimated investment of USD 12 billion. The company will build a 4 million-tons per annum capacity steel plant in Orissa, during the first phase of its project , and expand the final production volume to 12 million tons per annum. Production from the plant was scheduled to begin by the end of 2011. But the plan, one of India's largest foreign investment projects, has already faced more than three years of delays because of controversy over land acquisition and mining rights. POSCO has faced protests from local residents who stand to be affected by the plant as well as the environment ministry probe. In August, 2010, the environment ministry ordered a halt to all work on the project, including land acquisition, while the panel looked at whether the forest rights act, which seeks to protect forest land and settlers, had been violated.
Policy implications for potential investors from inside or outside India are about the process of land acquisitions. Land for investment project is advised not to include the privately owned or to minimize. If it included private land, direct negotiations between the industry and the landowners would be advisable but it needs a strong political will to end all protocol and red tape. Even in the case of projects that are genuinely for public welfare, there is a considerable difference between market value of the property and the value that the land acquisition officer pays to the landowners. The rehabilitation and relocation of the landowners affected by acquisition should be looked into carefully.
The results gives some policy implications that the level and growth of economic development in India would be different in state by state. It also shows that land aquisition is the most difficult factor for the firm to invest in Eastern India and the resistance has a different background. It indicates that the cultural and economic backgrounds have to be investigated before the firm invests in India such as West Bengal and Orissa. Finally, the results show that the two states still have a potential as an emerging market even though there are structural difficulties.

This study aims at suggesting basic directions and executive strategies for maximizing implementation effects of transport-related Official Development Assistance (ODA) projects in ASEAN nations. To this end, this study reviewed ODA’s policies and trends over the world, and identified critical implications for effective and efficient implementations of ODA projects, analyzed level of transport infrastructure in ASEAN nations. The basic directions for the policies are to maximize the effects of transport-related ODA projects through a comprehensive and clear approach, to propagate the Korean-style working process in structuring transportation infrastructure, and to implement a transportation infrastructure which is able to meet global trends. In order to implement effective transportation infrastructure ODA projects sponsored by the Korean government, the study suggests the following strategies. First, it is necessary to establish a master plan with a strong ownership. Second, projects should be implemented according to each countries’ needs. Third, pro-poor growth should be included in transport-related ODA projects. Fourth, more stresses should be given to soft-oriented transport projects. Fifth, the effects of ODA should be enlarged through developing low-cost and high-effective ODA projects. Sixth, Public-Private Partnership(PPP) should be strengthened so that private parties can participate in international projects and more funding can be assured. Seventh, more efforts should be given to developing sustainable transport infrastructure. Finally, continuous aids should be given to cross-border transport.

Vietnam is currently facing various environmental problems during rapid industrialization and economic development. Proper knowledge and active involvement of public officers who plan and implement environmental policy are necessary in order to solve environmental problems. However, the Vietnamese government is not paying much attention on training of public officers and is also experiencing difficulties in dealing with those problems due to the lack of environmental management capacity.
This study aims to build basis of environmental training system for public officer of the Vietnam by developing and implementing pilot environmental education program. Using I-AID²E² Model as a development tool, preliminary survey was conducted and pilot training course was developed based on the result of survey. Specialist from both country cooperated through out the process of developing training program. Provincial officers from ten provinces in the northern Vietnam were invited for the pilot training course on “air pollution and acid deposition monitoring” at Vietnam Institute of Metrology, Hydrology and Environment in Hanoi from 27th of September to 28th, 2010.
The training course was successfully conducted and delivered. The provincial officers who attended the course were generally satisfied with the training course and showed strong willingness to attend training next time if there is chance. The demand for environmental training is found to be high from the survey result.
In conclusions, there are strong demands for environmental training for public officers in Vietnam. Financial support and introduction of policy measure for mandatory training are needed to set up regular and periodic environmental training system to meet their demand. Establishment of regular environmental training courses including basic course and expert course and detailed training courses depending upon different level of public officers are also necessary for provision of good quality training in order to settle environmental problems arising.
For cooperation between Korea and Vietnam in the sector of environmental training of public officers, exchange of environmental personals and continuous involvement in education are required. The support on the operation of environmental training program in the Vietnam by Korean Environmental Human Resource Development (EHRD) Institute and Korean environmental experts are also necessary.

The auto industry in Southeast Asia began with CKD assembly for Japanese automakers in the 1950’s. With the formation of ASEAN in 1967, division of labor in parts manufacture was promoted, then proceeding to production of finished cars and development of automobile manufacture as an export industry after the Asian Foreign Exchange Crisis.
Though the market for automobiles in Southeast Asia remains relatively small, with a volume of just under two million in 2009; it should be noted that Southeast Asian economies continue to grow and the presence of countries like Indonesia, the fourth most populous country in the world, gives the region a huge population base. In addition, two (Thailand, Indonesia) out of three (Thailand, Indonesia, Malaysia) largest markets in the region are looking forward to motorization in the near future, thus pointing to enormous future potential for Southeast Asia’s automobile market. Southeast Asia is widely expected to rise as the next major market for automobiles, after the BRICs countries.
In addition, a major transformation in pending in terms of the region’s industrial policy, as major countries in Southeast Asia are moving away from the pre-Crisis focus on intra-regional division of labor. The auto industry was oriented towards exports in accordance with a policy shift from focus on parts to finished cars. This comes in the wake of efforts to nurture and secure the capacity to develop their own automobiles in the 2000s. These efforts are being spearheaded by Thailand, which recently succeeded in turning itself into a production and export base for 1-ton trucks, with Indonesia following on its heels and Malaysia actively seeking partners for technical cooperation. As for the Philippines and Vietnam, where the pace of industrial development has been slow, they are attempting to secure capacity for domestic production and seeking intra-regional cooperation in auto parts manufacture.
The supply structure for the automobile market in Southeast Asia has been presently dominated by Japanese producers. Japanese companies have attained a monopoly over the said market ever since Japanese companies took part in assembly production and consequently became the main driving force in division of labor in parts manufacture, thereby exerting enormous influence over the industry in Southeast Asia. Thailand owes its recent success in becoming a production and export base in one-ton trucks, in large part, to strategies of Japanese automakers. Major auto companies like Toyota and Nissan are nurturing Thailand and Indonesia as bases for production and export of small cars, while simultaneously pursuing a complementary strategy within the region between different production models. As a result, Japanese firms will retain their paramount position in Southeast Asia’s auto industry for the foreseeable future.
As Southeast Asia will likely emerge as the next major automobile market after the BRICs countries, active consideration needs to given for Korea’s entry into that market. But given the significant price competitiveness of products produced within the region, local production has the advantage over exports in competition.
But since much variation exists among the countries in terms of market potential, strengths/weaknesses in industrial development, opportunities, and risks; a comprehensive assessment of the above factors must precede any serious attempt at selecting a base for local production. Initial comparison and analysis of strengths and weaknesses by country reveals Thailand to be the best choice as a production base for finished cars in the short to middle term, while Indonesia is the best option for the long term. Though underdeveloped in terms of the auto industry and markets, Philippines and Vietnam could receive consideration as bases for auto parts manufacture.
As Korean automakers are currently concentrating investment in the US and BRICs countries (China, India, Brazil, etc), substantial investment into Southeast Asia will have to wait until the latter part of 2010’s. This means that for the short and middle term, it would be best to focus on bolstering production systems in existing facilities through gradual expansion of currently small production bases maintained by Koraen automakers in Southeast Asia, as well as assignment of models based on complementarity between countries. It is advised that a strategic choice be made by assigning Indonesia as a key production base for the long term, and begin preparatory measures such as development of low-cost models and establishment of parts supply network.

 Southeast Asia, in general, refers to the area represented by the 10 ASEAN member countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. ASEAN has developed close economic relations with Korea. As of 2009, it is Korea's 4th largest trading partner after China, the EU and the Middle East  with the trade volume of US$75 billion and the 3rd largest overseas direct investment destination after China and the US with the cumulative total of US$17 billion.
The most prominent feature of financial sectors commonly found in Southeast Asian countries is that they are underdeveloped relative to real economic sectors. Also, banks are dominant financial intermediaries with little competition from shallow domestic capital markets.
The Asian financial crisis of 1997 brought about economic recession in Thailand, and in the course of recovering from the crisis the country had to undergo severe financial restructuring process. The Thai government's efforts to move forward to strengthen and diversify financial markets continued with the Financial Sector Master Plan II pronounced in 2009.
When the Asian financial crisis hit Malaysia, it refused to resort to IMF bailout but pushed through fiscal tightening policies of its own. However, as it failed to alleviate the situation, the Malaysian government veered to an expansionary policy. As it attributed the main cause of the crisis not to its own macroeconomic fundamentals but to international hedge funds' attack, it imposed strict capital controls and introduced a dollar peg system. In addition, the government tried to induce financial restructuring led by private sector and reinforced the financial regulatory and supervisory bodies to lessen the financial turmoil. With the measures in place, the financial sector's asset quality and profitability remarkably improved. Malaysia's financial sector is now regarded as the main growth engine growing at an annual average rate of 7.5% since 2000. Competition with foreign institutions driven by the government's strong financial liberalization policy is expected to enhance efficiency and growth of the financial sector.
When Indonesia spiraled into a financial crisis in 1997 triggered by the plunge of rupiah and insolvency in the financial sector, it signed a US$10 billion stand-by agreement with IMF which requested the government of Indonesia to carry out an economic reform program. To comply with it, the Indonesian government undertook financial reform measures such as banking sector restructuring. The banking sector reform policies since the 2000's include higher minimum capital requirements and the single presence policy. Also, to protect depositors from banks' insolvency, the government built a financial safety net, giving the central bank the role as the lender of last resort providing liquidity in case of emergencies and establishing the Indonesia Deposit Insurance Corporation (IDIC) and the Financial System Stability Committee. Additionally, the government adopted the Capital Market Blueprint from 2000 and Capital Market Master Plan from 2005.

This report aims to provide strategic policy suggestions for stronger Korea-ASEAN cooperation in IT by looking into the evolution and achievements of Korea and Southeast Asia’s IT industries since the Asia-wide financial crisis in the late 1990s.
As a politically and strategically crucial region, Southeast Asia is Korea’s one of the most important economic partners that represents significant amount of trade exchanges. It is also a major investment destination for the Korean private sector which increasingly seeks business opportunities in the region. While Southeast Asia looks to enhance economic cooperation with Korea, which has a high degree of industrial complementarity to the region, Korea has also recognized that a stronger engagement is necessary to better use each other’s competitive edge, and develop new markets and resources. In particular, ASEAN is benchmarking Korea for economic growth, and has shown great interest in the Korean IT industry’s role and accomplishments during the Asian financial crisis and continuously extended cooperation with Korea.
Despite frequent natural disasters, weak domestic fundamentals, social instability and global crises like the 1997 financial woes, the Southeast Asian economy has continued steady growth since the 1980s with particular focus on IT development. The region's IT sector has maintained sturdy growth defying the challenges of the past decade and emerged as a major driver of the Southeast Asian economy. The region has shown marked economic progress, but the growth has been limited to the mobile communications sector. Korean telcos that noted the region's potential and set up operations there have been barely successful due to the uncertainty coming from the outdated regulations and policies, and immature market conditions. Still, the region presents significant business opportunities, especially the countries with strong commitment to IT.
Recognizing the saturated domestic market and the need to export home-grown technology-based services, many Korean IT companies are turning to foreign markets, and Southeast Asian countries are on the top of their list. ASEAN countries have a very high level of awareness on the history of Korea's IT development compared to other regions or countries, and have expressed their need for assistance including policy consultation to benchmark Korea's experiences and policies. Korea will be a suitable model for developing nations since it achieved remarkable economic advancement mostly on IT development over a short period of time.
The Korean government―including the Korea Communications Commission―has shared Korea's policy experience in IT through cooperative projects with Southeast Asian countries. Although the projects have been helpful in broadening the policy platform, they have failed to realize wide adoption of Korean technology or service in the region. The region’s protective regulations and practices are of course responsible, but the major constraint is the lack of competitiveness of Korean companies, which are losing to the multinational enterprises with high brand perception and value, Chinese players with strong cost competitiveness, and local firms in Southeast Asia.
Nevertheless, the region is still full of opportunities since ASEAN and the member states have established and implemented policies and initiatives to develop broadband network, which is considered essential for future growth. Korea’s WiBro(WiMax) and DMB technologies, which have been adopted as global standards, are likely to be well-received in the region whose fixed networks remain unsophisticated. In addition, the now effective Korea-ASEAN FTA will offer greater business/investment opportunities to Korean firms.
A support plan and viable efforts from the government based on thorough SWOT analysis will substantially raise the chances for Korean IT companies to succeed in Southeast Asia and other foreign markets. With ASEAN taking firm root as a regional community, Southeast Asia is also seeking to expand the association into a pan-East Asian community. Since Southeast Asia has become a key player of the Asian economy and also a gateway for Korean IT companies' overseas expansion, the Korean government should further strengthen cooperation with the region. Suitable strategies would be: establishing a collaboration system that meets the need from ASEAN, and combining or aligning different cooperative projects; expanding ODA, especially for leading member states; generating new content for cooperation; and raising effectiveness of the cooperation system.