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  • 코로나19 이후 글로벌 가치사슬의 구조 변화와 정책 대응
    Structural Changes in the Global Value Chain and Policy Responses after COVID-19

       The coronavirus pandemic (COVID-19), which broke out in December 2019, is changing the lives of people and economies around the world. Unlike typical economic shocks, COVID-19 spreads globally through human-to-human c..

    Hyoungmin Han et al. Date 2021.12.30

    Trade structure, Trade policy
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       The coronavirus pandemic (COVID-19), which broke out in December 2019, is changing the lives of people and economies around the world. Unlike typical economic shocks, COVID-19 spreads globally through human-to-human contact and because of its diversity of biological variation, the impact of the pandemic is being prolonged. The spread of COVID-19 is acting as a new shock factor upon global value chains (GVCs) in terms of crisis management, as it has increased the biological risk caused by infectious diseases and limited the movement of human and physical resources. More specifically, in early 2020, because of the spread of COVID-19 in China, so called the world’s factory, production shutdowns were unavoidable and this disrupted production in a number of associated countries. Then in 2021, as unexpected digital demand spiked due to the continuation of COVID-19, the supply of semiconductors has encountered difficulties keeping up with the demand and production has been delayed in many countries. Considering these cases, the impact of COVID-19 on GVCs is substantial and proper policy responses are required.
       Meanwhile, it is highly difficult to directly identify the impact of COVID-19 on GVC structures. This is due to the significant difficulties involved when examining the impact of COVID-19 on GVCs, as it is continuously changing and intertwining with various factors such as policy uncertainty before COVID-19, changes in production and demand and digitalization of production. Also, the impact of COVID-19 is likely to be combined with pre-existing factors which have induced changes in GVC structure. Therefore, in this study, we comprehensively look at the direction of the ongoing GVC changes after COVID-19 based on the literature and quantitative data, and derive government support policies and tasks. The summary of findings is as follows.
       First, we attempt to identify the factors influencing GVC structure changes before COVID-19. The factors are protectionism, increased policy uncertainty, changes in production environment and demands in Asia, introduction of new technologies, digitization and automation of production, disasters and health risks, etc, all of which increase or decrease trade costs. Based on international input-output tables, when looking at the structure of participation in production, the linkage structure of final goods and intermediate goods between countries and the length of production, our analysis is that these complex factors have generated structural changes such as strengthening GVCs in Asia, localization of production network and simplification of production length, which means that proximity to markets has increased.
       Second, we explore the changes in GVCs after COVID-19. Decision-making that determines a company’s GVC structure is based on theoretical factors including transaction costs, property rights, relative price differences in production factors, overseas transfer costs of work, complementarity between production technologies and investment climate as production base (e.g. proximity to major markets, factors of production, infrastructure). Therefore, if these factors have not undergone significant changes due to the development of information and communication technology, the structural changes in GVCs due to COVID-19 are expected to be limited. However, if COVID-19 increases the possibility of accelerating the digital transformation or production automation, changes in GVCs after COVID-19 should be considered to be largely driven by changes in production technology.
       Third, COVID-19 has a negative impact on both sides of supply and demand of GVCs. When considering the proportion of overseas demand and supply of production in major countries, in the case of an external demand shock caused by COVID-19, the decrease in US demand is expected to affect Asia, and the decrease in China’s demand is expected to affect developing countries. In the area of external supply shocks, the supply shock is predicted to be particularly substantial in developing countries. When checking the trend of trade and investment after COVID-19, in trade, we have found the role of Asia’s GVC has increased and regional trade functions in Asia and Europe have become stronger. In investment, we found regional production bases in regional central countries (the United States, China, and France) expanded, and an overall trend of localization of production networks is observed. This means that the GVC structure since COVID-19 has maintained or strengthened changes in the role of Asia as a production base and reduced production length (i.e., increased production proximity to consumer markets). Also, although green field investment in most industries has been on the decline since COVID-19, investment in the telecommunications industry has increased, capturing responses to digitalization in major countries.
       Fourth, this study conducted an empirical analysis based on the gravity model to analyze the actual impact of various external shocks on GVC trade (intermediate goods trade). As a result, it is confirmed that external shocks such as natural disasters and health risks are negative factors on GVC trade, especially on the production of commodities (forward-linked) such as raw materials. In addition, the impact of external shocks on GVC trade was smaller in countries with higher levels of trade openness and digitalization. These results suggest that Korea, which has a high proportion of intermediate goods exports, is highly likely to be sensitive to external shocks, and that it is necessary to maintain a high degree of trade openness and digital access with major production-linked countries to mitigate the extent of such shocks.
       Fifth, in order to examine the microscopic changes before and after COVID-19, we analyzed the global production network changes of global leading companies. Analyzing changes in the production and sales structure of representative companies in countries leading certain industries can be a crucial clue to identify changes in GVCs after COVID-19, but due to concerns over leakage of sales know-how, information on production and sales networks is restricted from collection through surveys or expert interviews. As an alternative, the analysis was conducted using Bloomberg Supply Chain Analysis (SPLC) containing relationship values between the analyzed companies and their suppliers and customers. The results of our case analysis of global leading companies showed similar flows to previously identified changes in GVCs. Taiwan’s share increased in all supply chains of leading semiconductor companies, while Japan and France’s share increased in global automakers’ supply chains. Japanese companies’ share increased in the supply chain of the world’s top three clothing companies, while French companies’ share in Selling, General & Administrative expenses (SG&A) increased. In other words, the role of production in East Asia and some European countries has increased. In addition, there are clear indications that digitalization and automation of production has progressed under COVID-19, such as the introduction of robots or expansion of investment in digital technology in the semiconductor, automobile and fast fashion industries.
       Last, in this paper, we conducted a survey of 229 overseas Korean companies in the industries where Korean companies have entered global markets most actively — electronics, transportation equipment, textile, clothing, and shoe manufacturing — to examine changes in GVC structure and policy demands in these industries before and after COVID-19. According to the results of the survey, compared from before and after COVID-19, the proportion of raw materials and intermediate goods supplied (i.e. procurement/importation) from East Asian sources as well as the proportion of raw materials and intermediate goods sourced from the local countries the companies had increased. When it comes to sales networks, we found an increase in the proportion of China, a reduction in the proportion of Korea, ASEAN and EU, and an increase in the proportion of sales to all local markets except for the EU.
       Meanwhile, the results indicate that most of the Korean companies surveyed had suffered loss during COVID-19, of which approximately one-third have recovered from the damage sustained. In particular, the fundamental causes of losses caused by the COVID-19 pandemic can be analyzed in various aspects of demand and supply, such as “deterioration or restriction of working environment due to the spread of infection or lockdown,” “reservation, reduction, cancellation of orders from domestic and foreign supply lines/customers,” “delay or disconnection of imports of raw materials, parts and products,” and “deterioration of the logistics environment.” In order to overcome COVID-19, overseas Korean companies first responded by mobilizing their internal capabilities by for instance “reducing local employees or reducing labor costs”, “adjusting the utilization rate”, or “adjusting inventory.” Relocation of production bases, which were directly triggered by COVID-19, accounted for 6.6% (15 firms) of all surveyed companies, 6.6% (15 firms) of changes in procurement routes, and 7.0% (16 firms) of alterations on sales route. As above, very few companies had changed their production networks and most of these were surveyed as companies operating in Vietnam. In addition, Korean companies recognize the digitalization of production and the spread of the green economy as risk factors for GVCs and in the case of SMEs, they seem to lack sufficient preparation for these transitions. According to the results of this survey, before and after COVID-19, overseas Korean companies are generally strengthening their dependence on production in China, ASEAN, and South Asia, and simplifying production paths centered on local markets in GVCs. They evaluated COVID-19 as a short-term factor, so they are primarily responding to it by utilizing internal resources of their companies. And there have not been much changes in the GVC structure of Korean companies with COVID-19 as a direct factor.
       In summary, our analysis shows that the changes in the GVC structure after COVID-19 are relatively more influenced by existing factors, such as increased demand in Asia, changes in the production environment, and policy uncertainty such as the US-China trade dispute, rather than the direct factors of COVID-19. However, as examined in the empirical analysis, health disasters are a major negative factor in trade of intermediate goods, and overseas Korean companies have suffered from production reduction and sluggishness in terms of supply, and a decrease in sales/exports and demand due to COVID-19. Therefore, in this study, we propose two policy directions: responding to short-term factors, such as damages and supply chain disruption due to COVID-19, and responding to mid- to long-term factors, such as the rise of production networks in Asia, digitalization and automation of production, and the rise of the green economy. Short-term response means short-term policy support to alleviate disruption of GVCs caused by the direct impact of COVID-19. More specifically, we propose strengthening international cooperation in labor mobility and trade liberalization and providing customized support by country and industry to respond to shocks in supply chains. In addition, in consideration of the mid- to long-term factors that currently affect changes in GVCs, we suggest strengthening production linkage centered on ASEAN and India, reinforcing the establishment of the regional value chain (RVC) of Korea through support for local productivity improvement and participation in mega FTAs, establishing a global vaccine hub for rapid health risk response, improving digital connectivity and increasing robustness in GVCs based on the Digital New Deal, and providing support for low-carbon production in preparation for a green economy based on the Green New Deal.
    정책연구브리핑
  • 외국인력 유입의 사회경제적 영향: 유럽 내 아프리카 이민자 사례 및코로나19 대응을..
    The Socioeconomic Impact of Immigration: Cases of the African Immigrants in Europe andthe Response to Covid-19 Pandemic

      This study examines the direct and indirect effects of the influx of foreign workers on the economic, societal and policy response through a case study of African immigrants in Europe and an empirical analysis of the COVID-..

    Youngook Jang et al. Date 2021.12.30

    Economic cooperation, Labor market
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      This study examines the direct and indirect effects of the influx of foreign workers on the economic, societal and policy response through a case study of African immigrants in Europe and an empirical analysis of the COVID-19 travel restriction policy. A review of European immigration cases is expected to provide policy implications for Korea, where the share of foreign workers is gradually increasing. In addition, this study attempts to understand the impact of the dependence on immigrant workers on domestic policy decisions in the time of national emergency like epidemics. 
       Specifically, Chapter 2 focuses on the current status of foreign workers in the EU. The foreign workers of the EU are concentrated in member countries with large economies, such as Germany. Currently, the number of non-EU immigrant workers exceeds that of intra-EU immigrant workers, but the latter have been increasing in recent years. The sectoral distribution of foreign workers varies by country. More than one-third of foreign workers in Germany are employed in the industrial sector, whereas in France, foreign employment stands out in the service sector. The distribution of foreign employment in Belgium is not very different from that of native employment. Finland is characterized by a high percentage of foreign employment in agriculture compared to other EU member states.
       Chapter 3 deals with the characteristics of African immigrants in Europe. Many of the workers with African origin are either from countries with an existing colonial background or with geographical proximity. In terms of human capital, immigrant workers from Africa  account for a large share of the economically active population and those under the age of 15, and are characterized by an overwhelming majority of males. Also, the education and skill levels tend to be lower among the African migrants, who also show a higher rate of unemployment rate than the native-born or other migrants. These characteristics suggest that immigrants from Africa may compete with low-skilled native workers in the receiving country’s labor market.
       The human capital characteristics of African migrants lead to socially negative perceptions and discrimination against them in Europe, which is the main focus of Chapter 4. When reviewing the previous literature and statistical evidence, the findings suggest that discrimination against African immigrants in the setting of school, workplace, and media is indeed widespread. According to the European Social Survey, the influx of skilled workers is found to be favored by the citizens of receiving countries, and negative perceptions against African immigrants are not independent of the socioeconomic status of immigrants. In addition, a difference is observed between the perceptions of immigrants from other EU countries and those from Africa. 
       Chapter 5 attempts to study the impact of the presence of the foreign workers on policy-making, and concludes that the strength of the entry restrictions during the COVID-19 epidemic was affected by share of foreign population. In the countries that are highly dependent on foreign workers, there have been difficulties in supplying labor due to entry restrictions and border closure during the COVID-19 pandemic. The empirical analysis shows that the entry restrictions were passively imposed where the share of immigrant is high. This trend was observed more conspicuously in high-income countries where various policy combinations could be used in addition to entry restrictions. Through these results, it was confirmed that dependence on foreign workers had an impact on policy-making in national emergency situations. 
       The above-mentioned results of this study can be used for future immigration policy in Korea. The social and economic impact of the influx of immigrants or migrant workers is diverse, and despite its benefits, it can lead to negative consequences such as discrimination, conflict, and polarization. As reviewed in Chapter 1, the foreign population in Korea is rapidly increasing, and given the trend of declining population born in Korea, the incentives to block the influx of foreign populations can be seen as very low. Therefore, it is necessary to develop various policy alternatives in advance to offset the negative impact of the influx of foreign manpower.
  • 러시아의 우주산업 발전 동향과 국제협력 전망
    ТЕНДЕНЦИИ РАЗВИТИЯ КОСМИЧЕСКОЙ ОТРАСЛИ РОССИИ И ПЕРСПЕКТИВЫ МЕЖДУНАРОДНОГО СОТРУДНИЧЕСТВА В ОБЛАСТИ КОСМИЧЕСКОЙ ДЕЯТЕЛЬНОСТИ

       Развитие космической промышленности во многом определяет технологический облик страны на международной арене. Приче..

    Сергей Валентей et al. Date 2021.12.30

    Russia Eurasia
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    Введение

    РАЗДЕЛ I СТРАТЕГИИ РАЗВИТИЯ КОСМИЧЕСКОЙ ОТРАСЛИ РОССИИ
    Глава 1. Формирование космической отрасли России и ее влияние на экономику
    Глава 2. Современная стратегия России в области космической деятельности
    Глава 3. Международная стратегия России в области космической деятельности

    РАЗДЕЛ II АНАЛИЗ ПРОИЗВОДСТВЕННОЙ БАЗЫ И ПРЕДПРИЯТИЙ КОСМИЧЕСКОЙ ОТРАСЛИ РОССИИ
    Глава 4. Анализ производственной базы космической отрасли России
    Глава 5. Финансовый анализ деятельности предприятий космической отрасли России
    Глава 6. Развитие рынка спутниковых космических услуг
    Глава 7. Развитие рынка космического туризма

    РАЗДЕЛ IV МЕЖДУНАРОДНОЕ СОТРУДНИЧЕСТВО  В ОБЛАСТИ ОСВОЕНИЯ И КОММЕРЦИАЛИЗАЦИИ КОСМОСА
    Глава 8. Опыт и перспективы международного сотрудничества России в области освоения и коммерциализации космоса
    Глава 9. Анализ реализации совместных корейско-российских проектов международного сотрудничества в области космической деятельности
    Глава 10. Оценка потенциала развития международных проектов Республики Корея и России         в области космической деятельности

    Заключение

    Использованная литература

    Список сокращений

    Summary
       Развитие космической промышленности во многом определяет технологический облик страны на международной арене. Причем, в эпоху IV-й промышленной революции крайне важную роль играет сфера «нового космоса», стимулирующая совместные космические проекты как на уровне государств, так и частного бизнеса.
       Уровень претензий на «новый космос» определяет и объемы финансирования развития космической отрасли. Поэтому не удивительно, что по расходам на космос, относительно объема национального ВВП в размере 0,24%, Россия фактически находится на 1-м месте. Более 0,2% от ВВП на эти цели может позволить себе на ряду с ней только США.
       Для подобной политики имеются серьезные технологические основания. 
       Огромный исторический опыт работы по разработке космической техники, ее обслуживанию и эксплуатации – сильная сторона российской космической отрасли. Вторая особенность этого опыта в том, что по причине ее закрытости в СССР, инженерам отрасли приходилось создавать все образцы космической техники самостоятельно без зарубежных партнеров, однако в тесной кооперации с многочисленными предприятиями промышленности одной страны. В результате в России сформировалась широкая продуктовая линейка космической техники.
       Успешный опыт реализации многих космических программ на протяжении десятилетий также говорит о сильных сторонах России в данной сфере. Высокие стандарты качества изделий позволили выйти на мировой рынок космических услуг. Доказательство этому то, что практически каждый второй в мире запуск в космос в начале XX века осуществлялся российскими ракетами.
       Несмотря на очевидные преимущества российских изделий космической промышленности, очевидны слабые стороны космической отрасли РФ, на что постоянно обращают внимание руководство космической отрасли РФ и ее предприятий. Во-первых, это отсутствие конкуренции производителей. Во-вторых, устаревшая производственная база ряда предприятий. В-третьих, определенная зависимость от зарубежной компонентой базы (особенно при производстве некоторых спутников связи). 
       Имеются и иные угрозы конкурентным позициям России в основании космоса.
       Это касается, прежде всего, рынка коммерческих запусков космических аппаратов, в том числе с отечественных космодромов. Ослабление позиций связано с переделом рынка за счет агрессивной ценовой конкуренции со стороны молодых космических компаний из США. Среди них можно отметить «SpaceX», за несколько лет переформатировавшей, казалось бы, сложившийся на долгие годы вперед рынок космических запусков. 
       К направлениям нейтрализации перечисленных выше негативных тенденций следует отнести развитие международного сотрудничества при реализации космических программ и проектов; динамичное развитие технологий в смежных отраслях; рост спроса со стороны экономики на космические услуги. Движение по указанным направлениям не позволит России потерять занимаемые позиции. Этому также будет способствовать ориентация руководства страны на развитие космических технологий, гарантирующая финансовую поддержку отрасли из бюджета.
       Россия является продолжателем традиций еще советской космонавтики, проложившей дорогу в космос всему человечеству в конце 50-х годов XX века. Но времена меняются и многие технологии, которые были уделом избранных, постепенно распространяются по всему миру. Это требует изменения стратегии. По этой причине, в настоящее время руководством российской космической отрасли делается ставка на перспективные разработки в области космической энергетики. В частности, ядерной энергетической установки, являющейся ядром будущего межпланетного космического буксира «Зевс». 
       Однако в условиях IV-й промышленной революции ориентация на собственные силы – ошибочная политика. В клуб космических держав входит все больше стран. И одна из них –Республика Корея.
       Совместная корейско-российская деятельность в области исследования и использования космоса основывается на общих стремлениях в государственной политике обеих стран и их технико-экономических возможностях. Если Россия способна осуществлять фактически любые виды космической деятельности, то Республике Корея это только предстоит. Но несмотря на ограниченный бюджет, выделяемый государством для KARI, в этой сфере наблюдается существенный прогресс. Например, Корея может гордиться достижениями в области спутниковых технологий связи и дистанционного зондирования Земли (ДЗЗ). Тем не менее, потенциал именно в «новом космосе» у страны огромный. Самое главное, что на волне IV-й промышленной революции эксплуатация космоса Кореей уже приводит к весьма позитивным результатам. 
       Республика Корея зарекомендовала себя в целом как надежного партнера. Речь идет об организации подготовки и запуске первого корейского космонавта. Достаточно известен и проект первого корейско-российского ракета-носителя KSLV-I. Несмотря на серию технических сложностей, ракета достигла космоса, вывела макет спутника, и это позволило Корее на основе мощной производственной кооперации с Россией сделать уверенный самостоятельный шаг для разработки и запуска KSLV-II.
       Не прекращается сотрудничество между нашими странами и по услугам космических запусков. 
       С 2003 года было осуществлено 23 космических запуска для вывода космических аппаратов, созданных в Республике Корея или по заказу корейских компаний, либо в кооперации с другими странами. При этом сотрудничество именно с Россией по числу запусков не только наиболее активное, но и не имеющее на своем счету ни одного аварийного запуска. Очевиден рост активности корейских заказчиков, намечаемый в предстоящем 2022 году на мировом рынке запусков. Ожидается рекордный 2022 год по числу запусков – 7. Можно отметить два самостоятельных запуска корейской стороной для отработки возможностей ракеты Нури с демо-спутниками. Не исключен первый космический запуск корейской частной компанией «Perigee Aerospace» ракеты “Blue Whale 1”. Россия запустит на ракете “Союз-2.1а” в 2022 году сразу 5 корейских спутников (CAS500-2 и 4 кубсата). В этом же году ожидается старт первой корейской лунной миссии. 
       Окончание сотрудничества в области разработки средств выведения на орбиту значительно снизило уровень взаимодействия двух стран. Тем не менее, возможно сотрудничество в области разработки и коммерческих пусков легких и сверхлегких ракет, спутниковой связи, ДЗЗ, поставки компонентной базы, а также фундаментальных исследований космоса. 
       Привлечение частного бизнеса к общим космическим проектам позволит увеличить их потенциал и снизить себестоимость за счет организации здоровой конкуренции. Поддержка же важнейших крупных проектов самими государствами снизит бизнес-риски.
       Успехи Кореи в реализации мобильных сетей 5G позволяют организовывать коммерческое обслуживание многих густонаселенных государств восточного полушария в кратчайшие сроки. В этом могут помочь российские геостационарные спутники. Они свяжут наземные зоны обслуживания 5G магистральными каналами без существенных вложений в инфраструктуру наземных коммуникаций. Россия также заинтересована в обеспечении мобильной связью и интернетом своих территорий, удаленных от оптико- волоконных каналов. Она реализует соответствующую федеральную программу. Однако наземное оборудование 5G в России только разрабатывается. Поэтому для России этот проект также актуален.
       Большинство современных разработчиков спутниковой связи отдают предпочтение низкоорбитальным спутникам. Планируется запуск сотен и тысяч аппаратов. А это позволяет говорить об ожидаемом взрывном расширении рынка услуг по производству спутников и их компонентов, а также о высоком спросе на пусковые услуги, по причине малого времени жизни спутников на низкой орбите. Космические аппараты на орбитах придется обновлять не реже одного раза в 5-7 лет.
       Группировка спутников, имеющая на борту космических аппаратов маршрутизатор и оборудование для межспутниковой связи, позволит иметь глобальное покрытие земной поверхности без необходимости иметь большое количество наземных ретрансляторов и волоконно-оптических магистральных каналов между ними. Перспективным видится организация оптической межспутниковой лазерной связи. Развитие совместного проекта по развертыванию космической информационной сети легко разделяется на несколько независимых с коммерческой точки зрения этапов. Каждый из них вполне самодостаточен.
       Корея и Россия имеет совместный интерес в Арктике. Он заключается в разработке больших запасов углеводородов и эксплуатации Северного Морского Пути (СМП). Энергетическая политика Кореи, основанная на водородных технологиях, требует ускорения решения вопросов получения доступа к большому количеству углеводородов. А СМП – это существенная оптимизация грузоперевозок. В обеих задачах Россия и Корея являются партнерами.
       Для осуществления хозяйственной деятельности в Арктике требуется обеспечение ледовой и геологической разведок на огромных территориях. Технологии ДЗЗ позволяют решить поставленные задачи наиболее эффективным способом. Особое предпочтение отдается радиолокационным спутникам, так как за полярным кругом имеются длительные полярные ночи, а климат Арктики характеризуется частой сильной облачностью. Оптическое ДЗЗ при таких условиях работает не эффективно. Объединив работу национальных радиолокационных спутников для решения поставленных задач, Россия и Корея получит эффективный механизм хозяйствования в Арктическом регионе.
       Возможна организация множества совместных проектов, связанных с пусковыми услугами. Важной задачей является удешевление пусковых услуг. Ее обеспечит многоразовое применение отдельных элементов конструкции ракеты и возвращаемого космического аппарата. Решенная техническая задача возвращения с орбиты тяжелого груза позволяет организовывать в перспективе производство в невесомости.
       Весьма перспективными могут быть проекты по очистке космического пространства от космического мусора и обслуживанию космических аппаратов на орбите Земли.
       Для решения фундаментальных научных проблем ученые и проектировщики Кореи могут присоединиться к международным проектам, в которых участвует Россия. Это, например, разработка и производство научных приборов для крупнейшей спутниковой астрофизической обсерватории «Миллиметрон» на базе космического аппарата «Спектр-М». Участие Республики Корея в Российско-Китайском проекте Международная Научная Лунная Станция (МНЛС) позволит на отличающихся от американского проекта «Артемида» условиях осуществлять исследование Луны. Тем более, что в настоящее время прорабатываются совместные американо-российские варианты взаимодействия при реализации МНЛС и «Артемида». 
  • 신보호주의하에서 미국의 대외경제정책 평가와 방향
    Evaluation and Direction of U.S. International Economic Policies under Neo-Protectionism

       This study analyzes and evaluates the impact of foreign economic policies implemented during the Trump administration's four-year tenure, and aims to predict the direction of foreign economic policies under the Biden ..

    Gusang Kang et al. Date 2021.12.30

    Trade policy, Industrial policy United States of America
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       This study analyzes and evaluates the impact of foreign economic policies implemented during the Trump administration's four-year tenure, and aims to predict the direction of foreign economic policies under the Biden administration launched following the 2020 presidential election. The former President Trump put “America First” as the slogan of economic policies and imposed import restrictions and tariffs on trading partners based on Sections 201, 232, and 301 of U.S. trade acts. The Trump administration's trade policies using various trade remedies not only aroused great antipathy from countries affected by those measures, but also led to retaliatory tariffs on U.S. goods and services from other countries. In addition, the Trump administration strongly promoted renegotiation, claiming that some existing trade agreements had been concluded unfavorably to the U.S., and also actively conducted new trade negotiations based on bilateralism.
       In this study, we conduct an empirical analysis to find out how the Trump administration's tariffs on imports had an effect on the U.S. economy. First, we examine the effects of the Trump administration's tariffs on steel and aluminum under the Section 232 remedy and tariffs on imports from China under the Section 301 on employment in the U.S. According to the empirical results, the tariffs have the effect of increasing employment through the protection of domestic industries. Moreover, looking at the effect of tariff imposition on industrial production, we find that it has the effect of reducing industrial production through both protecting domestic industries and imposing retaliatory tariffs. Summarizing the above results, we argue that the Trump administration's tariff measures had a somewhat positive effect on the U.S. industrial employment, but it is difficult to say that the policy effect that President Trump initially expected was achieved as the measures also had a negative effect on industrial production.
       In addition, this study conducts an empirical analysis of the impact of the 2018 tax reform on U.S. foreign direct investment (FDI) to examine the impact of other foreign economic policies promoted by the Trump administration. Based on the empirical results, the tax reform had a short-term effect in reducing U.S. FDI. However, the sharp decline of U.S. foreign direct investment in 2018 compared to that in 2017 is mainly due to returning foreign income, held by U.S. multinational technology giants such as Google, Apple and Amazon in tax havens such as the British Bermuda and Ireland, to their home country.
       President Biden strongly criticized the former Trump administration's unilateral and protectionist trade policy for not only severely eroding the U.S. leadership in the world but also having a negative impact on the domestic economy. Nevertheless, policy actions of the Biden administration so far are not likely to be significantly different from those of the Trump administration. Although the Biden administration recently reached an agreement with the EU on the withdrawal of tariffs on steel, those tariffs on other trading partners and the Section 301 tariffs on Chinese imports are still in place. The Biden administration, however, is expected to pressure China in various different ways from the Trump administration. For example, the Biden administration will continue to demand the implementation of China's commitments to the Phase One trade agreement reached by the former Trump administration with China. Furthermore, the administration is anticipated to link human rights and environmental issues to trade measures to apply more pressure on China.
       Like the Trump administration, the Biden administration's other foreign economic policy directions are showing strong protectionist perspectives. President Biden witnessed the shortage of essential medical supplies such as masks, respirators, and protective suits, as well as semiconductors for vehicles, during the global COVID-19 pandemic. Accordingly, the Biden administration has been shaping policies to address these kinds of supply chain risks due to the pandemic. For example, President Biden has decided to strengthen application of the “Buy American Act,” which stipulates that domestic products can be used preferentially in the federal government procurement sector. Moreover, he has implemented policies to reorganize the global supply chain with a focus on the U.S. in key products (semiconductors, high-capacity batteries, critical minerals, pharmaceuticals and active pharmaceutical ingredients) and industries (defense, health, ICT, energy, transportation, agriculture) excluding China.
       Based on the above analysis, this study presents the following policy implications. First, in preparation for the modernization of digital trade rules, it is necessary to strengthen digital trade cooperation with middle power countries participating in the WTO e-commerce negotiations along with a detailed analysis and review of the economic impacts. This is because the U.S. is leading the WTO e-commerce negotiations by demanding high-quality digital trade standards, and these negotiations are being conducted mainly in large advanced economies including the U.S. and the EU. Second, in the process of reorganizing the global supply chain centered on the U.S., Korea needs to take advantage of the benefits provided by the U.S. federal government and strengthen cooperation in the supply chain based on norms with the U.S. Through the ROK-U.S. summit in May 2021, Korea is planning to make large-scale investments in the U.S. in the semiconductor and electric vehicle battery fields, and the U.S. also wants to make up for weak points in its supply chain in these fields. Third, Korea needs to reach an amicable agreement with the U.S. on trade remedies that have already been applied. As seen in the results of the previous empirical analysis, it is difficult to see that the tariffs imposed by the former Trump administration had the expected positive impact on U.S. industries. In this regard, Korea should also strive to persuade the U.S. to replace existing relief measures such as the Section 232 steel quotas by raising the need to strengthen its supply chain with the U.S.
    정책연구브리핑
  • 러시아의 동북아 에너지 전략과 한-러 신협력방안: 천연가스 및 수소 분야를 중심으로
    Russia’s Energy Strategy in the Northeast Asian Region and New Korea-Russia Cooperation: Focusing on the Natural Gas and Hydrogen Sectors

       This study explores new directions for energy cooperation between Korea and Russia, focusing on the areas of natural gas and hydrogen. In particular, we derive new directions and tasks for energy cooperation between t..

    Joungho Park et al. Date 2021.12.30

    Economic cooperation, Energy industry Russia Eurasia
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       This study explores new directions for energy cooperation between Korea and Russia, focusing on the areas of natural gas and hydrogen. In particular, we derive new directions and tasks for energy cooperation between the two countries, reflecting changes in the international energy environment, such as climate change and decarbonization, which are in full swing at the global level.
       In Chapter 2, this paper examines the geopolitics of energy coming into the 21st century and Russia’s new energy strategy. First, while tracing changes in energy geopolitics and hegemony in the 21st century, we analyzed changing factors that directly or indirectly affect the new hegemony structure, such as technological development, the growth of alternative energy markets, and climate change issues. Then, we reviewed the main contents and points of Russia’s Energy Strategy to 2035 and hydrogen energy development plan, identifying the direction of Russia’s energy strategy toward Northeast Asia.
       In Chapter 3, this study conducts an in-depth analysis of the energy cooperation strategies of China and Japan, major Northeast Asian countries, with Russia. In particular, we comprehensively reviewed the progress, major achievements and characteristics of China and Japan’s cooperation with Russia in the natural gas sector. In addition, this study draws policy implications for Korea based on a careful review of energy policy directions for Russia pursued by China and Japan, which have recently declared carbon neutrality.
       Chapter 4 comprehensively evaluates Korea’s energy strategy and Korea-Russia energy cooperation. Korea’s energy cooperation with Russia has been an area of great interest since the early days of diplomatic relations between Korea and Russia. However, looking at the overall situation so far, energy cooperation between the two countries has had nearly no remarkable achievements other than the Korea Gas Corporation introducing natural gas from Sakhalin. Cooperation between the two countries in the field of gas remains at the level of commercial relations based on purchases and sales. In this regard, we proposed a plan for Korea-Russia cooperation that reflects changes in the new energy market.
       Finally, Chapter 5 presents new plans for Korea-Russia energy cooperation. This includes signing a “New Energy Partnership” cooperation agreement, vitalizing and strengthening the governance of energy cooperation with Russia, finding ways to cooperate in the area of energy in traditional and new fields, devising ways to cooperate in energy-related and other industries, and developing new cooperative measures in response to major transitions in the energy sector.
    In conclusion, this study emphasizes that strategic consideration and political will at the government level for energy cooperation with Russia will act as a key factor for the development of bilateral relations with Russia and the future of the Northern Policy.
    정책연구브리핑
  • 중국의 디지털 전환 전략과 시사점: 5G 네트워크 구축과 데이터 경제 육성을 중심으로
    China’s Digital Transformation Strategy and Implications: Focusing on Building 5G Network and Fostering Data Economy

       China’s digital transformation is emerging as a future growth engine for the Chinese economy in the post-corona era, and the US-China trade dispute is gradually expanding into the digital realm. In light of these dev..

    Wonseok Choi et al. Date 2021.12.30

    Industrial structure, Industrial policy China
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       China’s digital transformation is emerging as a future growth engine for the Chinese economy in the post-corona era, and the US-China trade dispute is gradually expanding into the digital realm. In light of these developments, we need to analyze the digital governance and data-related norms promoted by the Chinese government and recognize the differences between Korea and China. In particular, cooperation in the digital field based on 5G technology and data differs from existing cooperation in that outcomes remain uncertain in the field, while these can be expected to have a large ripple effect, indicating the need for in-depth analysis. This report analyzes China’s digital transformation promotion policy and competitiveness, based on which we seek policy implications and ways to cooperate with China to enhance Korea’s digital competitiveness. In particular, we intend to present relevant policy implications by focusing our analysis on the field of 5G technology and data, which is the most core and fundamental field in digital transformation and a key driving force in the Korean government’s Digital New Deal strategy.
       Chapter 2 examines the current status and characteristics of China’s digital transformation strategy. China has proposed the framework of “four orientations” (digital industrialization, industry digitalization, digital governance, and data valuelization development). First, China’s digital industrialization represents the increase and development of added value in the ICT industry. China is undergoing both expansion of the service and software industries in the ICT (digital) industry, and the promotion of Internet industrialization based on the growth of Internet companies. Second, industry digitalization represents integration of digital technology with other industries and triggers a digital transformation of the real economy. The size of the economy in this field accounts for more than 80% of China’s digital economy, and it is a rapidly growing field that is driving digitalization of the secondary industry. Third, digital governance means improving administrative systems and institutions through the use of digital technology. Fourth, data valuelization development means building a system to utilize data as a production factor of the digital economy. Although the economic size of the third and fourth sectors has not been estimated yet, the Chinese government is paying attention to these sectors as the digital transformation is accelerating. 
       However, despite the rapid growth of China’s digital economy, the low localization rate of industrial software and weak global competitiveness are judged to be the limitations of China’s digital transformation. In addition, China’s digital market has not been opened to foreign companies and there is a possibility that conflicts with advanced countries such as the United States and the EU may escalate in the future due to the government’s measures to strengthen its influence. It is judged that these factors will act as an obstacle to China’s efforts to promote external cooperation in the digital field.
       Chapter 3 examines the Chinese government’s 5G technology development, 5G network construction strategy and strategies by major 5G industry companies to promote technology standardization. China has been promoting the development of 5G technology since 2013, after which it began commercialization of 5G communication services in 2019, and since then has been increasing the number of low-cost base stations (3.5GHz band) and expanding coverage areas. Through this, the Chinese government intends to expand various digital service markets and implement technology development and application business models suitable for various frequency bands in the long term. In addition, the Chinese government is rapidly building a 5G network by expanding new infrastructure investment and network coordination to avoid duplicate investments among telecommunication companies. Therefore, we can expect a 5G technology ecosystem to be rapidly established in China based on this 5G network.
       Since 2018 China has introduced “group standards,” in which several entities such as companies and research institutes jointly participate in the establishment of standards, and is promoting the standardization of 5G-related technologies. This study analyzes the group standards cooperative network between members of the China Communication Standardization Association (CCSA), which occupies an important position in ICT technology and policies in China, to identify key institutions and companies in the creation of a 5G technology ecosystem. According to our analysis, the China Academy of Information and Communications Technology (CAICT), the ICT policy research institute of the Chinese government, was analyzed as the most important institution constituting the cooperative network of 5G technology group standards in China. This shows that government think tanks are playing a significant role in China's 5G technology cooperation network in terms of coordinating efforts and establishing guidelines. In addition, as the influence of the CCSA is gradually increasing in the process of international standardization in communication technology, it is expected that mutual checks and competition between American and Chinese companies will continue to intensify during the process of establishing 5G technology standards.
        The greatest competitive advantage enjoyed by China for its digital transformation is the existence of various digital companies based on its huge domestic market. This report analyzes the case of the China Mobile 5G Innovation Center, promoted by Chinese telecommunication companies and companies with major 5G technologies to create an industrial ecosystem, as a new example of open innovation. The results of this analysis show that China's 5G ecosystem has a demand for cooperation with many alternate companies, indicating the possibility of various types of cooperation models being created, and applied innovations in the 5G sector led by telecommunication equipment companies and platform companies will become more important than telecommunication companies. In addition, based on the success in major first-tier cities, various forms of applied innovation are expected to emerge in second- and third-tier cities as well.
       Chapter 4 analyzes the current status of China’s data economy, its policies, and smart manufacturing, which is expected to generate the greatest added value through the convergence of data and real economy in China. Hardware accounts for the highest proportion of China’s big data market, whereas the sales structure of the global big data market is more than half concentrated in the service sector. One of the confirmed reasons for this is that China is deploying data locally for data security and personal information protection when using big data.
       In addition, China was analyzed as holding advantages over the data economies in other countries in terms of data production, government’s initiative (policy), and data management (big data management department/data bank and exchange). China will continue developing servers and storage source technologies and promoting cloud applications, Internet security, and IDC operation capabilities, while aiming to become a early mover in technology for finance, telemedicine (online treatment), artificial intelligence, and autonomous driving. Efforts to revitalize data banks and data exchanges to build a larger data ecosystem are expected to continue as well.
       China’s fostering policy for the data sector is gradually moving from the stage of big data collection to forming an industrial chain through big data integration and sharing. In addition, China has announced the Data Security Act and Personal Information Protection Act to reorganize and revitalize the domestic data market. These data norms are: ① strengthening data control by government agencies for the purpose of national security, and ② could possibly act as a non-tariff barrier to the domestic market, while ③ related laws are already in effect but detailed rules have not been established. This means Korean companies will have to be cautious, as digital cooperation between Korea and China is likely to incur significant transaction costs due to the differences in systems between the two countries. Therefore, we can consider policy communication between the two countries as the most important task in digital cooperation.
       China’s recent promotion of “data assetization” is a process of forming the exchange value of data, characterized by the realization of economic profits through market distribution transactions. China’s first data ownership platform, the People’s Data Asset Service Platform, has been used to examine the legality of data, and in some regions related policies have been announced and platforms have been established and put into operation. In addition, starting with the establishment of the Guiyang Big Data Exchange in 2014, evaluated as the world’s first data exchange, data assetization began on an experimental basis. Since then, 16 data trading platforms in the form of open markets have been established and operated by 8 public-private joint ventures (Guiyang, etc.) or private initiatives (Chongqing, etc.).
       According to China’s “Smart Manufacturing Development Index Report 2020 (2020年智能制造发展指数报告)”, the areas of automobile manufacturing, electronic equipment manufacturing, and chemical manufacturing outpaced other industries in the development of smart manufacturing. In addition, as a result of analyzing the global value chain (GVC) participation of the top 10 industries with advanced smart manufacturing in China, exports through GVC increased in all of the top 10 industries, and in particular, forward GVC participation (i.e. producing and shipping inputs that are further re-exported) has increased compared to backward GVC participation (i.e. using imported inputs to produce goods that are shipped abroad). Therefore, if the competitiveness of China’s smart manufacturing grows rapidly in the future, there is a possibility that China’s share of added value in the GVC of automobile manufacturing, chemical industry, and electrical and optical equipment manufacturing will increase and the supply chain in China will be further consolidated. In addition, when comparing the results of smart manufacturing evaluations conducted by Korea and China up to 2019, the level of the two countries is judged to be similar. Therefore, in order to gain an edge in the smart manufacturing competition with China, it will be important for Korea to establish a smart manufacturing model based on data sharing.
       Based on the previous analyses, Chapter 5 sets out five policy implications.  Korea should: ① review the direction of its digital transformation policy, ② formulate plans to strengthen the competitiveness of Korea’s 5G industry, ③ establish strategy for information and communication technology standards, ④ design plans to expand Korea’s data market, ⑤ build communication channels with China on digital trade rules, and ⑥ utilize special economic zones in China and pursue the opening of digital services through the Korea-China FTA negotiations.

    정책연구브리핑
  • 미ㆍ중 갈등시대 중국의 통상전략 변화와 시사점
    China’s New Trade Strategy Amid U.S-China Confrontation

       This report analyzes changes in China’s trade strategy in response to US measures to check China’s influence at a time when strategic competition between the US and China intensifies, going on to draw implications f..

    Sang Baek Hyun et al. Date 2021.12.30

    Trade policy, Chinese legal system China
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       This report analyzes changes in China’s trade strategy in response to US measures to check China’s influence at a time when strategic competition between the US and China intensifies, going on to draw implications for Korea. While there are a number of studies that have analyzed the recent US-China conflict from the perspective of the US movements against China, there are insufficient studies on how China responds to these movements on the part of the US and what kind of trade strategy it pursues. Therefore, this study examines changes in China’s trade strategy in response to the US measures against China in order to provide a balanced perspective on changes in Korea’s trade environment amid the US-China conflict.
       Chapter 2 analyzed the shift in the US’s perception of China and the Biden administration’s strategy for China. With the rise of the Chinese economy, the US’s perception of China has shifted from a “cooperation partner” to a “strategic competitor,” defined as a threat to US national and economic security. US measures to keep China in check have been in full swing since the former Trump administration, and the US Biden administration is further expanding its pressure front on China. Accordingly, we looked at the US measures against China from the perspective of high-tech sectors, supply chain stability, and new trade norms (digital trade, labor, environment).
       The Biden administration’s strategic stance toward China emphasizes the right to China’s unfair practices and a comprehensive and systematic approach to safeguard national and economic security. By utilizing various means such as entity list, export control, stronger foreign investment screening, and financial sanctions, it is countering China’s growth in advanced technology, which could threaten the national security of the United States. In addition, in the course of strategic competition with China, it is promoting the establishment of a stable supply chain in the United States by reviewing the supply chain for key industries related to national security such as semiconductors, batteries, core minerals, and pharmaceuticals in the United States. Unlike the former Trump administration, the Biden administration is emphasizing joint response and pressure with its allies. The Trade Technical Committee (TTC) was formed with the EU, and the Indo-Pacific Strategy, Quad, and AUKUS were used to build a pressure front against China. In terms of global trade norms, the US is taking the lead in digital trade rules to check China’s digital overseas expansion and lead the digital trade order in the Asia-Pacific region, while also putting pressure on China through worker-centered trade policies. What sets the US strategy apart from the previous ones is that: ① it emphasizes national security and economic security, ② takes a joint response with allies that share values and trust, and ③ leads the global trade order including new trade norms.
       The paradigm of China’s trade strategy is undergoing a major shift as the US’s efforts to check China’s rise have deepened. Chapters 3 to 5 examine changes in China’s trade strategy. China’s response strategy was analyzed in terms of economic security, alliance utilization, and norms, which are the main characteristics of the US trade strategy with China drawn in Chapter 2.
       Chapter 3 analyzes the linkage of China’s economic and security strategy, which is the most fundamental change in China’s trade strategy. China proposed a twin cycle strategy in the 14th Five-Year Plan, which is intended to minimize external risks by transforming the Chinese economic structure to enable independent circulation at home, as economic security is emphasized in order to respond to the US checks on China. Accordingly, China’s trade strategy is shifting from the existing global production base and export expansion focus to emphasizing supply chain stability and creating a huge domestic market. First, the Chinese government plans to promote technological independence, foster core industries, and secure strategic resources to stabilize the supply chain. To this end, China’s trade policy is promote localization and foster the competitiveness of China’s technology and core industries through the advancement of trade and investment. In addition, China plans to raise its status in the global market by nurturing the Chinese domestic consumption market in order to reduce its dependence on foreign countries in terms of demand. To this end, China is promoting import tax preferential policies, expanding service trade, and creating new business models for foreign trade through digitalization and smartization. In addition, by reducing the negative list in areas such as high-tech industries, digital industries, and service industries, which are necessary for the advancement of China’s economic industry, it is expanding the market opening by easing the barriers to entry for foreign investment. In addition, we looked at the establishment of a cooperative platform (FTZ, state-level events, etc.), as well as the revision of laws and systems to expand the attraction of foreign investment in China. China’s trade strategy is undergoing fundamental changes as it is pursued in connection with the economic and security strategy in response to the US measures to check its expansion.
       Chapter 4 analyzed the regional network establishment strategy pursued by the Chinese government in response to the US’s containment measures based on its alliances. China’s regional network strategy is being promoted through the establishment of an FTA network and Belt and Road cooperation projects. China’s FTA network establishment has been actively pursued with neighboring countries or developing countries, mainly for the purpose of revitalizing China’s trade and investment. However, the escalation of US-China conflicts has made geopolitical factors other than economic motives more important, and competition for leadership with the US in the Asia-Pacific region is intensifying. In addition to bilateral FTAs in the Asia-Pacific region, China is actively participating in regional FTAs such as the RCEP and CPTPP. In particular, China’s application to join the CPTPP can be interpreted as considering both the aspect of establishing a high-standard FTA and the geopolitical purpose at the same time. Accordingly, we analyze the current status of the Belt and Road Initiative, which is another important economic cooperation platform in building a regional network led by China, and the problems it faces, and changes after the US-China conflict. The existing One Belt, One Road initiative was promoted with the main purpose of revitalizing trade and investment between China and neighboring countries and linking infrastructure. However, due to internal and external obstacles such as countering measures by advanced countries (the Indo-Pacific strategy, B3W, Global Gateway, etc.), dissatisfaction on the part of partner countries (debt trap, environmental or labor issues), problems inherent in the BRI project (deteriorating profitability, increase in Chinese corporate debt), and the outbreak of the COVID-19 pandemic, the implementation of the BRI Initiative has been somewhat delayed. To overcome these US checking measures and other problems, China is emphasizing international norms compliance, transparency, and sustainability in the process of promoting BRI projects, and the scope of BRI cooperation is being expanded to digital, green, and health/medical fields. In addition, by utilizing these BRI projects, China plans to strengthen cooperation in global governance such as standards and norms. Lastly, the strategic value of ASEAN is expected to increase further as the competition for leadership in the Asia-Pacific region between the US and China intensifies. The recently promoted cooperation in network building between China and ASEAN was analyzed upon this backdrop.
       Chapter 5 analyzes the global trade governance-led strategy that China is pursuing. When China joins the CPTPP, the issues are reviewed by norm, and in particular, China’s response strategy related to the state-owned enterprise norms is analyzed. China’s response to each norm is likely to be different. China accelerates domestic reform in line with high global norms for matters that are consistent with the long-term development direction of national development, while delaying as much as possible on sensitive matters related to the national system, or it is expected that a strategy will be pursued that reflects the position. In order to participate in global governance, domestic laws and institutions must be improved. The current status of domestic legalization related to commerce, which China is currently promoting, is analyzed by dividing it into sectors such as economic and commerce, digital, and competition law. China is building a legal system similar to that of the United States in order to respond to the US enactment of legislation to keep China in check in the fields of economic, trade and competition law. In the digital field, the Chinese government’s reform of the legal system for cyber security and data security and the status of domestic regulations were reviewed. This is interpreted as a preliminary step towards establishing data sovereignty in China and promoting the digital market’s openness to the outside world and participation in global norms. Through this, it was evaluated and predicted whether it is possible to change the role from the recipient of the global trade norms to a participant or maker, whether it is possible to join the CPTPP with a high level of norms, and what the intentions of the Chinese government are.
       Based on the above analyses, the implications for Korea were derived as follows.
       ① First, the importance of economic security in the era of the US-China conflict and the necessity of establishing a trade strategy in consideration of economic security were emphasized. While preparing for the strengthening of economic and national security examinations in major global countries such as the US and China, policy implications for Korea’s export control system, foreign investment examination system, and supply chain stabilization policies were presented.
       ② The necessity of establishing a high-standard regional network strategy centered on Korea was emphasized in preparation for the competition for leadership in the Asia-Pacific region between the US and China in relation to the establishment of a regional network in Korea. Implications for Korea’s regional network expansion and active diversification strategy to ASEAN, India, Africa, Latin America, etc. were presented. In addition, we discussed how to utilize the Korea-China FTA and the Korea-China-Japan FTA as testbeds for global trade norms.
       ③ In the area of trade norms and legal systems, the necessity of reorganizing the domestic legal system in line with high global standards in preparation for competition in global trade norms was emphasized. This drew implications such as the need for active response to new trade agendas and norms such as climate change and digital trade, preparation for new trade norm issues such as the prevention of forced labor led by the Biden administration, strengthening US monitoring of China-related bills and preemptive response to ripple effects.
    정책연구브리핑
  • 국제사회의 순환경제 확산과 한국의 과제
    Accelerating Transition towards a Circular Economy and Policy Implications for Korea

       The international community has been striving to achieve sustainable growth while efficiently using limited natural resources. In particular, major economies, including the EU, have recently pledged to achieve carbon ..

    Jin-Young Moon et al. Date 2021.12.30

    Economic development, Environmental policy
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       The international community has been striving to achieve sustainable growth while efficiently using limited natural resources. In particular, major economies, including the EU, have recently pledged to achieve carbon neutrality or net zero emissions one after another, and the ‘transition to a circular economy’ is being emphasized as one of the important policy measures to achieve this long-term goal. As the use of disposable items such as masks has increased due to the spread of COVID-19, concerns about how to deal with the increased waste are also growing. In this context, this study aims to analyze global efforts to promote the circular economy, main issues in waste management, cases of response in international cooperation, and review an empirical analysis of the effectiveness of certification system on the circular economy. Based on these results, it aims to provide policy implications for Korea.
       Chapter 2 examines the concept and importance of the circular economy, also analyzing the efforts of major countries and multilateral organizations to promote the transition to the circular economy. In this study, the circular economy is summarized as an economic system based on basic principles including minimum resource and energy input, maximum reduction of waste emission, and long-term use of products as much as possible. As the circular economy is expected to have a positive impact on the environment, economy and society as a whole, stronger efforts are being made by the international community to pursue it. The EU mandates producers to factor in circular economy principles from the product design stage and encourages consumers to purchase products with high resource efficiency. Japan has made efforts to lead global discussions on issues of its own interest, such as the 3R(Reduce, Reuse, Recycle) initiative. In the case of the UK, the private sector is taking a prominent role, and Korea has been announcing circular economy-related laws, policies, and implementation plans since 2020. At the multilateral level, the G7 and G20 suggest the policy direction of resource management policies for member countries and recommend that their progress be monitored. Multilateral organizations, such as the ISO Technical Committee (ISO/ TC323), are discussing the issue of international standardization related to circular economy, but response measures must be prepared against the possibility of some countries leading the working groups using this as a regulatory tool.
       Chapter 3 examines the current status of waste generation and treatment in selected countries and Korea, policy trends, and issues from the perspective of the circular economy. This is because waste management is one of the important steps that can decisively distinguish the linear economy from the circular economy. The recycling rate of municipal waste generated in the EU 28 countries improved from 25.2% in 2000 to 46.8% in 2018. In the United States, the waste recycling rate (excluding composting) slightly increased from 21.8% in 2000 to 23.6% in 2018. The amount of waste in Japan has decreased over the last 10 years, but the recycling rate steadily remains at 20%. China records continuously increasing amounts of waste and the country mainly depends on incineration to dispose of this waste. Korea’s waste increased from 400,000 tons/day in 2014 to 490,000 tons/ day in 2019, and its recycling rate was reported as 86.5% in 2019. The key issues of waste management in consideration of implementing a circular economy are as below. First, preventive measures to design and produce products to reduce the generation of waste, as well as promote the recycling of waste and conduct environmentally sound waste disposal, are becoming increasingly important. Second, with China’s 2017 ban on waste imports and the revision of the Basel Convention on Hazardous Waste, regulations on cross- border movement of plastic waste are being strengthened. Finally, in order to come up with an appropriate waste reduction and recycling policy and policy monitoring system, the reliability and availability of domestic and international statistics on waste generation, treatment and cross-border movement should be improved. 
       Chapter 4 analyzes international cooperation cases to establish a circular economy and related issues, focusing on support and cooperation for developing countries, the link between circular economy policies and international trade, and cases of private-led circular economy cooperation. First, in the case of support for developing countries, the waste sector occupies a large proportion in ODA, but the EU and UN are promoting support projects for developing countries through more diverse channels and methods. In particular, the EU is promoting various international cooperation projects such as Switch to Green and partnerships with Africa as part of the New Circular Economy Action Plan. Second, this study reviewed the Extended Producer Responsibility (EPR) system, green government procurement, labeling and standards as examples of major issues in terms of the relevance of circular economy policies to international trade. Basically, the key issue that penetrates each field is whether the introduction and implementation of each system imposes mutually discriminatory conditions on domestic and foreign companies. Lastly, cases of private sector-led international cooperation are generally promoted for the purpose of encouraging companies to voluntarily transition to a circular economy, developing circular economy labeling through business associations, or conveying corporate opinions on government policies. However, in reality, most cases of international cooperation at the private level are also promoted in the form of cooperative projects with international organizations, national governments, and non-rofit organizations. 
       Chapter 5 defines the circular economy as a policy agenda to boost reuse and recycling in consumption and production of goods in the economy. To promote the circular economy, the government may adopt the circular economy labeling system, which is an information-based environmental policy. The circular economy labeling system provides consumers with information on whether a product meets the circular economy standard. The labeling system aims to advertise and verify the information. In other words, the labeling system is considered a policy tool to solve any market failure caused by asymmetric information between consumers and producers about the quality of the product. We set up a simple mechanism design model to show how the labeling system can resolve the asymmetric information problem. In addition, we summarize the previous literature that mostly used hedonic price models to empirically examine the efficacy of the labeling system.
       In Chapter 6, policy implications are derived for the Korean government and the private sector to prepare for the spread of the circular economy. 
       First, it is necessary to go beyond existing waste management-focused policies and fully consider the entire life cycle of a product. In particular, more efforts must be made at the production and consumption stages with the goal of reducing the use of resources and minimizing the generation of waste itself. In the production stage, from the design process, it must be made more difficult to generate waste and more considerations made toward putting the used materials or parts into production later. At the consumption stage, there is a need to encourage consumers to purchase recyclable products, use them for a long time, and dispose of waste in a sustainable way. This requires providing consumers with sufficient information about the product and guaranteeing the ‘right to repair’ so that the products can be used as long as possible. Effort must be made to also promote the use of platforms such as mobile applications related to the sharing economy where consumers can share or rent products they do not need. Above all, it should be kept in mind that the transition to a circular economy is a mid- to long-term goal. Educational opportunities should be continuously provided from an early age so that people can realize the necessity of a circular economy and learn how to practice this in their daily life.
       Second, it is necessary to take a leading role in discussions of the circular economy related to international trade, focusing on the international standard for circular economy. Since various circular economy policies can affect international trade, it is necessary to fully consider these factors in the design and operation of circular economy-related policies. In particular, standards are closely related to various environmental policies, such as the labeling system and the green government procurement system. In addition, each country is focusing on the development of domestic circular economy standards, and it is highly likely that these standards will act as technical trade barriers in the future. Therefore, through multilateral channels such as IOS/TC323, it is necessary to identify trends in international standards-related discussions and actively develop international standards proposals. In addition, it is necessary to adjust the domestic standard system in line with these international standards and actively utilize the framework of bilateral or regional cooperation such as FTAs.
       Third, Korea needs to incorporate concrete international cooperation measures in its response to the circular economy, instead of focusing on domestic measures. Cooperation with the European Union, which is leading global responses, could serve as a good benchmark for Korea to establish bilateral and multilateral cooperation. Multilateral agreements and initiatives proposed by the European Union could be developed into global standards, such as the Global Agreement on Plastic Pollution and the Global Alliance on Circular Economy and Resource Efficiency. Korea also could develop further cooperation with developing countries based on the examples of the European Union and consider expanding cooperation with ASEAN member states and South Asian countries. Cooperation with Asian countries could enhance the competitiveness of companies and capabilities to tackle the circular economy for both Korea and Asian countries as well.
       Fourth, the government should prepare various measures to support the private sector to take the leading role in transition to a circular economy and strengthen its competitiveness in the global market. It is necessary to expand R&D infrastructure and financial support for basic research, demonstration, and commercialization of materials using resource-efficient or recycled materials. In addition, the government can also catalyze development of technologies to improve the production process or reduce the use of resources that can have a negative impact on the environment. For small and medium-sized enterprises (SMEs) with limited resources to implement transition to a circular economy, financial, technical and capacity-building support are needed. In the case of current green public procurement, criteria for mandatory purchase could be expanded to include products certified for using circular resources and to promote reuse of purchased products and product sharing system. In addition, since circular economy policies and regulations can make a significant cross-border impact on international trade and business activities, it is necessary to proactively monitor policy changes and trends in major trade partners and provide timely assistance for the private sector.
       Finally, design, implementation and monitoring of circular economy-related policies should be based on reliable, accurate and comprehensive data and statistics. Considering the different data standards and statistical system among OECD members, selected major economies and Korea, the harmonization of standards and criteria of data collection, such as waste treatment methods and recycling rate calculation, could be the first step to come up with effective measures to improve circular resource management. Therefore, domestic and international efforts are required to discuss internationally agreed statistical standards that can measure overall resource efficiency as well as waste generation and treatment. For this to happen, Korea needs a more sophisticated statistical system to capture and measure resource use and efficiency and material flows in each industry sector and the economy as a whole. Furthermore, it is necessary to develop indicators that can objectively evaluate various aspects of the circular economy and precisely monitor the performance of relevant policies.
    정책연구브리핑
  • 아프리카 보건의료 분야 특성 분석 및 한국의 개발협력 방안
    Analysis of the Healthcare Sector in Africa and its Policy Implication for Korea

    One of the main changes in Korea’s foreign affairs in recent years is the expansion of Official Development Assistance (ODA), especially in Africa, which is rapidly expanding. Korea’s ODA to Africa in 2010 was 15% of its total O..

    Young Ho Park et al. Date 2021.12.30

    Economic development, Economic cooperation
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    One of the main changes in Korea’s foreign affairs in recent years is the expansion of Official Development Assistance (ODA), especially in Africa, which is rapidly expanding. Korea’s ODA to Africa in 2010 was 15% of its total ODA, and it rose to 25% in 2019 as Korea emphasized its role in international development. As Korea’s expansion of ODA and solidarity in international development aid to respond to COVID-19 are related, the expansion of ODA in the African healthcare sector is anticipated to continue. This study analyzed features of the healthcare sector in Africa in an effort to suggest various plans for development cooperation that are based on an evaluation of Korea’s ODA project design to enable the effective provision of ODA.
    The contents of the paper are as follows. Chapter 2 examines the five major diseases in Africa and various features of the healthcare sector, such as infrastructure, administrative systems, governance, and policies. The five main diseases in Africa that cause death or burden of disease are neonatal diseases, HIV/AIDS, lower respiratory tract infections, diarrhea diseases, and malaria, and similar results were found in Korea’s five priority partner countries: Ethiopia, Ghana, Senegal, Uganda, and Tanzania. In these five countries, heavy funding from the international community has caused rapid declines in infection rates of, for example, HIV/AIDS and malaria, whereas neonatal conditions and cardiovascular diseases, which have not received similar levels of funding, have exhibited either slow declines or increases. In the case of neonatal conditions, it is essential to have healthcare personnel who can manage births and newborns, but deaths and the burden of disease from neonatal conditions are high due to a lack of healthcare workers. In the case of cardiovascular diseases, deaths and the burden of disease have increased in Africa due to increased vascular diseases, such as high blood pressure and diabetes, as well as overweight and obesity rates. In Africa, most patients suffering from cardiovascular diseases go undiagnosed due to underdeveloped healthcare services, accessibility, and technology, and few diagnosed patients are treated and managed.
    There is evidence that the administrative systems in Africa’s healthcare sector in general and in Korea’s five priority partner countries in particular are in a very poor situation. There are poor infection control practices, availability of medical equipment, communication with medical workers in the event of a public health crisis, and health capabilities in primary healthcare hospitals and communities. In addition, the five countries have either no quarantine system or a poor one. For example, they struggle to meet quarantine obligations, perform regular quarantining, and maintain a system related to quarantine detection and response.
    Yet healthcare governance of Africa’s compliance with international healthcare norms is at a level similar to the world average. Many countries in Africa, including the five priority partner countries, have national healthcare plans, high compliance with International Health Regulations (IHR), and high financial support against health emergencies. In addition, laboratory diagnostic systems and governance related to public health preparation planning and implementation have shown rapid growth.
    The healthcare-related Sustainable Development Goals (SDGs) include comprehensive healthcare improvement measures to achieve reductions in infectious diseases, health improvement, and welfare promotion, such as a reduction in child and maternal mortality; eradication of infectious diseases, such as HIV/AIDS and malaria; reduction in early death due to non-infectious diseases; reduction in health-threatening external factors, such as drug abuse, traffic accidents, and pollution; and adherence to policies of the World Health Organization (WHO) regarding infectious diseases, such as HIV/AIDS, viral hepatitis, and sexually transmitted diseases. Similar to the SDGs, Africa’s Agenda 2063 health strategy includes comprehensive healthcare improvement measures, such as reducing child and maternal mortality, reducing infectious and non-infectious diseases, and improving healthcare systems. The healthcare strategies of the five priority partner countries include specific plans to provide quality healthcare services and increase access to these services. While the health strategies of U.S. and global funds, major donor countries, and donor organizations have centered on prevention, detection, and infectious disease response, the United Kingdom’s health strategy has focused on improving public health and responding to global health threats.
    Chapter 3 examines Korea’s African healthcare strategy and the current status of support for the health sector, and on the basis of this, conducts a comprehensive evaluation of ODA provided to the health sector in Africa from an ODA project design perspective. Korea has gradually increased the scale of its aid to Africa by establishing a strategic plan for international development cooperation as the highest level of its ODA strategy. Along with expanding the scale of aid, the Millennium Development Goals (MDGs) have undergone changes over the past decade as more diversified and diverse partnership strategies for African cooperation have been proposed. As demand for healthcare cooperation increased due to COVID-19, Korean International Cooperation Agency (KOICA) introduced the ABC Program to strengthen its ability to prevent and manage infectious diseases and improve quarantine capabilities in developing countries as well as the immediate response to COVID-19. The Export-Import Bank of Korea also prepared healthcare infrastructure support strategies, such as disease management system support, hospital construction, and supply of medical equipment through the Post-Corona EDCF Strategy, and introduced an emergency loan system that can operate at low interest rates.
    Korea has provided a total of $670 million to the African healthcare sector over the past decade, reflecting approximately a fourfold increase from $12 million in 2011 to $47 million in 2019. The main areas of support have been different for each partner country, with western coastal countries Ghana and Senegal focusing on drinking water hygiene and eastern countries Ethiopia, Uganda, and Tanzania focusing on general health. When divided into OECD Creditor Reporting System (CRS) target codes, in the case of general health and basic health projects undertaken by Korea, the number of cases of cooperation with public institutions in recipient countries is higher than in other countries, such as the United States, the United Kingdom, and Switzerland. In particular, in the case of general health, cooperation with public institutions is overwhelmingly high at 94.1% of projects. Conversely, in the case of Switzerland, the proportion of cooperation with education and research institutes is 58.8%, indicating a strategic focus on health research. In the case of maternal and child health and population policy projects, the proportion of cooperation through non-governmental organizations (NGOs) and multi-purpose organizations is relatively high, but there has been little cooperation with research institutes or private institutions. Nevertheless, about half of the projects have been carried out through public institutions. In the case of the United States, which has invested $43 billion in African aid for healthcare, evidence indicates that it is carrying out projects through various channels, such as NGOs, private organizations, and research institutes.
    Recently, as COVID-19 has amplified the importance of countries’ health and hygiene and ability to respond to health emergencies, the demand for aid in the healthcare sector and the scale of support are increasing accordingly. The necessity of establishing a comprehensive healthcare system under the operation of a simple project unit has also increased significantly. To cope with such changes in the internal and external environments, there is a need to evaluate the project experience and Korea’s present development cooperation plan to determine if they reflect the changing characteristics of Africa’s healthcare sector. Project design is foundational work that can minimize variables that may occur in the operation stage of a project. At the same time, it is an important factor that can give signals to increase the effectiveness of development assistance through business linkage between the recipient country and other donor institutions.
    Considering the accessibility and disclosure of data, the evaluation target was limited to KOICA’s projects from 2011 to 2019 in the five priority partner countries including healthcare under Country Partnership Strategy (CPS). The evaluation criteria comply with the OECD DAC’s evaluation criteria, but the evaluation items were adjusted to reflect the areas that the researchers regarded as outliers for effective project design. In addition, healthcare includes multi-layered factors, such as finance, infrastructure, manpower, and system, and since these factors interact differently depending on the nature of the project, similar projects were clustered to understand the characteristics of each cluster. The evaluation revealed that the appropriateness of indicators for African countries’ government policies or strategies of project implementation agencies were considered carefully in the project design stage across all clusters, while efficiency, effectiveness, influence, and sustainability aspects were different for each cluster. In particular, cooperative project clusters conducted jointly with international organizations received higher scores in general on all items than those conducted directly by KOICA. Especially in the case of efficiency, they were intended to increase the effectiveness of the project through a project utility analysis conducted in advance. Population policies and reproductive health clusters directly implemented by KOICA achieved low scores in terms of efficiency, effectiveness, influence, and sustainability, indicating that risk management, administrative regulation, and consistent project design procedures should be considered in the future. However, the analysis indicated that KOICA has already agreed about the need for standardization and that efforts are being made to systematize project design, and the risks arising from the planning stage are expected to improve in the future.
    There may be a gap between development demand and supply, and Chapter 4 presents an analysis of the demand for development cooperation in the African healthcare sector. This chapter outlines the demand analysis for development cooperation in the healthcare sector in Africa entailing decision tree analysis and text mining techniques. The results of the decision tree analysis are summarized as follows. This analysis was intended to identify the health needs of each type of African country. First, the most important indicators that can be used in carrying out ODA projects in the health sector are infant and maternal mortality indicators. These indicators are the variables that have the greatest influence on life expectancy prediction and directly affect national competitiveness and GDP per capita. Second, in the five priority partner countries, life expectancy is approximately 64 years old, but if the infant mortality rate is reduced to 28 per 1,000 people, life expectancy is estimated to increase by about nine years. To lower the infant mortality rate, various health ODA projects are needed in the five priority partner countries. Third, when African countries were classified by the decision tree analysis, the group with the lowest life expectancy was only 54 years old. These groups are characterized by countries with higher infant deaths than 56.5 per thousand and higher maternal deaths than 723 (per 100,000 population). There is a need to pay more attention to healthcare projects to reduce infant and maternal deaths.
    The subsequent text mining analysis was intended to identify the health ODA demand for each detailed area. In the future, African health demand is expected to have the following characteristics. First, the demand to reduce infant and child deaths and maternal deaths will persist. The need to reduce infant and child mortality is also related to the pregnancy process of mothers. This continues to be a problem in Africa, suggesting that health ODA projects that can solve this problem should increase. Second, there will continue to be a demand for preventive measures against HIV infection. Since more than half of the world’s HIV/AIDS patients are in Africa, there is a need for ODA health projects to prevent HIV infection. Third, there will be a rising demand for water at the group (village, school, etc.) level. The demand for water has been greatly influenced by insufficient water and sewage facilities in Africa and environments in which clean drinking water is difficult to obtain, and the international community is also providing steady support for drinking water hygiene. Fourth, policies, such as case management, are also needed for infectious diseases, such as malaria and tuberculosis. Fifth, there will be a growing demand for nurses, which mainly emphasizes the need for nursing education at local hospitals. This is a problem of strengthening the capacity of nursing personnel, especially at local hospitals. Sixth, there will be an issue of training facilities and manpower at the community level. Seventh, is there is a demand related to governance in the healthcare sector. It can be said that it is related to budgetary problems and governance related to healthcare. These can be said to be problems that can improve efficiency in the process of delivering health services.
    Among the above seven demands, infants, three major diseases (HIV/AIDS, tuberculosis, and malaria), and drinking water hygiene have already, for many years, received considerable investments and are of great interest to African countries and the international community. However, the areas of supplying formal health education, facility improvement, and healthcare workers’ training at the community level and healthcare governance were recognized as relatively less important than the demand side.
    In Chapter 5, the contents analyzed in Chapters 2, 3, and 4 are comprehensively summarized to derive implications and develop a strategic promotion plan for Korea’s African healthcare ODA. Although the healthcare environment has improved in the five priority partner countries, there is still a high burden of disease, especially due to the prolonged COVID-19 crisis. Consequently, the demand for improvement in the healthcare and communication systems has increased significantly. The U.S. Development Assistance Agency (USAID) and the Australian Development Assistance Agency (AusAID) have identified healthcare governance as a risk factor that may occur in partner countries, and they continue to monitor the healthcare communication system in terms of risk management plans. However, Korea mainly provides support for basic health and maternal reproductive health. Accordingly, it is necessary to respond to the demand for local healthcare governance as well as the existing fields supported by Korea. There is also a lot of room for improvement in universal health coverage and access to emergency medical facilities.
    Meanwhile, African countries have consistently spoken out since the 1974 Bucharest Conference, and the African Union specified strategies for improving healthcare through partnerships with various stakeholders to combat three major diseases—namely, malaria, HIV/AIDS, and tuberculosis—in the 2006 Abuja Declaration. In addition, the importance of joint cooperation has recently been emphasized in areas other than these three major diseases and maternal reproductive health, such as eradication of infectious diseases and universal health coverage. Further, the African Union values linking the SDGs to healthcare goals and aims to achieve major goals, such as the Maputo Action Plan; the African AIDS, Tuberculosis and Malaria End Promotion Framework; and African Health Strategies by 2030.
    The international community emphasizes access to universal healthcare services, strengthening efficiency in delivering healthcare services, and protecting Africans from public health crises, and goals such as the Triple Billion targets have been established accordingly. It also emphasizes targeting, life-cycle approaches, and approaches tailored to individual characteristics to prevent the segmentation of diseases. As a result, demand for cooperation in major healthcare areas by life cycle is increasing, without neglecting the importance of the three major diseases, and cooperation in other important areas, such as nutrition and health services, infectious and non-infectious diseases, and social services for the elderly, is expected to increase. In particular, Korea’s donation strategy centered on the three major infectious diseases and maternal reproductive health is also expected to require a slight shift, as the burden of diseases and deaths from adult diseases and traffic accidents are gradually increasing in some countries, including Ghana.
    Through the 3rd Comprehensive Plan for International Development Cooperation, Korea strengthened strategies, for example, for expanding the size of ODA in the healthcare sector, expanding public–private cooperation, responding to infectious diseases, establishing healthcare systems, and establishing basic hygiene infrastructure. However, to implement more integrated and unsegmented aid, the importance of presenting customized goals along with program access in the healthcare field is also emerging. For example, KOICA is planning a healthcare project focused on intervention in three major areas necessary to lower the maternal mortality rate using Thaddeus and Maine’s (1994) three delays model of maternal mortality. This approach is expected to be necessary not only for maternal deaths but also for areas such as basic health, general health, drinking water hygiene, infectious diseases, and infant deaths. In particular, efforts should be made for the international community and Korea to achieve common goals through healthcare donation projects. For example, USAID is carrying out aid projects by establishing programs focused on activities that allow for meeting mid- to long-term goals in the healthcare sector that will facilitate meeting the core goals. To improve project effectiveness, Korea will also need to approach this on a program basis, but it will be necessary to establish a project design focused on activities aimed at achieving key goals in the healthcare sector.
    Meanwhile, for Korea to improve the effectiveness of its aid projects in the healthcare sector, it must accumulate more information on the local area. In particular, to identify the beneficiaries of the project, on-site surveys should be conducted in more depth, but in situations where there are physical constraints, such as the survey period and budget, these are clear limitations to grasping the demands of beneficiaries. Accordingly, alternative data, for instance, from identifying local demand, can be collected through communication with officials of the partner countries. To overcome the aforementioned limitations, it is necessary to utilize not only field experts but also local experts in the pre- or project design surveys and grasp the healthcare status of the project target site through the results of the population and health survey.
    Korea will be able to cooperate with its priority partner countries to improve Africa’s healthcare delivery system. For example, Korea has a comprehensive crisis management system for the outbreak of infectious diseases, and a healthcare communication system using digital devices is well established. However, the partner countries have had communications difficulties in responding to COVID-19 despite the digitalization. Therefore, there will be a continuous demand for cooperation in establishing a healthcare delivery system in cooperation with Korea. In addition, it is necessary to strengthen the capabilities of public health centers to strengthen basic medical capabilities. Tier 2 and tier 3 hospitals in the five priority partner countries are mainly concentrated in cities, and accordingly, local residents living in rural areas must seek healthcare services from local health centers. With this in mind, it will be necessary to expand cooperation to strengthen the capacity of community health workers in public health centers. Meanwhile, information and communications technology (ICT)-based pharmaceutical supply chain management will be a promising field for cooperation as ICT can enable real-time management of medical and pharmaceutical products, such as health centers, and prevent delays in treatment due to lack of medicines.
    With the COVID-19 pandemic, global demand for Korea’s infectious disease diagnosis, tracking, and monitoring system has increased rapidly, and African countries are no exception. There is an increasing need for cooperation in the formation of infectious disease diagnosis and tracking systems in the five priority partner countries, for instances, to strengthen the capabilities of infectious disease screening centers, build digital platforms, and enhance human resource capabilities. In particular, Korea is developing or testing mobile diagnostic equipment for tropical diseases centered on startup companies, and the establishment of a mobile diagnostic system is expected to be of great help in improving the disease diagnosis rate, especially for African rural residents.
    To expand cooperation in the healthcare sector, efforts to link the cooperation sector are also needed. Public health insurance systems have not been established in the five partner countries because they require considerable national funds. However, if there is no public health insurance system, medical service costs are high, and the ratio of self-pay increases, making it highly likely that residents will deplete their financial resources to receive medical services or have very low access to healthcare services. Therefore, it seems necessary to expand cooperation to support the medical insurance system to which local residents can voluntarily subscribe, such as community-based health insurance. In addition, it is necessary to expand public–private cooperation projects in the construction of hospitals. For example, Lesotho’s project to build Queen Elizabeth II Hospital raised project funds by attracting private capital and guaranteed private profits while allowing patients to receive treatment at appropriate costs. There are various methods for undertaking public–private cooperation projects, but it is necessary to respond to healthcare demands, such as hospital construction, by attracting private capital according to the circumstances of each country.
    In addition, efforts to enhance synergy effects through a convergent approach are needed. Convergent approaches include links between projects or clusters (general health, basic health, population and reproductive health policy, drinking water and hygiene), links between grant and concessional loan aid, and links between sectors. One example is the linkage between the Export-Import Bank of Korea’s water and sewage infrastructure construction project and KOICA’s water-related education project. Another key cooperation area is the regional development project. This is a program approach in which multiple organizations participate in healthcare ODA projects, and for efficient implementation, an integrated approach is needed, such as establishing a common performance management system from the initial stage of the project (project formation, project discovery, project planning).
    Finally, multi-bilateral (multi-bi) aid projects are necessary. The proportion of multi-bi aid in African healthcare ODA exceeds 30%, which can be seen as a result of the aid strategy that takes into account the regional characteristics of Africa and Korea’s aid capabilities. Considering the restrictions on physical accessibility caused by the COVID-19 pandemic, it is expected that the multi-bi aid method will inevitably increase further. For existing bilateral aid projects that are highly workable but face many difficulties in their execution, it is necessary to reorganize them in the form of multi-bi aid with international organizations or to cooperate with only some projects.
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  • 한국의 지역별 개발협력 추진전략: 아시아 지역 ODA 지원 방안
    Korea’s Regional Cooperation and ODA Policy in Asia: Performance and Challenges

    The Asian region has drawn great attention as an emerging market with relatively stable growth since the 1990s. The COVID-19 pandemic crisis, however, has revealed its structural vulnerability, intensifying socio-economic inequali..

    Kwon Yul et al. Date 2021.12.30

    Economic development, Economic cooperation
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    The Asian region has drawn great attention as an emerging market with relatively stable growth since the 1990s. The COVID-19 pandemic crisis, however, has revealed its structural vulnerability, intensifying socio-economic inequality in the region. Economic activities have shrunk due to the lockdown measures, resulting in stagnation and widening the income gap. Uncertainties have also increased in the environment for development cooperation in the region, which calls for a new approach for effective implementation of official development assistance (ODA).
    This study aims at deriving Korea’s mid-term ODA strategies towards the Asian region by analyzing changes in the development context and conditions for cooperation in the region since the pandemic, as well as progress in the Sustainable Development Goals (SDGs) and the development gap. As economic interdependencies with Asian countries have intensified, Korea’s ODA has given the highest priority to the region: fifty to sixty percent of its ODA has been directed to Asia and sixteen out of twenty-four priority partner countries are in the region. The Korean government has also pursued diplomatic diversification focused on strengthening partnerships with Asian emerging markets, particularly under the New Southern and Northern Policy. 
    Establishing an effective ODA strategy in the post-COVID-19 era requires not only country-specific assistance plans but also a regional approach which incorporates the diverse development needs, so as to improve policy coherence as well as development effectiveness. As the demands from developing countries willing to share Korea’s experiences and know-how in response to COVID-19 have increased, the role of Korea’s ODA has gained its importance particularly in the health sector. The uncertainties further increased by the recent spread of the omicron variant, however, make more difficult the implementation of ODA projects in addition to normal economic activities.
    While the Korean government continues to support the Asian region as a priority, the overall strategy lacks integrated regional approach as Korea’s ODA has been based on individual country strategies—Country Partnership Strategies (CPS). In this context, the study suggests ODA strategies which reflect the regional characteristics and specific ways for strengthening the strategic alignment between ODA and the government agenda based on the Third Mid-term Strategy for Development Cooperation (2021–25) and major foreign policies. In addition to health crises, it also considers the needs for responding to various challenges caused by climate change, natural disasters, and migration from a regional perspective.
    As Chapter Two demonstrates, COVID-19 has increased socio-economic uncertainties in the Asian region in diverse ways. Economic growth has been slow due to the lockdowns and restricted economic activities. With the prolonged stagnation, poverty and food insecurity have increased, and educational outcomes and multifaceted inequality have deteriorated. International support has been limited with the implementation environment worsening, which has also had negative impacts on progress towards the SDGs in areas such as poverty reduction, food security, education, health, gender, environment, etc. To mitigate the negative impacts of COVID-19 and support the SDG implementation in Asian developing countries, development assistance must be allocated into relevant sectors by country, taking into account the differences in development needs and factors that hinder progress of the SDGs.
    Chapter Three presents the target size of Korea’s ODA to Asia along with the financial requirements and four possible paths to achieve such a target. To achieve the 0.2% of GNI goal by 2030, it is estimated that a total of 20.6 billion USD is required for the next ten years. This normative target amount calls for a detailed review of practical resource allocation plans, as well as greater efforts to mobilize such resources for responding to the development needs caused by COVID-19 and supporting SDG implementation.
    Chapter Four reviews Korea’s ODA to Asia in terms of its strategies and performances, finding that Korea’s ODA structure makes it difficult to implement integrative ODA programs in response to region-wide development challenges or in collaboration with regional bodies, since the focus of Korea’s ODA strategy has been on the individual countries. Although Korea has made efforts to promote government-wide strategic programs under the New Southern and Northern Policy, the current “bottom-up” approach, in which each ministry or agency initiates and implements its own ODA projects individually, impedes establishing integrated strategies and systematic and efficient delivery. To plan and design top-down strategic programs which reflect Korea’s policy priorities, as well as the regional development challenges, are essential in establishing a regional ODA strategy towards Asia.
    Based on the findings in the earlier chapters, Chapter Five identifies the characteristics for a regional development cooperation strategy by conducting a comparative analysis of the regional assistance strategies of major bilateral and multilateral donors and detailed reviews of “top-down” strategic programs, and finally suggests policy directions for Korea’s regional ODA strategy towards Asia, as follows.
    First, the worldwide crisis caused by COVID-19 has revealed that the development challenges which the Asian region is facing cannot be solved by individual countries but by regional or sub-regional efforts, which will require stronger foundations for integrated cooperation with regional communities. Strengthening inclusive partnerships would be a key to mitigate the development gap in the region, by supporting regional programs such as the ASEAN Connectivity, ASEAN Smart City Network, and Mekong Subregion development projects.
    In response to the pandemic and health security crisis, Korea needs to extend its assistance not only to individual counties but also for region-wide programs. The establishment of the ASEAN Center for Disease Control, contribution to the Asia Pacific Vaccine Access Facility (APVAX), and increase in support to multilateral organizations and international initiatives can be good examples.
    Lastly, new ODA modalities involving private capital in the form of public-private partnership (PPP) are required to support green and digital sectors as well as infrastructure development in the Asian emerging countries, by designing large flagship projects and encouraging participation of the private sector. Establishing strategic programs and active policy dialogues with development partners will improve the effectiveness and efficiency of Korea’s ODA. Government-wide efforts are also called for to diversify development finance through PPP, to strengthen the coordination of ODA projects with the private sector to maximize synergies, and to increase collaboration with multilateral development banks.

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처음 2122232425 마지막

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