국문요약 

제1장 서론

제2장 개발협력과 기후변화 통합적 대응: 논의 경과
1. OECD 개발원조위원회(DAC)
2. 다자개발은행 전략과 정책방향

제3장 개도국 기후변화 취약성과 대응 노력
1. 페루의 기후변화 취약성
2. 페루 국가발전전략과 기후변화 대응
3. 소결

제4장 주요 공여국의 기후변화 대응전략
1. 미국
2. 독일
3. 스위스
4. 소결

제5장 우리나라의 기후변화 대응정책
1. 주요 정책동향
2. 페루 지원 현황
3. 소결

제6장 결론

1. 요약
2. 기후변화와 개발협력의 통합적 접근을 위한 과제

참고문헌

부록

Executive Summary

   In conjunction to the UN General Assembly held in September 2019, UN Secretary-General Antonio Guterrez convened the first UN Climate Action Summit. Recognizing that the international community has so far failed to adequately combat the causes and consequence of climate change, the Summit was intended to bolster international action on climate change. National leaders, local communities, private enterprises and financial institutions stakeholders attended the Summit, reaching a unanimous agreement to amplify action to respond to and mitigate the impact of climate change. Among some notable pledges were Korea announcing its plan to increase climate finance by two-folds, to USD 200 million, and to host the P4G Summit in 2020, thus demonstrating its willingness to take part in global action.
   As the international community strives to promote climate actions, this study was conducted to explore how we can mainstream or integrate climate change into Korea’s international development cooperation activities. Along with gender equality, Korea embraces climate change as a cross-sectoral challenge and reflects this in its development cooperation activities. However, the OECD DAC 2018 Peer Review suggested that Korea should address the impact of climate change in its development cooperation activities more extensively. In an effort to make such improvement, this study first examines the contemporary discussions regarding climate change and international development. The study analyzes a selection of notable policies, guidelines and tools implemented by major donors, based on the framework provided in the recent peer-learning exercise of the Greening Development Cooperation by the OECD DAC. In order to reflect on the actual implications of such policies, guidelines, and tools, we selected Peru – a climate vulnerable country – as the subject of our case study. We examined how such policies, guidelines, and tools were applied in the field through a review of existing literature and extensive field work. By comparing and contrasting donors including Korea, we seek to present applicable measures and longer-term policy suggestions for Korea to better integrate climate change with development cooperation. The details of the study are as follows.
   Chapter 2 summarizes the discussion between the OECD and the Multilateral Development Bank on integrated response to development cooperation and climate change. First, we reviewed discussions at the OECD DAC, as embodied in its policy guidance “Integrating Climate Change Adaptation into Development Cooperation” published in 2009, and introduced in its new guidelines announced at the end of 2019 under the title of “The only way forward: aligning development co-operation and climate action.” Next, we analyzed the current status of climate change response in the international community using the OECD’s statistics system, and reviewed the major elements required to comprehensively reflect climate change in development cooperation activities, based on lessons gained by the peer-learning study of DAC members announced in 2019 by the ENVIRONET working party to harmonize environment and development concerns. We also examined climate change strategies and tools (safeguards, monitoring and evaluation measures) used at multilateral development banks such as the World Bank, ADB, and IDB, and reviewed private sector-led climate change mainstreaming initiatives and key principles and tools. The purpose of this examination was to identify the progress and direction of international discussions.
   In Chapter 3, we reviewed the vulnerability of climate change in our case study country, Peru, and the current status of policies in the area by the Peruvian government. Peru, with its diverse topography, is vulnerable to climate change impacts. In the northern coastal regions, heavy rains and floods and landslides caused by El Niño and La Niña are frequent. In the southern coastal regions, water shortages and agricultural damage due to changes in precipitation and loss of alpine glaciers are increasing. In alpine areas, landslides, chronic water shortages and abnormally low temperatures are caused by melting alpine ice. Tropical rainforests, meanwhile, are being appropriated for economic activities, reducing their capacity as greenhouse gas sinks and accelerating climate change. In Peru, these climate change impacts hinder sustainable development because they have a particularly harmful effect on the poor and other vulnerable groups, who are dependent on natural resources as they lack the resilient infrastructure for climate phenomena such as housing, bridges, roads and water and sewers. The Peruvian government has a national policy aimed at minimizing the socioeconomic impacts of abnormal climates. Peru's National Development Strategic Plan clearly places climate change and the environment at the center of its main strategies and uses national environmental policy, mid- and long-term environmental action plans, environmental action agendas, and other policy instruments for public environmental management. On the international side, the government submitted an INDC document and a National Report (NC) to the UNFCCC in 2016, detailing its plans to integrate climate change management in national development and expressing its commitment to address environmental and climate change issues. However, the field survey indicated that climate change response has been placed on the back burner compared to other urgent development tasks, not only in development cooperation activities, but also in the implementation of government- wide development policies.
   Considering these characteristics of climate change and the situation in Peru, Chapter 4 analyzes how, and under which background, advanced donors are integrating climate change and development cooperation activities. Upon reviewing the climate change strategies, policies, and climate risk assessment tools in place at major donors to Peru (the United States, Germany, and Switzerland), it was evident that donor countries had developed their own strategies to reflect climate change in development cooperation activities. Climate change had been adopted as a cross-sectoral issue in international development cooperation strategies at the government level. Germany does not have an open climate change strategy or development cooperation strategy, but is consistently leading the way in international climate change negotiations and development cooperation. Donor countries commonly analyze risks and impacts related to climate change in the early stages of the project (excavation and planning) and include them as business elements, using various tools such as risk and impact assessment, safeguards, checklists and databases. During our review of donor countries’ strategies, policies, and tools for cooperative activities with Peru, we were able to see cases where short- and medium-term climate risks were identified in the early planning stages of the project using the tools mentioned above.
   Chapter 5 reviewed relevant policies and their implementation status in Korea and the current state of support for Peru, the only key partner country where climate change response was included in support goals. The 2nd Framework for International Development Cooperation and the Country Partnership Strategy (CPS), which were announced in 2016, did not explicitly address climate change, but since then, we can confirm efforts to understand climate change from a more integrated perspective, made visible in the climate change strategies formulated at executing institutions, evaluations of mainstreaming efforts in climate change conducted by the Committee for International Development Cooperation, and comprehensive execution plans announced recently. Meanwhile, in the case of Peru, our case study target, while response to climate change is set as the main support goal, there are few projects directly or indirectly related to climate change, and no comprehensive considerations are being made for the mid- to long-term impacts of climate change, diminishing the visibility of implementation achievements. In addition, environmental screening tools are the only tools used to identify climate risks in advance, suggesting that there is a lack of mechanisms for identifying potential climate risks, when compared to the case of advanced donor countries reviewed in Chapter 4.
   Based on the above analysis, Chapter 6 summarizes the main findings, suggests an integrated approach to climate change and development cooperation, and presents future tasks. The analysis of donor countries confirmed that donors are supporting recipient countries through systematic tools based on action taken at the government level to respond to climate change. At the same time, since developing countries have a relatively low development priority in responding to climate change despite their high climate vulnerability, the role of the donor country becomes more important. Thus we propose to reflect these facts in the 3rd Basic Framework for International Development Cooperation and National Cooperation Strategies as a measure that could reinforce Korea’s policy will to participate in the response to climate change, a global challenge. We also suggest an integrated consideration of climate change in individual projects and in the monitoring and evaluation process. In addition, it will be essential to strengthen awareness in recipient countries to allow them to respond effectively and efficiently to climate change impeding their sustainable development.
   As we can see from the recent controversies over particulate air pollution and climate refugee issues, climate change is a global problem that transcends national borders and is a challenge that calls for a joint response from the international community. In particular, damages from climate change are more severe in developing countries, and in some cases have a significant impact on greenhouse gas emissions. Therefore, an integrated approach to responding to climate change is needed in all development cooperation activities. This study further identifies tasks necessary to realize such an integrated approach to climate change and development cooperation ‒ namely, the promotion of policy will, development of policy tools to integrate climate change agenda, and support measures to raise awareness in recipient countries. More specifically, these efforts would include the integration of climate change response measures into Korea’s development cooperation policies to improve the policy agenda, an evaluation system to monitor climate risks at the level of individual activities to allow an integrated consideration of climate change, and activities to develop and promote the use of various policy tools such as checklists and safeguards. By taking account of climate change in all development co-operation activities using these policy tools, it will be possible to elevate the relatively low priority of climate change activities and raise awareness in recipient countries.

국문요약 

제1장 서론 

1. 디지털 전환과 러시아 
2. 러시아의 디지털 경쟁력 평가

제2장 러시아의 디지털화 정책 역사  

1. 러시아의 디지털 경쟁력에 대한 자신감과 역사적 경험 
2. 과거의 경험과 역사에 토대를 둔 러시아의 디지털 전환 정책
3. 소련의 디지털 정책 
가. 컴퓨터의 개발과 도입 
나. 자동제어시스템 
4. 러시아의 디지털 정책 

제3장 러시아의 디지털 경제 현황 

1. 러시아의 디지털 경제 생태계와 발전 수준  
2. 국영 및 국내 기업이 강세인 IT 플랫폼 및 기술 기업들
3. 러시아 엘리트 그룹 간 디지털 영역 주도권 경쟁  

제4장 러시아의 디지털화 관련 주요 국가 프로그램 및 정책 

1. ‘국가기술이니셔티브(NTI: National Technology Initiative) 2035’ 
2. ‘디지털 경제’ 및 ‘디지털 경제 프로그램 실현 관리시스템’  
가. 러시아의 ‘디지털 경제’발전 방향 
나. 디지털 경제발전 관리 
3. 러시아의 디지털 생태계 발전과 국내 기업들의 대응
4. 러시아의 디지털화로 야기될 수 있는 사회경제적 문제들 
가. 실업률 증가 
나. 교육시스템의 디지털화 정체
다. 기술적 의존에 따른 국가주권 침해
라. 디지털 세계화의 영향 
마. 낮은 수준의 정보보안에 따른 사생활 침해 
5. 러시아의 디지털화에 대한 SWOT 분석  

제5장 러시아의 디지털 전환과 국제협력
1. 러시아와 중국 협력 
가. 디지털 시대 러시아와 중국의 협력 현황 및 전망 
나. 러시아와 중국 간 과학기술 협력의 역사 및 제도적 기반 
다.러시아와 중국의 협력에서 기존의 통계와 새로운 흐름들  
라. 러시아와 중국 간 산업 및 기술 분야에서의 투자와 협력 
마. 디지털 실크로드에서 중ㆍ러 협력의 중점 과제 
2. 러시아와 이탈리아 협력  
가. 디지털 시대 러시아와 이탈리아의 경제협력 전망 
나. 냉전기 러시아와 이탈리아의 경제ㆍ산업 관계: 전략적 선택과 상호의존 협력
다. 소련 붕괴 이후 러시아와 이탈리아의 신협력전략  
라. 러시아 이탈리아의 디지털 협력 전망
 
제6장 한ㆍ러 디지털 협력 방향과 전망

참고문헌 

Executive Summary

   The trend of digitalization continues to gain pace throughout the world. The Russian government also considers the “digital economy” a key national task and has announced detailed implementation plans. In this context, the National Technology Initiative (NTI) was adopted in April 2016 and Technet Roadmap 2035 set up in February 2017.
   Digital transformation is important for Russia as it aims to fundamentally reform its economic structure and raise industrial competitiveness. However, the current sanctions against Russia have acted as barriers to technological cooperation with the West. 
   Meanwhile, the development of 4th industries is one of the major pillars on which Korea has established its new economic development policy. The government has actively pursued international cooperation in these fields. Against this backdrop, cooperation in the digital economy between Korea and Russia is both feasible and likely to contribute to sustainable relations.
   Both Korea and Russia seek to develop digital infrastructure, conduct joint research, establish startups and jointly enter third markets. Detailed joint policies and programs must be prepared on both sides to complete this digital transformation and produce successful bilateral cooperation in the digital sector. Technological cooperation could be possible in the areas of artificial intelligence (AI), blockchain technology, 5G infrastructure, big data, cyber security, etc. Cooperation will also be necessary in the new markets created by 4th industrial technologies.
   The lessons learned from China’s and Italy’s cooperation with Russia indicate that national policy and mechanisms for bilateral cooperation are necessary. Therefore, we suggest the conclusion of a “joint digital economic initiative” between Korea and Russia, based on which a roadmap can be formulated. As leaders on both sides have agreed on cooperation in the 4th industries, it is now time to design more specific cooperation projects and establish relevant institutions.

Executive Summary

I. Introduction

II. Income Inequality and Inclusive Growth
2.1. Income Inequality of APEC Members
2.2. Literature Review on Inclusive Growth

III. Developments in Structural Reforms in APEC
3.1. Trade Liberalization
3.2. Financial Liberalization

IV. Empirical Analysis
4.1. Model
4.2. Data
4.3. Results

V. Conclusion and Policy Implications

References

This paper empirically analyses the simultaneous impacts of structural re-forms - trade liberalization, capital account liberalization, and financial liberal-ization - on inclusive growth using panel data for 17 APEC member econ-omies covering years from 1970 to 2016. The results show that capital ac-count liberalization and growth of market capitalization are positively associ-ated with inclusive growth of APEC member economies, especially non-high-income member economies. Trade liberalization has a negative impact on inclusive growth only of the whole income group. We further find the robust evidence that the expansion of domestic credits provided by financial sectors had a negative impact on inclusive growth. These results give implica-tions that governments of APEC member economies need to design trade policies in a way of expanding outcomes of trade liberalization in a more inclusive way and of increasing extensive margins of export sectors. In addi-tion, they need to design policies to increase access to the financial sector for the poor and socially marginalized people.
 

Executive Summary

​

I. Introduction

II. Two-Sided Matching Model

III. Empirical Strategy
1. Data Description
2. Estimation Methodology

IV. Empirical Results
1. Determinants of Merger Partner Selection
2. Model Goodness-of-Fit
3. The Impacts of Technology Similarity and Diversity on Post-Merger Innovation

V. Conclusion and Discussion

References

This paper examines drivers of merger partner selection and impacts of those factors on post-merger innovation outcomes analyzing 1,432 merger transactions in U.S. ICT industries. Throughout the paper, technological similarity between merging firms and technological diversity of an individual firm are important factors affecting firms' merger partner choice. In order to show their impacts on merger partner selection, we use a two-sided matching model as a theoretical framework and employ a maximum score estimation as an empirical methodology. With these empirical strategies, our findings are summarized as follows. First, technological similarity between merging firms has positive effects on merger value creation. This implies that similar technologies between merging firms plays an important role in choosing their merger partners. Second, technological diversity of an individual firm increases expected merger values. This means that firms tend to choose their deal partners with diverse technologies for the purpose of maximizing their expected merger values. Lastly, we estimate post-merger innovation impacts for actual merger transactions. As a result, estimated merger values created by technological similarity and diversity increase the number of merged firms' patents after merger. This implies that expected merger values are realized through the channel of post-merger innovation outputs.
 

Executive Summary

I. Introduction

II. Literature Review

III. Minimum Wages in APEC Economies

III. Minimum Wages in APEC Economies  16

IV. Data

V. Empirical Model

VI. Results
6.1. Results from the linear models
6.2. Main Results

VII. Conclusion54

References

This paper investigates the effects of an increase in minimum wages on wage inequality and gender pay gap in APEC economies using unbalanced economy-level panel data from 1990 to 2017. We estimate both linear and quadratic models of the effective minimum wage, while controlling for mac-roeconomic variables that could affect wage inequality as well as gender pay gap. The increase in the minimum wage has the effect of alleviating the wage inequality at the lower-tail of the wage distribution. The effect is much greater for women than for men, which contributes to reducing gender pay gap. On the other hand, the rise in the minimum wage does not affect the wage ine-quality at the upper-tail of the wage distribution for both women and men.
 

Executive Summary 

1. Introduction 

2. A Sectoral Analysis 
2-1. Legal Services
2.2. Health Services
2.3. Educational Services
2.4. Audio-Visual Services

3. Conclusion and Policy Implications 

References 

This paper seeks to analyze the major factors behind why each stakeholders in the legal, health, educational and audio-visual service sectors in Korea op-pose liberalization in a qualitative political economy context as well as to pro-vide alternative strategies for further liberalization in these four service sectors. In legal services, the foreign equity ceiling of 49 per cent for joint venture law firms may be lifted as long as the present regulation against the number of FLCs in a joint venture law firm exceeding the number of Korean lawyers is maintained. In health services, as a step-by-step approach, we can first con-sider a system where incorporated hospitals can be established and liquidated more freely by deregulating current limitations placed on the disposal of re-maining properties, while an overly distribution of dividends is restrained. In educational services, in order to deregulate limitations regarding the disposal of remaining properties, it will be necessary to enhance the transparency of management and operation of private schools. In this regard, allowing school foundations to take the form of a limited liability company could be considered, since they would then become subject to external financial audit. In audio-visual services, it will be necessary to improve monitoring and im-plementation of intellectual property rights as well as competition policy when considering further liberalization.
The major factors compelling each stakeholder in the legal, health, educational and audio-visual services to oppose further liberalization can be summarized as a general mindset towards uniform equity and control, cultural factors pre-venting discussion on rational alternatives, insufficient government budget for universal services, lack of administrative capacity in policy implementation and monitoring, absence of a proper system to evaluate the quality of ser-vices, asymmetry of information, and persistence of acquired rents.
In order to correctly identify and understand the nature of problems, the highest priority should be placed on reducing the mistrust among the con-stituents. This is because mistrust among the constituents acts as the most important impediment when attempting value-creating negotiation strategies among each of the stakeholders. Meanwhile, to build trust among all constit-uents, free flow of information works as an important factor.
Therefore, the problems of mistrust and lack of free flow of information are the most important impediments to improve those constraints that were analyzed in the selected service sectors. In addition, they are interlinked with each other, so that dealing with these problems simultaneously is a rational solution. In order to accomplish this, it is utmost important to develop the capability of each constituent to allow them to interpret specific pieces of information without distortion. In this regard, upgrading research and educa-tion of economics also becomes imperative.
 

Executive Summary

​

I. Introduction

II. Issues in S&T Policies towards MSMEs in Vietnam

III. Theoretical Framework: Technological Capability Approach

IV. Empirical Study
4.1. Data and Variable Construction
4.2. Estimation results

V. Conclusion

References

Promoting MSME innovation has been one of the priority work pro-grams of APEC. MSME innovation policy in the APEC and member econ-omies such as Vietnam, has focused on promoting venture capital and startup firms in the ICT industry. This study critically examines such a policy approach, and argues that deepening industrial production capability of MSMEs through the accumulation of technological capability is paramount. To do so, the study undertakes an empirical analysis of determinants of technological change among MSMEs in Vietnam based on the technological capability approach. The study finds that: sales revenue is the most powerful explanatory factor in a firm’s decision to innovate, investment in machines and equipment has a more significant impact on innovative activities than formal R&D, and size of the firm may matter for both quantity and quality of innovation. Further, different types of technological capability maybe more important for different types of innovative activity. Therefore, it is im-portant to 1) upscale private enterprises to bolster their technological capabil-ity; 2) to direct resources to medium enterprises that play an important role in coordinating smaller firms and diffusing technology transferred from larger firms or FDI firms; and 3) to provide tailor made technological consulting for MSMEs depending on their technological trajectory and S&T strategy, rather than focusing simply on subsidizing formal R&D.
 

Executive Summary

I. Introduction

II. Empirical Methodology and Data
2.1. Spillover Index
2.2. Dynamic Factor Model
2.3. Data and Latent Factor Estimation

III. Stock Return Connectedness
3.1. Connectedness of Individual Markets
3.2. Connectedness of MSCI-Classified Groups

IV. Market Volatility Connectedness
4.1. Connectedness of Individual Markets
4.2. Connectedness of MSCI-Classified Groups 
4.3. Dynamic Volatility Connectedness

V. Concluding Remarks

References
 

   This paper addresses network connectedness in stock returns and volatili-ties across the Asia-Pacific economies over the pre- and post-GFC periods. This study also uses the MSCI-classified group-specific latent factors to ex-amine their connectedness among the developed and emerging markets in different Asia-Pacific regions. We find that (i) based on the return connected-ness measures, global financial hubs - Singapore and Hong Kong - and Aus-tralia play an important role as efficient return information transmitters across stock markets, (ii) the United States is an overwhelming volatility transmitter as a net source of shocks during the global financial crisis, and subsequent volatility spillovers spread the crisis shock to each other in the region, (iii) comparing the results between the pre- and post-GFC periods, Canada was a net volatility transmitter before the GFC but has changed to a net volatility receiver after the GFC, and Korea has magnified the position of a net volatil-ity receiver after the GFC, and (iv) in terms of the degree of total spillovers in returns and volatilities at large, stock market connectedness in the Pacific Rim was reinforced after the GFC. These findings support the potential fea-sibility of financial cooperation and uphold a cause of regionally coordinated macro-financial policies against systemic risk vulnerability.

Keywords: APEC, Stock markets, MSCI, Spillovers, Networks  
JEL Classification: C32 G15 F36 F42

Executive Summary

I. Introduction

II. How Does Institutional Quality Matter for Trade Costs?

III. Empirical Model and Data
1. Country Level
2. Industry Level
3. Trade Costs Measure
4. Data

IV. Estimation Results
1. Country Level
2. Industry Level

V. Robustness Check 
1. Alternative Samples
2. Alternative Measure of Trade Costs

VI. Summary and Concluding Remarks

References

Appendix

Earlier works derive empirical implications that institutional quality is very influential as a source of comparative advantage in industries requiring relationship-specific investment from the supplier. However, as earlier studies focus on investigating the impact of institution on the efficiency of the producer, only the exporter’s institution is considered. In contrast, we attempt to identify the impacts of the quality of institution, of both exporters and importers, on trade costs, that are different across country-pairs. To check the problem of measuring trade costs, we use two alternative measures of trade costs, i.e. CIF/FOB ratio and the relative measure of trade costs proposed by Novy (2013). Using the Eora global supply chain database covering 187 countries for 11 primary and manufacturing industries and four years, 2000, 2005, 2010 and 2015, we calculate a CIF/FOB ratio and the relative trade costs suggested by Novy (2013) which are used as a proxy variable for trade costs. At the country level, we find that the institutional quality of exporter and importer is negatively associated with trade costs and trade costs increase as disparity between two countries’ institutional quality increases. At the country-industry level, we find that a country-pair with better legal institution has lower trade costs in industries for which a hold-up problem is important. This result is robust to the alternative measure of trade costs suggested by Novy (2013). However, an analysis on the impact of institutional differences on trade costs yields mixed results. Therefore we do not conclude that the similarity of institutional quality between two countries is associated with lower bilateral trade costs. 

Keywords: Trade Cost, Institutions, Comparative Advantage
JEL Classification: F14, F20
 

  North Korea has been recently concentrating all its efforts into economic development, changing its economic strategies and appointing new personnel to key positions. The North convened the Party Conference of the Central Committee of the Workers’ Party of Korea on April 21th, 2018 and proclaimed the completion of two long-time commitments (the parallel pursuit of both economy and nuclear armed forces), and proposed the intensive strategy of constructing an economically powerful socialist state. In 2019, Chairman Kim Jong-un stressed once again the denuclearization of the Korean Peninsula and the construction of a socialist economy in his new year’s address for 2019. In addition, former Prime Minister Park Bong-ju, an official who served as prime minister for a lengthy period of time (June 2013 – April 2019) since Chairman Kim became leader of the country, has been found to be leading the “7.1 Improvement Measures for Economic Management” announced on July 1, 2001. Such a series of measures is raising hopes that North Korea is moving toward a transition of its economic system.
   Most people associate the transition of North Korea with the Vietnamese or Chinese experience of reform and opening. This is because not only was it reported how Kim Jong-Un has informally mentioned the Vietnamese reform and opening, but also an impression has been given that economic delegations of North Korea were learning about Chinese reform and opening by inspecting the special zones of China. However, there is no guarantee that North Korea will necessarily undertake either a Vietnamese or Chinese path of reform and opening, and therefore it will be difficult to claim the North will achieve the economic performance Vietnam and China have achieved. After all, many countries have faced socio-economic turmoil following such a major transition.
   The purpose of this study is to derive implications to North Korea from Myanmar's experiences of normalizing foreign relations and transition. The internal and external situations Myanmar have faced in the transition process share similar aspects with those currently in North Korea. After being sanctioned by the US and EU, Myanmar eventually lifted these sanctions by normalizing its relations with the US and actively introducing market economy systems. However, contrary to expectations that this measure would bring about Myanmar’s economic growth, Myanmar's GDP growth rate remains relatively low compared to that of China and Vietnam. The Myanmar experience may be a valuable lesson for North Korea.
   To explain the contents of this report in more detail, Chapter 2 compares the political and economic situation of Myanmar to those in North Korea and Southeast Asian countries. Myanmar is mentioned as a country which has peacefully established democracy in the international community, but at the same time it has been criticized that the introduction of democracy is only a formality that falls short of substantive democracy. Myanmar, along with Cambodia, Laos and Vietnam (CLMV), is classified as a Southeast Asian Transition Country and evaluated as having an economic environment similar to that of North Korea. Its GDP (2017) is 70 billion dollars – 0.3 times of Vietnam, 2.4 times of North Korea, 3.4 times of Cambodia and 4.3 times of Laos. The nation’s trade volume (2018) is 37.1 billion dollars, similar to Cambodia (31.7 billion dollars), but larger than Laos (12.8 billion dollars) and North Korea (5.7 billion dollars). Myanmar's business environment ranked 171 out of 190 countries in terms of Doing Business, receiving a lower evaluation than Vietnam in 69th place, Cambodia in 138th place and Laos in 154th place.
   Chapter 3 analyzes the contents of the US and EU bilateral sanctions imposed on Myanmar and the effects that economic sanctions have had on Myanmar's economy. Unlike North Korea, where multilateral and bilateral sanctions were imposed, only US and EU bilateral sanctions were imposed on Myanmar. When we look at US sanctions against Myanmar, there are sanctions on trade, finance, investment, aid, and visas. The trade sanctions began with the discontinuance of most- favored-nation treatment and eventually led to bans on imports of Myanmar products. Financial sanctions banned financial transactions with Myanmar and froze assets. Investment sanctions prohibited new investments in Myanmar, aid sanctions restricted bilateral assistance to Myanmar as well as multilateral assistance through international organizations, and visa sanctions took the form of restrictions on US visas for individuals and organizations. We can see that the EU's economic sanctions were carried out in a similar way with the United States.
   Although the sanctions did not affect Myanmar’s economy in quantitative terms, they had negative effects restricting the general process of industrialization in terms of quality. During the sanctions period, Myanmar recorded a positive GDP growth rate, and trade volume continued to expand. The first reason that the sanctions did not have a big impact on Myanmar's economy is that Myanmar has abundant energy and mineral resources, which could offset the US and EU trade restrictions by increasing their exports. In addition, the main economic sector of Myanmar is agriculture, so the economic scope in which economic sanctions on trade, finance, investment could influence the economy was limited. Second, the US and the EU tried to impose economic damages on Myanmar's military through economic sanctions, but it was the garment industry in the private sector that was mainly affected by the sanctions. During the sanctions period, the military halved the damage by developing the energy and mineral fields, which were given exceptions to the sanctions. Nonetheless, economic sanctions against Myanmar have resulted in Myanmar's macroeconomic economy remaining in primary industries such as energy and minerals, and hampered industrial advances in the manufacturing sector.
   In Chapter 4, we analyzed the process of lifting the sanctions and the changes in Myanmar's economy around that time. Domestic factors that could be lifted quickly were the willingness to reform Myanmar's democracy and the diversification of foreign policy. Among the external factors involved, the change in US policy in Asia and its measures to check the expansion of Chinese influence played a major role. The reasons that the sanctions were lifted quickly were mainly due to the Myanmar military’s willingness to democratize its political system and diversify its foreign policy. The United States has changed its policy toward Asia, and its efforts to check the expansion of China has also played a major role. The lifting of US sanctions against Myanmar progressed in a phased manner, beginning with preemptive measures by Myanmar, followed by US’s suspension of its sanctions, additional measures carried out by Myanmar, and additional suspensions on the part of the US. Recently, the issue of human rights in ethnic minorities has been rekindled, and the EU is discussing the resumption of sanctions against Myanmar.
   Myanmar's economy has been steadily growing since the sanctions were lifted, but it has been confirmed that there has been no rapid growth in GDP. According to our findings, the major causes for this lack of growth include the following: (1) lack of skilled human resources, (2) inefficient resource allocation, (3) failure of reform policies (lack of government capacity), (4) poor infrastructure, and (5) the failure of balanced diplomacy between the US and China. Prices have stabilized since 2009, and the exchange rate has been rising rapidly since 2012. The country’s trade volume has been growing steadily, but its deficit in commodity balance has been gradually deteriorating. FDI has been growing in absolute terms, but FDI-to-GDP ratio has remained at a low level among the CLVM countries.
   In Chapter 5, we summarize the implications of Myanmar’s experience for North Korea. First, there are implications for North Korea that the Myanmar sanctions were lifted quickly over five years (2012–16). Myanmar has the desire to contain the excessive expansion of China's influence in its country, while the United States wishes to control the expansion of China's influence in the region at the same time. These common interests led to the sanctions against Myanmar being lifted in a short period of time. North Korea seems to have a geopolitical environment similar to Myanmar, and this environment is likely to be used in the process of denuclearization and lifting sanctions.
   Second, Myanmar and the United States were able to build mutual trust by adopting a step-by-step process of lifting sanctions. North Korea faces more complicated situations than Myanmar because there are multilateral, bilateral sanctions, secondary boycotts against the North and denuclearization and human rights issues are combined as justifications of the sanctions. However, considering the fact that the United States is leading the sanctions against North Korea and that the human rights issue can be settled relatively easily in comparison with the denuclearization problem, it seems that there is room for lifting sanctions against North Korea in a similar way to Myanmar.
   Third, economic sanctions on Myanmar seem to have had little impact on Myanmar's economy in terms of quantity, but they have adversely affected Myanmar's economy in qualitative terms in that they weakened Myanmar’s growth potential. Myanmar's economy continued to grow in quantitative terms during the period of sanctions, but the sanctions have made the industries of Myanmar lean too much towards the energy and minerals industries. If sanctions against North Korea are prolonged, the growth potential of North Korea will weaken and its industry structure will inevitably remain underdeveloped.
   Fourth, Myanmar has failed to show remarkable economic performance in the process of transition, because it could not sufficiently enact laws and institutions to support this momentum, nor have the laws enacted been implemented properly. There is a lack of trained skilled bureaucrats to lead the transition. North Korea also needs to develop sufficient human resources to prepare for reform, and it must improve and implement laws and systems that meet international standards.
   Finally, Myanmar has not effectively utilized the high expectations of major countries such as Japan and China, which have shown interest in investing in Myanmar during its economic opening process. As North Korea also focuses on the self-sufficiency of its economy in their policies, it is likely that the North will miss such opportunities from outside like the experience of Myanmar. Therefore, in the process of opening up the economy, North Korea needs to abolish its former practices and actively attract investment from major countries.