South Korea sets the sat nav to
2032 By Ronan Thomas
LONDON - "The universe is not only
stranger than we suppose, it is stranger than we
can suppose". These words, attributed to noted
British scientist JBS Haldane (1892-1964) also
have sharp resonance today on the Korean
peninsula.
Next month, South Koreans head
to the polls in the nation's 18th presidential
election. Conservative Saenuri Party candidate
Park Guen-Hye (odds-on favorite) faces off against
leftist Moon Jae-in (Democratic United Party). The
third candidate, software entrepreneur Ahn
Chul-soo (independent), pulled out on November 23
to avoid splitting the liberal vote. On December
19, South Korean voters will determine the future
of the country's highest political figurehead
until 2017.
Predicting South Korea's
longer-term economic and geopolitical
future - say 20 years
from now - is a different matter. Such crystal
ball-gazing, an inexact science by definition, is
either an exercise viewed through a distant mirror
at best or an exercise in futility at worst.
Yet it's just the sort of dilemma that
professional futurologists, game theorists and
academics love to get their teeth into. On
November 17, at a major Korean symposium at London
University's School of Oriental and African
Studies (SOAS), a group of such soothsayers
modelled and presented scenarios on South Korea's
medium term future. Whoever becomes South Korean
president next month will find their conclusions
by turns encouraging and depressing.
At
the SOAS meeting, South Korean, American and
British academics and South Korean government
representatives jointly considered the shape of
things to come for South Korea by the 2030s. As is
normal at such gatherings - participants included
luminaries from Oxford, Cambridge as well as
American and Asian universities- predictions moved
from the plausible and mildly eclectic before
reaching the outer limits of extreme political and
country risk. The consensus: 20 years from now the
future for South Korea - as well as for its region
- will all be about "soft" versus "hard" landings.
Seoul's soft landing? First the
good news for South Korea, as envisaged by the
London crystal ball-gazers. Under a "soft landing"
scenario, the 2030s may well witness a golden age
for a country once regarded as among the poorest
in Asia but already in 2012 one of its richest. As
South Korea programmes its national Sat Nav for
the future this scenario appears eminently
possible. The signs are already encouraging. The
future does not loom for South Korea, it beckons.
With a history of rapid recovery from the
gruelling Korean War (1950-1953), South Korea
achieved her own economic miracle over 60 years to
become the 13th largest economy in the world
today. The South Korean economy weathered the IMF
crisis of 1997-1998 and the 2008 international
credit crunch to a degree not enjoyed in the
United States and Europe to put it mildly.
According to the latest South Korean Government
statistics the country is already a colossus of
information and digital technology, the most-wired
nation on earth offering the fastest broadband
speeds with deep international market share
penetration in consumer electronics, mobile
telephony and consumer white goods. South Korea's
traditional strengths established in the past 30
years - in automotive, shipbuilding and steel
production - continue to underwrite her current
buoyant economy
The benign statistics come
thick and fast in 2012. South Korea enjoyed an
average of 4% GDP growth during 2002-2012 (OECD)
and 3% in 2012 (The Economist). In June 2012 it
became the 7th nation on earth to enter the 20/50
Club (for nations achieving per capita income of
over US$20,000 per annum) to add to its existing
membership of the G20 and OECD Committee.
From 2013, for the first time in its
history, South Korea will assume non-permanent
membership of the United Nations Security Council.
Such things matter in the rarefied counsels of the
global policy-making elite.
In 2012, South
Korea's population of 50 million enjoys an
enviable unemployment rate of just 3.1% - the
lowest among the OECD countries - versus US and UK
headline rates of 7.9% and 7.8% respectively and
the Euro area's 11.6%. The nation set to become
the world's largest economy within a decade -
China - remains South Korea's largest single
export market. South Korean Research and
Development (R&D) - a key indicator of a
nation's ability to service future growth -
totaled some US$60 billion during 2007-2012, the
third highest amongst OECD countries (OECD and
South Korean government figures).
Today,
the South Korean government says it aggressively
pursues Clean Tech, environmental and business
policies designed to foster creativity and
innovation. 'Sustainable growth' is the current
buzzword among South Korean Ministry of Finance
and Economy officials.
Under the most
optimistic scenario for the 2030s South Korea
maintains or increases current economic growth
rates and reforms its educational system to foster
creativity and innovation to become a
world-beating leader. The arrival point is
intoxicating. 20 years from now South Korea hopes
to have revolutionized the global biotechnology
industry and set the industry standard for genetic
testing. It also hopes to become a lead exporter
of new green technologies such as fuel cells,
eco-expertise and LED manufactured technology to
East Asia and beyond. The futurologists' reasoning
goes that if China will likely bypass the United
States in the next decade to become the leading
economy on earth, then Korea has the same
potential to leapfrog Japan in its own nimble
shift.
Such economic confidence in 2012 is
also reinforced by unofficial surveys of South
Korean opinion which point to a widely-held
popular belief that economic success is made more
likely by Asian family values. Add in an
optimistic geo-political assumption of no (major)
military conflict with North Korea (DPRK) and even
peaceful Korean unification, agreed with China
along the German model, and South Korean academics
say they've seen the future and it works. It's a
model based on sustainable globalization but one
which also claims to avoid - as in China - the
current gap of inequality between South Korea's
richest and poorest.
The 'good' road to
the 2030s also envisages the successful
development of environmentally-friendly
urbanization in South Korea. The models here
include development of new cities along the lines
of the Songdo Industrial Business District, just
south of Incheon in western South Korea. This
showcase development, designed by an international
consortium of commercial architects and
engineering companies and linked to Incheon
International Airport by a stunning new road
bridge, permits a 15 minute commute to high tech,
green Songdo. If South Korea can develop
sustainably, the argument goes, with new
eco-cities funded by a dynamic digital and
biotechnology-focused economy, as well as
maintaining its current strengths in traditional
shipbuilding, green cars and consumer electronics,
Korea in 2032 will be in an enviable regional East
Asian and global position.
Harder
prospects So far so good. Now for the
possible downsides, the details of which will
shortly provide sobering new reading material for
the next inhabitant of the Blue House (South
Korea's smart Presidential residence in Seoul),
whoever wins the December 19 election. South Korea
is of course not immune from important challenges
to its current prosperity over the next 20 years.
The SOAS visionaries agree that if the
main physical risk to South Korea - military
conflict with the DPRK or its sudden collapse -
can be avoided then the main challenges to South
Korea over the next 30 years are geopolitical,
economic, demographic, and environmental.
Geo-politics If past experience
is any guide - scenario analysts are of course
divided on that one - South Korea will continue to
face on-going confrontation and provocation from
North Korea over the coming two decades. China's
realpolitik relationship with the DPRK will
continue as will the DPRK's on-going status as
useful Chinese buffer zone (versus US-backed South
Korea and Japan) and its utility as a coal
exporter to China's resource-hungry economy.
Seoul will continue to feel a comforting
US hand on its shoulder if the current 'Asia
Pivot' strategy of re-elected US President Obama
becomes long-term US State Department foreign
policy. But the potential for flash points between
North and South will remain potent. After North
Korea's missile test last April, the US announced
a deal with South Korea on ballistic missiles,
revising a previous security agreement and
increasing their effective range from 300 km to
800km (to include the whole of the North plus
southern China and Japan). It was a clear US/South
Korean statement of intent for the peninsula.
There may be strategic trouble over this in the
years ahead; certainly some form of North
Korean/Chinese reaction is likely just to save
face. Meanwhile, the prospect of US forces leaving
South Korea is not on the table on any but a
long-term timeline.
In the 20 years ahead,
current mainstream geopolitical scenarios for
Korea also predict depressing on-going friction
over the various in-shore maritime border disputes
between North and South Korea as well as low level
political animosities with Japan as part the
perennial Dokdo/Takeshima islets wrangle. Any new
Cheonan-style military incident, as seen in 2010,
will likely see more South/North sabre-rattling,
short of major escalation.
Economics Happy scenarios for
the state of South Korea's economy by the 2030s
make a major assumption. That is, that economic
growth maintains its steady upward progress on the
back of strong companies and technologies and
produces consumer goods the world wants to buy.
Yet 'sustainable growth', so much the mantra for
policymakers in Seoul in 2012, has never been a
given for any nation and can falter, fast. The
example which haunts South Korean economists today
is Japan, which has spent the last two decades in
relative economic stagnation and where the hot
electoral topic currently centers on whether
quantitative easing of the money supply can boost
inflation and get Japanese consumers spending
again. And if South Korean R & D is not kept
as a priority, hungry competitors in China, Japan,
Europe and the United States will surely fill the
gap.
Demography and national
identity South Korea - again like China -
also faces the deleterious effects of an aging
population and a low birth rate. Both are factors
likely to slow consumer demand in South Korea over
the coming decades. In its own 'grey shift' South
Korea in 2012 already has more voters over 50 than
40 (The Economist).
Changes in its
internal demographics also mean that, short of
unification with the North, South Korea may face
demands for growing immigration and embrace of a
wider multiculturalism in its society (a benefit
or a potential societal problem depending on one's
point of view). In 2007 there were around one
million residents of foreign origin in South
Korea, the majority citizens of Chinese-Korean
extraction or from other Asian countries. This
total is expected to rise to around 2% of the
South Korean population over the course of the
next 20 years (Cambridge University estimate,
2012). An impassioned internal debate on this, the
shift to greater welfareism and South Korea's
wider national identity - of ethnic homogeneity
versus multiculturalism - is already underway in
South Korea,
Another nagging question in
South Korea also centers on the rising potential
for social alienation when the 'good' technology
widespread in a world-beating digital economy
nevertheless fails to add to the sum of individual
happiness and leads instead to growing feelings of
personal isolation. South Korea will also have to
manage expectations here over the coming 20 years.
Yet, under the SOAS scenarios, the most
powerful threat to South Korea 20 years from now
will be environmental.
Environment In 2012 East Asia -
including China - accounts for a whopping 48% of
global CO2 emissions. These have increased over
decades by the use of cheap fossil fuels, regional
national drives for industrial growth and the
import of non-eco-friendly vehicles. Add in high
levels of factory pollution from China (sulfur
dioxide), desertification and the usual yellow
sand carried to the Korean peninsula by the wind
from the Gobi Desert (across northern China and
southern Mongolia) and South Korea's position
looks a lot less pretty. The nation sits - like
Japan - in the path of prevailing winds bearing
these and other atmospheric gifts from her
northern neighbor China. South Korean schools are
periodically forced to close due to such
pollution. What's more, Chinese pollution
discharged into the East China Sea inexorably
finds its way eastward across the Yellow Sea to
lap against South Korean harbor walls and beaches.
But the ecological threat does not just
come from China. Environmentalists (including the
Korea Federation for Environment Movement) also
charge their own country with being part of the
problem, given that it's the 8th largest CO2
emitter on the planet and pursues a host of
environmentally-unfriendly policies itself.
In the next 20 years, South Korea, along
with its neighbors China and Japan, will thus be
vulnerable to ecological degradation and potential
disaster, these green voices assert. Global
warming, the trend away from hydrocarbons, scarcer
commodities and rising sea levels are all
cumulative future problems for South Korea. If
pollution continues without adequate redress South
Korea may even face a major environmental crisis.
There are also nuclear issues. In November this
year two South Korean nuclear reactors at the
Yeonggwang Nuclear Power Plant in south west Korea
were shut down after safety fears, with the
expectation of inevitable power shortages across
South Korea this winter. Safe burial of nuclear
waste in South Korea remains another worry.
Seoul's response to such eco-hazards will
be a tricky balancing act in the years ahead. And
it may prove costly. If Korea does not get her own
house in order and apply green growth strategies,
International Climate Control Regime regulation
may weigh in zealously to limit emissions over the
next decades. This may act as a brake on the
nation's economic growth if it increases
production costs and may have knock-on effects on
both South Korean employment and on R & D
spend. According to Oxford University academic
Young-hae Chi, the only remedy will be to offset
pollution by major reforestation and by the use of
the carbon credit market in favor of China and
North Korea. On this view South Korea can steal a
serious march on competitors if it increases Clean
Development Mechanism (CDM) projects and carbon
credit offsetting with China and North Korea in
the next 20 years.
Whichever reality
prevails by the 2030s, the rising environmental
cost South Korea faces is a burden which is best
shared regionally. Yet such environmental
cooperation efforts mirror long-hoped for shifts
in East Asia toward regional economic and
political convergence not achieved thus far. From
the standpoint of 2012, or even 2032, it still
looks highly unlikely that any European-Union
style political and economic body for East Asia
and Korea will happen any time soon. Dreamers in
East Asia have been looking for such regional
political union for over a century but it remains
elusive. The shared political will simply does not
exist in the region.
Outer
limits Will JBS Haldane's famous dictum of
strange futures realized apply to South Korea two
decades from now? More off-the-wall scenarios for
South Korea - envisaged at SOAS and elsewhere -
abound. Their probability depends on one's
imaginative reach. They include:
As the
2030s begin a reforming leadership in the People's
Republic of China (PRC) withdraws support from
middle-aged North Korean leader Kim Jong-un and
puts pressure on him to agree to Korean
unification on the purely pragmatic grounds of
boosting its own regional trade. In much the same
way as former Soviet Union premier Mikhail
Gorbachev withdrew Soviet support from East German
leader Erich Honnecker in 1989, the DPRK soon
crumbles.
In the 2020s South Korea
reinvents itself as a "corporate republic" and
ditches norms of the nation state, on the back of
stellar performance by dozens more South Korean
biotechnology companies ascending the Fortune 500
table. In a world first, South Korea blazes a
trail for a new model polity not as a country but
as an global independent business entity which
just happens to be based in Korea.
The
heavily guarded Demilitarized Zone (DMZ), dividing
the Korean Peninsula at the 38th Parallel opens to
mass eco-tourism by mutual agreement between North
and South. Like South Africa's Kruger National
Park it becomes a world-renowned nature
reserve/theme park, earning hard currency for a
cash-strapped North by 2032 and softening
animosities between both nations.
The
worst environmental fears of both Koreas are
realized. Seoul's Han River breaks its banks after
an unprecedented water level rise. The entire city
floods. The world is further shocked when Baekdu
Mountain, on North Korea's border with China,
suddenly erupts to devastating regional effect.
Baekdu is assessed by some scientists in 2012 as a
not-so-dormant volcano with catastrophic
potential.
For scenario analysts stranger
things have happened in history.
Ronan Thomas is a British
correspondent. He has reported on North East Asia
and South Korea since 1995.
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