Title | Publication of Policy Report on "Geoeconomic Risks Facing Korea" | Hist | 793 |
---|---|---|---|
Publication | 2023-04-24 | ||
Project |
□The Institute for Future Strategy judged that the international political and economic order surrounding the Korean peninsula is currently at an inflection point, comprehensively analyzed the geopolitical risks and economic ramifications that the Republic of Korea may face in the next 2~3 years, and proposed Korea's countermeasures.
- If Russia, China, and North Korea jointly subsidize, the Korean peninsula may become a disputed area.
□ Regarding the above geopolitical challenges and risks, this report specifically suggests the ROK Government's response plan
- As geopolitical risks around the Korean peninsula are linked and can have complex effects, the ROK Government's countermeasures should be comprehensive.
- Assume multiple scenarios, including worst-case scenarios, and prepare countermeasures for each.
□ The report also emphasized the need for the Korean economy to prepare for the worst-case scenario. In the context of a growing geopolitical crisis, it is necessary to consider the possibility of a series of corporate bankruptcies and a "perfect storm" in which the financial system is shaken as a result.
□ The Institute for Future Strategy has formed an emergency task force to prepare this report. It was conducted in a multidisciplinary manner with the participation of not only professors of various majors at Seoul National University, but also former high-ranking officials in the fields of foreign affairs and economics.
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- This report aims to contribute to the formulation of government policy by analyzing the challenges emanating from the United States and the risks of China, Russia, and North Korea, and suggesting the most likely and worst-case scenarios.
- In the case of the United States, it is highly likely that a scenario of continued US-China competition will develop depending on the strategic engagement with China, which will lead to continued conflicts over economic interests with allies and a weakening of priorities on the North Korea issue. Domestic political polarization in the United States is also a challenge to the United States.
- In China, there is a risk of elite politics as President Xi Jinping consolidates power. To justify Xi's strong leadership, China may seek to expand its sense of crisis and security discourse and influence externally, as it sets up internal and external enemies.
- However, if the war in Ukraine continues for 2~3 years, Russia may be forced to negotiate due to its weakened economic durability.
- If Russia, China, and North Korea jointly subsidize, the Korean peninsula may become a disputed area.
- In the case of North Korea, the most likely scenario in 2023 is that North Korea avoids decisive provocations, such as nuclear tests, while intensifying other military provocations
- The worst-case scenario in the next 2~3 years could start with a nuclear test by North Korea, and the probability of this is estimated to be 35%.
- North Korea's nuclear test may have a ripple effect depending on geopolitical and economic conditions.
□ Regarding the above geopolitical challenges and risks, this report specifically suggests the ROK Government's response plan
- As geopolitical risks around the Korean peninsula are linked and can have complex effects, the ROK Government's countermeasures should be comprehensive.
- Assume multiple scenarios, including worst-case scenarios, and prepare countermeasures for each.
□ The report also emphasized the need for the Korean economy to prepare for the worst-case scenario. In the context of a growing geopolitical crisis, it is necessary to consider the possibility of a series of corporate bankruptcies and a "perfect storm" in which the financial system is shaken as a result.
- In the United States, there has been a bank run for the first time in 15 years, and three large regional banks have failed in a row. There were also signs that the uncertainty in the U.S. financial markets could spread to Europe.
- Depending on the economic zone, it is important to pay attention to tail risks, such as uncertainty about the sustainability of Abenomics in Japan and real estate contraction and debt in China.
□ The Institute for Future Strategy has formed an emergency task force to prepare this report. It was conducted in a multidisciplinary manner with the participation of not only professors of various majors at Seoul National University, but also former high-ranking officials in the fields of foreign affairs and economics.
- Kim Byung-yeon, Director of the Institute for Future Strategy at Seoul National University (Professor, Faculty of Economics), Sohn In-joo, Vice Director of the Institute for Future Strategy(Political Science and International Relations), and Professor Jeon Jae-sung, Professor of the Department of Political Science and International Relations, Kim Hyung-jin, Senior Researcher at the Institute for National Security (Former Second Deputy Director of the National Security Agency), Kim Yong-beom, Former Vice Minister of Strategy and Finance, and Ahn Do-geol, Senior Researcher at the Institute of Strategy and Finance (Former Vice Minister of Strategy and Finance) participated in the event.
- For reference, South Korea's mid- to long-term security, diplomacy, and economic strategies are currently being studied by the Institute for Future Strategy's "World Order Change and Future Cluster on the Korean Peninsula."
Seoul National University Institute for Future Strategy 1st Anniversary Dialogue
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