Korean Patriotism and Economic Success
Why Not Magazine Interview with H.E. Ambassador Young-ha Lee
Korea has followed effective measures to combat the global economic recession, which has impacted most countries in the world. This is not surprising for a country that has successfully built one of strongest economies in the world over the past few decades.
In late December of 2009, we interviewed H.E. Ambassador Young-ha Lee, on the topic of the Korean economy and the recent global economic downturn. Mr. Lee, a highly recognized military chief, lately retired as Vice Chief of Staff after a long career in the Republic of Korea Air Force. Recently, he was assigned as an ambassador of Korea in the country of Lebanon.
1) In your opinion, to what extent has the global recession affected Korea?
The ongoing global financial turmoil, which originated from the US sub-prime mortgage credit crunch, is causing concern over the global economic downturn. Financial market uncertainties have been aggravated and are exerting a knock-on impact on the real economy, resulting in slowing domestic demand and investment. I think that the Republic of Korea is not exceptional and is heavily affected by the global financial crisis. However, I am sure that they have made a good approach to deal with the global economic crisis.
2) What kind of economic policies are followed in such an environment as Korea to fight off recession?
Against this background, the Korean government has taken very active economic policy measures to cope with these unprecedented challenges by announcing preemptive, decisive and sufficient counter-measures. In response to the economic crisis, the government adopted expansionary fiscal policies. The total fiscal stimulus package amounted to nearly $12 billion dollars, including $9.3 billion dollars on public expenditures, and $2.5 billion dollars on tax reductions. In addition, the Korean government expanded public expenditures by $9.3 billion dollars to support low income class and local economies, out of which $3.9 billion dollars will be invested in SOC projects. Furthermore, early in January of year 2009, Korea launched the Green New Deal policy as part of the efforts to put the new national vision of Low Carbon Green Growth into action.
3) In your opinion, what are the right solutions?
In comparison to other countries, Korea thus far has promptly and effectively responded and dealt with the negative impact of the global economic crisis. As a result, Korea was the only OECD member state that registered positive growth in the first quarter of 2009 and showed signs of rapid recovery in the second quarter. Mr. Gurria, Secretary-General of the OECD, told an audience at the third OECD World Forum at BEXCO in Busan in October 2009 that Korea has achieved one of the earliest and strongest recoveries in the OECD area. Led by exports, fiscal policy and a sustained pick-up in exports, Korea is projected to help boost output with a rebound in domestic demand and a marked fall in unemployment in 2011. Moreover, the OECD projects the Korean economy to contract 2.2 percent in 2009, and turn into a 3.5 percent growth in 2010. So, I believe that the policy taken by the Korean government is working in the right direction. A positive growth may be possible for the whole year of 2009.
4) What are your thoughts about the recent Free Trade Agreement between the EU and South Korea?
As you know well, the comprehensive free trade agreement was finalized between Korea and the European Union in July 2009 and both sides managed to initialize the deal on October 15 in Brussels. I think this balanced FTA is win-win for both the EU and Korea. The FTA will be the EU’s key to securing a strong foothold on Asia as the EU’s first FTA with an Asian country. Also, it will benefit such sectors as shipbuilding, automobiles and auto parts for Korea.
5) What kind of business relations exist between the US and South Korea and how do you see this relationship helping both sides?
The Republic of Korea is maintaining an excellent relationship with the US as a close ally of many decades. Currently, the two states cooperated for the creative development of the bilateral relationship in manifold ways. Korea is America’s seventh largest trading partner. Last year, two-way trade in goods alone totaled $83 billion dollars, and that’s on top of $20 billion more in services trade. The main business area is automobiles, semi-conductors and wireless telecommunications. In particular, the FTA between the two countries was concluded on April 2, 2007 after ten official rounds of negotiations. Korea and the US signed the KORUS FTA on June 30, 2007 in Washington D.C. The Korean government is making its best efforts for an early ratification and entry into force of the KORUA FTA. Moreover, for the first time since his inauguration, President Barack Obama visited Korea on November 18 at the invitation of President Lee Myung-bak. In their summit, the two presidents discussed ways to further advances the future-oriented Korea-US alliance, as well as how to deepen and expand friendly and cooperative ties between the two countries. In addition, they had in-depth discussions on other global issues, including the North Korean nuclear problem, nonproliferation and counter-terrorism and how to overcome the worldwide financial crisis and cope with climate change. I firmly believe that the existing relations between the two countries will be more enhanced in the future.
6) From your point of view, what are the main reasons behind the global recession? Is it due to wars/political instability in the world, or to economic policies, or is it because of wrong political policies?
As I mentioned, it seems that the global financial crisis originated from the US sub-prime mortgage credit crunch. In this regard, financial market uncertainties have been aggravated and are influencing the real economy, resulting in slowing domestic demand and investment. I believe that in the coming year, close international cooperation will lead to overcoming the global recession in the framework of the G-20 Summit.
As a host country of G-20 summit in November 2010, the Republic of Korea will play a leading role in building a stronger, more balanced global economy, reforming the financial system and lifting the lives of the poorest.
7) What were the main reasons behind the famous rise of the Korean economy?
Like Lebanon, Korea is a small country without resources such as oil. That’s why Korea has pursued export-led growth for many decades. We need more efforts to survive in this competitive world. I am sure that the endless efforts by the government and peoples’ diligence led to today’s Korea.
In this regard, the long success of high-valued, added industries like electronics, semi-conductors, automobiles and shipbuilding in the world make Korea rank 13th in the world in terms of GDP volume.
Korea has always been searching for new ways to address the challenges surrounding the global economy. In particular, in the late 1990s, Korea was hit by a financial crisis. At that time, with built-in exit strategies with clear time frames, the Korean government took bold and decisive measures, rather than incremental ones, to regain market confidence. This decision led to a successful recovery from the crisis. Furthermore, faced with the current global recession, the Korean government is actively seeking a “Low Carbon Green Growth” policy, which stresses the importance of a nurturing environment and friendly industry to deal with climate change.
Along with this, I believe that human resources are very critical in attaining the goal of economic growth. In this connection, I do not have any doubt about Lebanon’s [Middle East] future potential considering its human resources, which command at least three languages.
8) What lessons can we learn from it?
A small country cannot survive in this globalized world with protectionism. For example, small but advanced economies in countries like the Netherlands and Luxemburg have depended not on protectionism, but on openness for their economic development.
In this regard, Korea has always championed for openness, rejecting all forms of financial protectionism. The bitterness during economic reforms for the past few years has led to an enjoyment of the current economic growth. The importance of openness will be a good lesson for the region.
9) Given your post as an Ambassador of Korea in the country of Lebanon, how do you see the latter’s economy in the future?
The stumbling blocks to Lebanon’s economy have always been [related to the] volatile political situation in Lebanon. However, as you know well, the new national unity government has been officially launched after the vote of confidence on December 10th in the Parliament.
The domestic stability will ultimately contribute to the resilience of the Lebanese economy in the future. According to the EIU report in October 2009, Lebanon will enjoy economic growth of 4.9% in 2010 and 4.6% in 2011.
I am sure that Lebanon will get back on the right track in the near future considering its potential in this region.
10) What is the current state of cultural and social interactions between Korea and Lebanon and do you have plans to encourage more Korean tourists to visit Lebanon?
The Embassy of the Republic of Korea is an active embassy, strengthening cultural relations with Lebanon. The Korean Government via the Embassy is providing yearly scholarships to Lebanese students. Moreover, we have organized very successful cultural events, especially last October, such as the Korea Movie Festival and the Korean Taekwondo Performance.
In particular, on December 6, 2009, the diplomats of the Korean Embassy (including myself) took part in the Beirut International marathon and set up a booth promoting Korea. We even wore special t-shirt representing the Koreans!
In the mean time, last year, the Korean Government formed the Korean Arab Society (KAS) to further improve the relations and cultural exchanges with the Arab World. In this regard, I will be very keen on implementing my government’s strategy for the overall wellbeing of our nations.
Moreover, given that the year 2011 will mark the 30th anniversary of the establishment of diplomatic relations between the two nations, the Embassy will plan on organizing many more cultural and social activities in the coming years.
In late December of 2009, we interviewed H.E. Ambassador Young-ha Lee, on the topic of the Korean economy and the recent global economic downturn. Mr. Lee, a highly recognized military chief, lately retired as Vice Chief of Staff after a long career in the Republic of Korea Air Force. Recently, he was assigned as an ambassador of Korea in the country of Lebanon.
1) In your opinion, to what extent has the global recession affected Korea?
The ongoing global financial turmoil, which originated from the US sub-prime mortgage credit crunch, is causing concern over the global economic downturn. Financial market uncertainties have been aggravated and are exerting a knock-on impact on the real economy, resulting in slowing domestic demand and investment. I think that the Republic of Korea is not exceptional and is heavily affected by the global financial crisis. However, I am sure that they have made a good approach to deal with the global economic crisis.
2) What kind of economic policies are followed in such an environment as Korea to fight off recession?
Against this background, the Korean government has taken very active economic policy measures to cope with these unprecedented challenges by announcing preemptive, decisive and sufficient counter-measures. In response to the economic crisis, the government adopted expansionary fiscal policies. The total fiscal stimulus package amounted to nearly $12 billion dollars, including $9.3 billion dollars on public expenditures, and $2.5 billion dollars on tax reductions. In addition, the Korean government expanded public expenditures by $9.3 billion dollars to support low income class and local economies, out of which $3.9 billion dollars will be invested in SOC projects. Furthermore, early in January of year 2009, Korea launched the Green New Deal policy as part of the efforts to put the new national vision of Low Carbon Green Growth into action.
3) In your opinion, what are the right solutions?
In comparison to other countries, Korea thus far has promptly and effectively responded and dealt with the negative impact of the global economic crisis. As a result, Korea was the only OECD member state that registered positive growth in the first quarter of 2009 and showed signs of rapid recovery in the second quarter. Mr. Gurria, Secretary-General of the OECD, told an audience at the third OECD World Forum at BEXCO in Busan in October 2009 that Korea has achieved one of the earliest and strongest recoveries in the OECD area. Led by exports, fiscal policy and a sustained pick-up in exports, Korea is projected to help boost output with a rebound in domestic demand and a marked fall in unemployment in 2011. Moreover, the OECD projects the Korean economy to contract 2.2 percent in 2009, and turn into a 3.5 percent growth in 2010. So, I believe that the policy taken by the Korean government is working in the right direction. A positive growth may be possible for the whole year of 2009.
4) What are your thoughts about the recent Free Trade Agreement between the EU and South Korea?
As you know well, the comprehensive free trade agreement was finalized between Korea and the European Union in July 2009 and both sides managed to initialize the deal on October 15 in Brussels. I think this balanced FTA is win-win for both the EU and Korea. The FTA will be the EU’s key to securing a strong foothold on Asia as the EU’s first FTA with an Asian country. Also, it will benefit such sectors as shipbuilding, automobiles and auto parts for Korea.
5) What kind of business relations exist between the US and South Korea and how do you see this relationship helping both sides?
The Republic of Korea is maintaining an excellent relationship with the US as a close ally of many decades. Currently, the two states cooperated for the creative development of the bilateral relationship in manifold ways. Korea is America’s seventh largest trading partner. Last year, two-way trade in goods alone totaled $83 billion dollars, and that’s on top of $20 billion more in services trade. The main business area is automobiles, semi-conductors and wireless telecommunications. In particular, the FTA between the two countries was concluded on April 2, 2007 after ten official rounds of negotiations. Korea and the US signed the KORUS FTA on June 30, 2007 in Washington D.C. The Korean government is making its best efforts for an early ratification and entry into force of the KORUA FTA. Moreover, for the first time since his inauguration, President Barack Obama visited Korea on November 18 at the invitation of President Lee Myung-bak. In their summit, the two presidents discussed ways to further advances the future-oriented Korea-US alliance, as well as how to deepen and expand friendly and cooperative ties between the two countries. In addition, they had in-depth discussions on other global issues, including the North Korean nuclear problem, nonproliferation and counter-terrorism and how to overcome the worldwide financial crisis and cope with climate change. I firmly believe that the existing relations between the two countries will be more enhanced in the future.
6) From your point of view, what are the main reasons behind the global recession? Is it due to wars/political instability in the world, or to economic policies, or is it because of wrong political policies?
As I mentioned, it seems that the global financial crisis originated from the US sub-prime mortgage credit crunch. In this regard, financial market uncertainties have been aggravated and are influencing the real economy, resulting in slowing domestic demand and investment. I believe that in the coming year, close international cooperation will lead to overcoming the global recession in the framework of the G-20 Summit.
As a host country of G-20 summit in November 2010, the Republic of Korea will play a leading role in building a stronger, more balanced global economy, reforming the financial system and lifting the lives of the poorest.
7) What were the main reasons behind the famous rise of the Korean economy?
Like Lebanon, Korea is a small country without resources such as oil. That’s why Korea has pursued export-led growth for many decades. We need more efforts to survive in this competitive world. I am sure that the endless efforts by the government and peoples’ diligence led to today’s Korea.
In this regard, the long success of high-valued, added industries like electronics, semi-conductors, automobiles and shipbuilding in the world make Korea rank 13th in the world in terms of GDP volume.
Korea has always been searching for new ways to address the challenges surrounding the global economy. In particular, in the late 1990s, Korea was hit by a financial crisis. At that time, with built-in exit strategies with clear time frames, the Korean government took bold and decisive measures, rather than incremental ones, to regain market confidence. This decision led to a successful recovery from the crisis. Furthermore, faced with the current global recession, the Korean government is actively seeking a “Low Carbon Green Growth” policy, which stresses the importance of a nurturing environment and friendly industry to deal with climate change.
Along with this, I believe that human resources are very critical in attaining the goal of economic growth. In this connection, I do not have any doubt about Lebanon’s [Middle East] future potential considering its human resources, which command at least three languages.
8) What lessons can we learn from it?
A small country cannot survive in this globalized world with protectionism. For example, small but advanced economies in countries like the Netherlands and Luxemburg have depended not on protectionism, but on openness for their economic development.
In this regard, Korea has always championed for openness, rejecting all forms of financial protectionism. The bitterness during economic reforms for the past few years has led to an enjoyment of the current economic growth. The importance of openness will be a good lesson for the region.
9) Given your post as an Ambassador of Korea in the country of Lebanon, how do you see the latter’s economy in the future?
The stumbling blocks to Lebanon’s economy have always been [related to the] volatile political situation in Lebanon. However, as you know well, the new national unity government has been officially launched after the vote of confidence on December 10th in the Parliament.
The domestic stability will ultimately contribute to the resilience of the Lebanese economy in the future. According to the EIU report in October 2009, Lebanon will enjoy economic growth of 4.9% in 2010 and 4.6% in 2011.
I am sure that Lebanon will get back on the right track in the near future considering its potential in this region.
10) What is the current state of cultural and social interactions between Korea and Lebanon and do you have plans to encourage more Korean tourists to visit Lebanon?
The Embassy of the Republic of Korea is an active embassy, strengthening cultural relations with Lebanon. The Korean Government via the Embassy is providing yearly scholarships to Lebanese students. Moreover, we have organized very successful cultural events, especially last October, such as the Korea Movie Festival and the Korean Taekwondo Performance.
In particular, on December 6, 2009, the diplomats of the Korean Embassy (including myself) took part in the Beirut International marathon and set up a booth promoting Korea. We even wore special t-shirt representing the Koreans!
In the mean time, last year, the Korean Government formed the Korean Arab Society (KAS) to further improve the relations and cultural exchanges with the Arab World. In this regard, I will be very keen on implementing my government’s strategy for the overall wellbeing of our nations.
Moreover, given that the year 2011 will mark the 30th anniversary of the establishment of diplomatic relations between the two nations, the Embassy will plan on organizing many more cultural and social activities in the coming years.