Current Korea

ASEAN,
a New Boost to Economy

“I believe in the boundless potential and united strength of ASEAN. I have a firm vision of
creating a people-centered community of peace and prosperity together with ASEAN.
The New Southern Policy was the expression of Korea’s strong determination
to prosper together with ASEAN.”

- President Moon Jae-in’s speech at the 20th Korea-ASEAN Summit, Nov. 14 -

Written by Sohn Ji-ae

President Moon Jae-in poses for photos with ASEAN leaders at the 20th ASEAN-ROK Summit at Suntec Singapore Convention Center on Nov. 14. © Yonhap News

New Southern Policy as a Way Out

A sense of uncertainty prevails across world economy with growing protectionism and ongoing trade conflicts, as in the ones between the U.S. and China. These uncertainties and challenges leave a government in a position where it must now rethink its economic strategies.

Korea has been able to rise from the ashes of war and grow into one of the world’s economic powerhouses over the past years, as it actively engaged in transactions with world powers, like the U.S., China, Japan and Russia.

As the nation is also stuck in the prevailing economic gridlock that has withered world economy, President Moon Jae-in now strives to deepen ties with other new markets of higher potential as a way out, while he seeks to curb the nation’s heavy reliance on the traditional trading partners: Through the “New Southern Policy.”

The initiative, launched by his administration last year, aims to expand ties with ten Southeast Asia nations, or ASEAN. Recent efforts have seen some results over the past year, with the trade volume between Korea and ASEAN reaching USD 120 billion as of September this year, a six-percent increase year on year. The number of people travelling back and forth between Korea and ASEAN also increased by 17 percent to surpass 8 million. It’s a remarkable development achieved in such a short time span.

On the sidelines of the ASEAN Summit in Singapore, President Moon Jae-in holds a meeting with Prime Minister Thongloun Sisoulith of Laos, one of key partners for Korea’s New Southern Policy. © Yonhap News

ASEAN, a Promising Economic Partner for Korea

In order to keep the momentum going, President Moon made the most of his latest Singapore visit, where he attended the ASEAN Summit and held a series of talks with ASEAN leaders.

He voiced his ambition to accelerate the pace of ongoing economic cooperation between Korea and the region.

“Korea will work more closely together with ASEAN to achieve the goals of increasing bilateral trade to USD 200 billion and the number of people travelling back and forth to 15 million by 2020,” he said as he delivered an address at the ASEAN-ROK Summit.

Other positive developments were unfolded in Singapore, as well, when Korea agreed to push for bilateral free trade pacts with Indonesia and Malaysia, two key countries in his New Southern Policy initiative.

Another noticeable outcome is for Korea to host next year the ASEAN-Republic of Korea Commemorative Summit, followed by the first-ever Korea-Mekong Summit—which involves Cambodia, Laos, Myanmar, Vietnam, and Thailand. Hosting the first ASEAN and Mekong summits in Seoul is significant, as it will serve as an opportunity to talk about more specific and concrete measures to further develop the partnership.

In addition, the ten ASEAN member states and six Asia-Pacific countries—Korea, Japan, China, India, Australia and New Zealand—agreed to conclude a comprehensive and mutually beneficial the Regional Comprehensive Economic Partnership (RCEP) in 2019. This will open up more markets for goods, services, and investment in the regions.

New Economic Map

There is high hope and expectation that the implementation of the New Southern Policy will lay the foundation for the Moon Jae-in government—currently two years into office—realizing its economic map that it will pursue for a more sustainable and more prosperous growth during the remaining term.

One of the keywords for the incumbent government’s current economic agenda is “inclusiveness.” President Moon often mentioned this term when he said he would pursue economic measures aimed at “inclusive growth,” which embraces people from all walks of life so as to make a nation where every individual has a fair share of income. While in Singapore advocating the New Southern Policy, President Moon also used this term, as he meant to insist that world economy should be “inclusive,” accepting free trade, openness, multilateralism and co-prosperity.

More engagements between Korea and ASEAN are expected to be unveiled in due course in the years to come, as President Moon has since his inauguration firmly and unwaveringly pursued the New Southern Policy, along with the New Northern Policy aimed at strengthening business cooperation with the nation’s northern economies like Russia. He realized from the get-go how important the relationship with the ASEAN region has been and will be to the nation.

Next year marks the 30th anniversary of the establishment of Korea-ASEAN ties. Hopefully, the next 30 years will see as much prosperity between Korea and the region as both sides have enjoyed in the past three decades.