Sang-Yong Nam Memorial Lecture: Korean Economy at a Crossroads: Aging, China & North Korea

In the last sixty years since the end of the Korean War in 1953, South Korea has transformed itself from war-devastated ruins to a prosperous and reasonably functioning democracy. This great achievement of Korea can be attributed to several factors. In the aftermath of the war, a market economy and a democratic political system were put in place. With respect to economic policy, successful industrialization in the 1970s and 1980s was followed by a timely opening up of the economy around 1990. Also, the year 1987 was the turning point in history when Korean democracy began to be established in earnest, unlocking its potential for a civil and innovative society. These institutions, combined with a people driven by norms that highly valued education and a strong work ethic, led to a miraculous economic achievement. Six years’ continued prosperity and success, however, breeds seeds of failure. The economy is slowing down, social cleavages are widening, the public sector is becoming bigger but more inefficient, and entrenched interest groups are blocking reforms in many areas. South Korea could enter a period of sustained stagnation similar to what Japan has experienced in the last two decades. Yet, internal and external challenges facing Korea in the next fifteen years are daunting. Why fifteen years? First, around 2027, 20% of the Korean population is expected to be age 65 or older. Second, Chinese economic power is likely to be on par with the U.S. around 2017. Currently Korea is highly dependent on Chinese economy but relying on the security alliance with the United States. On top of these challenges, the future of North Korea is highly uncertain. What should South Korea do now to meet these triple challenges lying ahead in the next fifteen years?

JUNG Ku-Hyun has taught at Yonsei University’s School of Business from 1978 to 2002 and served as Director of the Institute of East and West Studies and the Dean of the Graduate School of Business Administration at the same university. In 2003, he moved to Samsung Group to serve as the President and CEO of Samsung Economic Research Institute and has contributed to the upgrading and internationalization of the Institute. Dr. Jung joined the College of Business at KAIST in 2011 as a visiting professor, and he is also currently serving in three non-profit organizations; President of the Seoul Forum for International Affairs, Chairman of the Center for Free Economy and Board Chair of Gyeonggi Research Institute. His academic interests include corporate strategy, business ecosystem, economic institutions and globalization. Graduated from Seoul National University with B.A. and completed graduate studies at the University of Michigan with Ph.D.