High Tech and Educated Labor Force Will Take Korea to the Top in the Next Decade

Recently, Asia-Pacific Business and Technology Report caught up with Roh Chul-rae, the floor leader of the Pro-Park Geun-hye Alliance, a political party founded in 2007, comprised of Hannaradang party members who support representative Park Geun-hae. Here are excerpts from the interview.  

Question: Despite the serious global economic downturn, the Korean economy has emerged mostly unscathed from this crisis. Can you let us know what the main reason for this is? What is the economic and business outlook in the next five to 10 years?

Answer: Though the international economy and trade volume were damaged by the world's economic downturn, as well as the international balance of trade, it doesn't mean that a country's technology will disappear. Technology-intensive industry in Korea has been the major reason why the Korean economy wasn't impacted harshly by the world recession. Also, South Korea has previously gone through the IMF crisis. As there is a saying that "beating steel makes the steel harder, "our economy has already been vaccinated from the economic depression.

So this is why I think that the South Korean economy wasn't hit hard by the world's economic depression. Also, we had a fundamentally self-recovering power. As we have a high rate of literacy due to the high zeal for education in Korea, we should work hard to propagate our high technology and the technology-intensive industries. All these, I believe, were the groundings we had in place to overcome the international economic depression.

As we have previously gone through the process (the IMF crisis), our economy has been through a hard time. We have overcome the hardship with wisdom, such as having the gold-gathering campaign (a grass-roots level campaign in which thousands of Koreans volunteered during 1997-1998 to cooperate to overcome the Asian Financial Crisis), and eventually established grounds for self-recovery. So, when the South Korean economy was hit by the west, we were able to overcome it very well. If we had not gone through the previous financial crisis, South Korea might also have had to suffer from what the United States is suffering.

I view the future of South Korean economy to be very optimistic. We are very well developed in the IT and electronics fields. We are now living in a world where it demands new culture, new technology, and I believe South Korea is ready to meet those demands. For example, our technologies in semi-conductors, automobiles, cargo-ships, etc, have been well recognized in the world market. Any country, even small- and medium-sized nations, and Africa, would need high technology and high quality labor. Just by looking into one cell-phone, the cell-phones made with our technology have become recognized as the number one brand in the world. Human beings feel most satisfied when they buy and possess the best of a product's kind.

Q: Korea is emerging as a high-tech economy. What is the future of Korea's technology sector? Which technologies should Korea focus on to keep itself ahead of its other Asian competitors?

A: If South Korea maintains its rate of growth in the technology based industries in which it has been surpassing other countries, South Korea will be in the spotlight on the global stage during the next five to 10 years. The high assessment of South Korea's economic value will continue.

I believe that since our country has world-class technology in the IT ,cargo ship and steel fields we will continue to have great economic strength over the next five to 10years.

Q: What will be the main issues at the G-20 Summit to be held in Korea in November? What effects will it have on Korea's stature in world economic governance?

A: There will be three or four things that we will be discussing. As the economies in Asia start to rise, the countries of the West started to perceive us as competitors. So-called neighboring countries should minimize their trade protection measures in the market. Also, the issues include financial problems and dollar holding issues that need to be dealt with at this G-20 Summit.

There is a serious problem regarding carbon gas emissions. Regarding climate change, due to the Green Business policy, the goal is to shutdown so called ‘chimney industries' and transform them into high tech IT industries. South Korea should be a leading nation for this initiative at the G-20 summit. South Korea's role at the G-20 Summit should be to show other nations there must be a transformation of industries to prevent the further destruction of the environment.

The countries comprising theG-20, which live together with other countries of the world, should not only be maintaining the rights and status they have been sustaining, but they should also be able to share it with the underdeveloped countries.

Lastly, I want to mention that the standard axis of the economy has moved from the U.S.-European side to the East Asian side. Consisting of Korea, Japan, China, Vietnam and India, the world's economic axis will be moving from the European countries to the Asian countries.

With a population of only about50 million, Korea isn't a large country, however, since we have high technology, our country will be part of the central axis of the world's economy. In this regard, Korea can stand in comparison to any other country in the world.

Q: Recently, the environment is emerging as an important factor in world affairs. What kinds of role can Korea play in solving environmental crises?

A: Regarding environmental issues, our government is pursuing a Green Development policy. So we are trying to promote cars run by hydrogen fuel, producing as little carbon dioxide as possible. In terms of energy generation, we are pursuing nuclear power generation, solar power generation and tidal power generation, which can enormously reduce carbon dioxide gas emissions and make every industry into a low carbon, green growth industry. This would make Korea a leading country in transforming the traditional chimney industries into high-tech IT industries and be an example to the rest of the world, and therefore play a leading role in solving the global warming issues. Eventually, Korea will be producing world-scale industries that will not release any carbon dioxide.

Q: What do you think the main problem is in developing and implementing green technology in Korea and what can we do to solve it? What is your vision for Green Korea?

A: I don't think there are many domestic issues that are preventing the economic development of Korea. Citizens in Korea have been following the policies very well. But I do think there are problems internationally. A convention on global climate change was recently held in Denmark. Almost all nations were concerned about their own nation's situation and were passing on the blame and responsibility to other nations rather than trying to find and eliminate the causes of the contamination within their own country. It would be hard to immediately closedown the factories that were causing the pollution, and since the countries are trying to buy time, they are passing the responsibility to other nations. South Korea has already begun to show some changes in the amount of its carbon gas emissions. Korea has to continue to grow its IT industry to actively cooperate with other international countries.

Q: What are the important problems the Korean economy is facing today and what are your solutions to those problems?

A: South Korea is an export-based economy. When the international market isn't good, our exports decrease, but when the international market is vitalized, our exports also increase. So we need to make some changes to the export-based economy. The international market is in a period of recovery, so it wouldn't be a great hardship for us to change our export-based economy, however, in order for South Korea to be of help to the international economic recovery, we need to develop our domestic market as well. We need a new economic policy that can create a harmonious balance between our export-based economy and our domestic economy.

Q: Today, job creation for young people and the aging population are two serious problems facing Korea. What is your view on these two important issues?

A: There is a statistic that shows that about 3.8 million people in Korea are unemployed. They aren't all youths, however. South Korea's corporations have built an inner basement while overcoming the global financial crisis. Taking this as an opportunity, corporations should pursue more open policies to create workplaces to employ more people and make every effort to reduce the unemployment rate for youth and women to the minimum. I think we need to have a more flexible employment policy. Ultimately, for corporations to have a stable settlement, they have to provide high quality work places, which could provide good working conditions. Now, the generations are changing and young people should present new and creative ideas so that the corporation scan walk in step with the evolving world. If the corporations do not hire new people, they will soon have a gap. When the economy has recovered and is stable, corporations should provide many jobs. I hope they would provide vital jobs for young people.

Another issue we easily forget is this. Until 10 or 20 years ago, the average lifespan was 60-65 years old. However, according to last year's statistics, the average lifespan rose to around 79-80 years old. Therefore, the official age for retirement should be extended from what was 55-57 to65 years of age. In this way, not only we can solve the unemployment issues of youth and women, but also the issue of an aging population. In this structure of a society in which people are aging, we need devices that can create jobs and protect a healthy, aging people.

So, I believe that we should actively adopt the Wage Peak System, which is a salary system that cuts the wages of the employee when they reach a certain age in return for job security.

Q: What can be done to develop Economic Human Resources in Korea?

A: We were able to overcome the global financial crisis because of our highly-educated work forces. Korean mothers are well known to be the top ranking people in terms of their enthusiasm for educating their children. Especially during economic hardship, the fervor for education grows. This is how good companies were able to nurture and develop talented manpower, and now they have formed the axis of Economic Human Resources in Korea. This is all due to Korea's enthusiasm for education. Noted scholar Jeffrey Pfeiffer said that "human labor is the competitive force." Yes - people, high quality labor, high quality brains are the competitive forces.

Our technology skills in the IT industry- Samsung Electronics, Hynix Semiconductor - technology skills are making today's Korea into a nation strong in creative ideas. A high quality labor force is the competitive force. I hope many citizens can have a good position in better jobs. For example, create a patented technology and make a strong base for our country's industrial technology.

Q: Today, Korea's trade with Asia is growing very fast. Korea's dependence on its traditional markets is declining. What are the most urgent steps Korea should take in its integration with the Asia-Pacific countries?

Korea should intensively gather the know-how of the preoccupied technologies and the advantages of the competitiveness of various industrial sectors and play a leading role in maintaining our current status. If we are not careful, we might be caught up by the developing countries.

In my opinion, our country should help the developing countries and the underdeveloped countries. It is because South Korea has also had times like that. Also, in order to help them, we should sustain and develop our advanced technologies and accumulated know-how and not get caught up by other countries.

Also, when we scale this down to the East Asian region, Korea, Japan and China would be the first partners to form an integrated economic axis and carry on the partnership in the exchange of goods and technology. Currently, Japan's right to take the leadership role has weakened while not being able to get out of the economic crisis. On the contrary, Korea has been growing very strong. So I hope that Korea will play the leading role in this partnership.

This would mean that the Japan centered East Asian economy would be moved to a Korea-centered East Asian economy. It is too early to overestimate China yet. So the baton for the leading role is being directly handed over to Korea from Japan. In either case, whether Korea supersedes or Japan supersedes, China will be following, so Korea should not rest on its laurels, but continue to put more investments and efforts into being the center of the economic axis in the East Asian region. And I hope that we will continue to develop the various advantageous parts as well as the initiatives.

Q: Recently, President Lee visited India. What is the importance of Indo-Korean economic ties for Korea's economic growth? In your view, what are the important business sectors that Korea should focus on in its relationship with India?

A: A new economic term was coined a few years back, which is "the BRIC " constituting the new economic powerhouse countries: Brazil, Russia, India and China. India has a huge population, cheap labor and abundant resources. India is a rapidly developing country also because the IT industry has high quality technology. Korea should form a network with these newly emerging countries and create a partnership that will benefit us in what we can receive and what we can give. The Korea-India partnership has great potential because India can provide a vast marketplace to advertise Korea to its 1.3billion people and teach them our technology. We should cooperate to come up with middle- and long-term cooperation plans. We established diplomatic relationship around 1973in areas such as economics, science and education. After the Korean War of 1950-1953, Korea has become far more advanced than India in terms of our education system and the effects of it. We can form a good partnership by giving our education to India and also receive what we lack in return. Both countries can exemplify what a good economic partnership is and we will maintain good relationship.

Q: Recently the EU and Korea concluded an FTA . What are the benefits for Korea from this free trade agreement?

A: The FTA between Korea and the EU means a lot to our technology-intensive high-quality industrial structure. Korea will give that to the European countries and receive cheap agricultural products and resources. We will have active trade in these areas and will be benefiting all involved countries. It's not a one way benefit to a country; rather, it is mutually beneficial.

Q: What is your point of view on the U.S.-Korea FTA ?

A: Both countries need each other, so I believe that it will be ratified. However, there have been a few conflicting issues, such as the automobile industry and tariffs. However, since our FTA with the EU was successful, an FTA between Korea and the U.S. will be encouraged and will be ratified soon.

Q: Politically the Obama administration is not so excited about Korea. Do you still think that the Korea-U.S.FTA will be concluded?

A: I believe that it will come to a conclusion by any means. We need each other. We are almost at the very end of coming to a conclusion. Though the Obama Administration took office, it will not bring about a big change to the fundamentals. Encouraged by the EU -Korea FTA , I think that Korea-U.S. FTA will too beratified.

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