Is the Korean System Sustainable?

"The Republic of Korea Achieved the Miracle on the Han River; Now is the Time to Consider Sustainable Development"

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Development Encompassing Future Generations

Through its development era in the 1970s and 1980s, the Republic of Korea achieved remarkable economic growth in a short period, along with social stability and political democratization. However, it is now in a situation where maintaining even a 3% economic growth rate is difficult. With the low growth trend, stemming from the so-called 'three lows' of low inflation, low oil prices, and low interest rates, persisting long-term, the overall living conditions of the people have deteriorated due to increased unemployment, leading to heightened anxiety about an uncertain future and widespread social discontent and distrust. Furthermore, this situation is likely to worsen with the accelerating aging of the population. This signifies that the era when the system based on growth-first principles operated is over. Now is the time to reconsider the entire national system for sustainable development that can encompass future generations from a long-term perspective. This book contains that consideration.

Sustainability of the Ecological Environment

First, in Chapter 1, Na Tae-jun addresses the issue of how to manage social conflicts arising from national policies, focusing on cases of national environmental projects. According to him, the conditions for successfully managing public conflicts in national environmental projects are largely the establishment of an institutional foundation, the construction of social infrastructure, and the construction of cultural infrastructure. The author points out the need to derive conditions for success through avoiding unilateral government-led approaches, adopting collaborative project co-management systems, introducing private participation governance models, training private conflict management experts by introducing conflict management bodies, and studying successful and failed cases of conflict management in national environmental projects for sustainable outcomes.

In Chapter 2, Lee Tae-dong addresses the issue of urban sustainability. Densely populated urban areas, where a large population and key infrastructure are concentrated, are the most vulnerable to the impacts of climate change, thus requiring climate change mitigation, adaptation, and resilience. This chapter points out that the emphasis in urban climate policy is shifting from mitigation and adaptation to resilience, and aims to assist urban governments in enhancing sustainability by conceptualizing 'evolutionary climate resilience' and providing a phased analytical framework. Evolutionary climate resilience is defined as the continuous transformative capacity to recover to a more sustainable state through awareness, preparation, and response to climate change risks and vulnerabilities in urban areas. This concept is used to present an analytical framework and derive several practically applicable conclusions.

In Chapter 3, Jeong Tae-yong explores the issue of sustainability amidst international efforts to jointly address climate change since the entry into force of the Framework Convention on Climate Change in 1992. He analyzes the characteristics of the new climate regime in 2015, points out the problems with Korea's existing response measures, and proposes policy tasks such as establishing new governance for climate change response, reforming energy pricing, developing a carbon-neutral power generation plan, expanding climate finance, and promoting overseas expansion of climate-related promising industries as sustainable climate change response measures.

Sustainability of the Economy

The authors of Chapters 4-6 evaluate and forecast the sustainability of the Korean economy. They seek to identify the causes of the significant slowdown in the dynamism of the Korean economy from a sustainability perspective. Sustainable economic growth can be defined as the ability of the national economy to maintain a certain level of growth rate in the long term without government fiscal stimulus or interest rate cuts. Conversely, in situations where sustainability is not guaranteed, if the government artificially boosts consumption, the national debt may increase, leading to an economic crisis.

In Chapter 4, Kim Sung-tae notes the severity of the negative economic effects of rapid population aging in Korea, which are even more pronounced than in Japan. He warns that rapid aging will lead to a decline in economic growth rates, a contraction in household consumption, an increase in household debt, and a rise in government fiscal burdens. He proposes measures such as increasing the efficiency of financial resources through the resolution of non-performing companies, expanding the efficiency of human resources by increasing labor market flexibility, rationalizing regulations in the market, and limiting the use of aggregate demand policies.

Chapter 5 deals with the sustainability of energy, the 'blood of the economy.' Ryu Ji-cheol provides a concept of sustainable energy security suitable for the Korean economy, which has an energy self-sufficiency rate of around 5%. Energy is a prime example of a social trap that yields short-term benefits but long-term negative effects. Therefore, it emphasizes the meaning of securing energy supply while meeting current needs without compromising the ability to meet the needs of future generations, and ensuring the environmental aspects of energy and the energy accessibility of future generations. This chapter critically examines Korea's energy security conditions and major policies, and emphasizes the need to pursue long-term and steady policies focused on securing active and stable energy sources, reducing fossil fuel use and rationally improving the energy supply and demand structure, and creating a foundation for energy security by activating market functions.

In Chapter 6, Kim Sang-bae discusses the sustainability of 'IT Korea,' which has been Korea's growth engine for decades. The author posits that to systematically understand competition in the IT sector as a leading sector, competition occurs at 'three thresholds': the threshold of technology, the threshold of standards such as technical standards, and the threshold of attraction, such as competition for normative dominance. He presents an analytical framework for IT competition using five variables that encompass system fitness variables such as scale, policy, and institutional variables. Through this, the author examines issues related to the past, present, and future of IT Korea, including smartphone powerhouses, IT infrastructure powerhouses, word processor powerhouses, internet service powerhouses, the digital Hallyu, and middle-power IT diplomacy, and proposes future tasks for each issue.

Sustainability of Society

Factors influencing the sustainability of human society include not only the natural environment but also the homeostasis of the system through the continuous influx of its members, and the control of inequality, which is indispensable for human society, at an appropriate level.

In Chapter 7, Han Jun examines the process of compressed demographic change experienced by Korea and shows how the low birth rate and aging population issues facing Korea threaten the sustainability of the system. The author points out the change in the dependency ratio and the imbalance of income and expenditure in the national transfer account as economic impacts of demographic change. He highlights two aspects of social threats: intergenerational equity threats in terms of burden and benefits of care, and intergenerational equity threats in terms of opportunities for human capital investment and utilization. He warns that if new socioeconomic paradigms are not created to overcome these issues, Korea will be trapped in low birth rates and head towards stagnation or decline.

Subsequently, in Chapter 8, Hwang Sun-jae focuses on the issue of inequality, which has been continuously and repeatedly worsening in Korean society. Inequality breeds various social pathologies, undermines social integration, and hinders future expectations and possibilities. When the deepening of inequality becomes so structural that it cannot be overcome by individual effort, various forms of social conflict inevitably arise. Inequality in one area transfers to inequality in another, and it expands and reproduces across generations. The author judges that Korean society has already reached this point and argues that it must undergo surgery before it is too late. He concludes that to maintain sustainable inequality—a level of inequality that does not threaten a society's sustainability while simultaneously functioning as an appropriate reward and incentive system—it is necessary to establish a matrix of inequality policy targets, prioritize them, implement policies that can change the environment affecting them, and possess firm political will. ■

Table of Contents

Foreword ■ Son Yeol

I Sustainability of the Ecological Environment

Chapter 1 Sustainable National Environmental Projects ■ Na Tae-jun

Chapter 2 Urban Sustainability: Evolutionary Climate Resilience Concept and Framework ■ Lee Tae-dong

Chapter 3 Climate Change Issues and Korea's Sustainability ■ Jeong Tae-yong

II Economic Sustainability

Chapter 4 Is Sustainable Economic Growth Possible for Korea? ■ Kim Sung-tae

Chapter 5 Korea's Sustainable Energy Security Strategy ■ Ryu Ji-cheol

Chapter 6 IT Korea, Sustainable?: Competition in Emerging Power in Future Leading Sectors and Korea ■ Kim Sang-bae

III Social Sustainability

Chapter 7 Demographic Change and Sustainability ■ Han Jun

Chapter 8 Inequality and Sustainability ■ Hwang Sun-jae

Attachment: 2018_book1.pdf