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[ASEAN-Korea summit] Rising Southeast Asia, region of strategic priority to OECD

The 2019 ASEAN-Korea Commemorative Summit and the First Mekong-Korea Summit are just around the corner. Association of Southeast Asian Nations ambassadors in Paris have expressed to me their expectations of the summit on various diplomatic occasions, which reminds me of the importance of Southeast Asia and Korea’s New Southern Policy.

The rapidly-rising ASEAN bloc accounts for a population of 650 million people, with a total gross domestic product of about $3 trillion. According to the Organization for Economic Cooperation and Development’s Economic Outlook for Southeast Asia, China and India 2019, Southeast Asia is forecast to continue growing solidly at 5.2 percent annually during 2019-2023. It is also expected to be the fourth-largest economy by 2030. Recently the 10 ASEAN member countries and their five free trade agreement partners, including Korea, completed negotiations for the Regional Comprehensive Economic Partnership. The 15 countries will form the world’s largest free trade economy with one-third of the world’s population and global GDP.

The trade war between the US and China is restructuring global value chains and, as a result, Southeast Asian countries have been spotlighted as production bases. Exports from Southeast Asia to the US have increased, and investment has started being diverted from China mainly into Southeast Asia. OECD Investment Policy Reviews show that foreign direct investment into ASEAN countries in 2018 increased. According to an American Chamber of Commerce in the People‘s Republic of China and AmCham Shanghai survey in 2019, 40 percent of their member companies are considering moving or have relocated their manufacturing facilities outside of China, with Southeast Asia being the most preferred destination. 

(Ministry of Foreign Affairs)
(Ministry of Foreign Affairs)

The importance of the region has already drawn attention across the world. The US, the EU and China have strengthened their engagement in the area through regional initiatives, respectively the Indo-Pacific Strategy, Europe-Asia Connectivity and Belt and Road Initiative. The Korean government also announced the New Southern Policy in 2017, which puts the ASEAN bloc and its member countries on top of Korea’s diplomatic priority list and aims to significantly expand comprehensive cooperation with this region.

As the vision of the policy -- People-centered Community of Peace and Prosperity -- shows, Korea’s cooperation is beyond economic. It puts an emphasis on greater mutual understanding though people-to-people exchanges and constructing a peaceful and safe environment in the region as well as building base for mutually beneficial, future-oriented economic cooperation. ASEAN is Korea’s second-largest partner in trade, investment and people-to-people exchanges. This region is Korea’s main development cooperation partner, as well. The Korean government has actively shared its development experience with ASEAN, bearing in mind that “to teach to fish is better than to give a fish.” Some 18 percent of Korea’s foreign aid in 2018 was extended to ASEAN countries.

The OECD, to which I serve as permanent representative of Korea, has made efforts to cooperate with Southeast Asia. The OECD attached strategic priority to Southeast Asia in 2007 and launched the Southeast Asia Regional Program in 2014 as one of its outreach programs to nonmembers. The regional program aims to support domestic reform, strengthen regional integration efforts and bring countries closer to the OECD’s best practices and standards in all ASEAN member countries. In March 2019, SEARP members discussed how the SEARP can contribute to enhancing the ASEAN Connectivity, and we are preparing the 2020 SEARP Forum under the theme of the Human Capital Development.

Korea has been a co-chair of the program with Thailand since 2018. When I meet ambassadors to the OECD and ASEAN ambassadors on various occasions, they express their high expectations of the SEARP. The OECD, as a global standard-setter, endeavors to enhance the influence of its standards and rules among nonmember countries. The Southeast Asian countries expect policy recommendations from the OECD at domestic and regional levels so as to integrate their industry into global value chains. They are eager to explore how to cooperate with the OECD in areas such as digitalization, small and midsized enterprises, human capital development and infrastructure. Korea has vivid memories how to establish national policies and implement them in these areas, which is a valuable asset for Korea in co-chairing the program.

The 2019 ASEAN-Korea Summit will serve as an opportunity to review the development of ASEAN-Korea relations over the past three decades and present a new vision for the next 30 years. I wish every success for the summit and the SEARP.

By Ko Hyoung-kwon
Ambassador and permanent representative of South Korea to the OECD