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Brief Reports

Report that suggests the national future strategies based on the analysis of major future issues by the research team

[Futures Brief] 15 Emerging Issues in 2022 (No. 4)

Park Seong-won, the Head of Innovative Growth Group, has selected highly likable nd influential issues out of 15 emerging issues that will draw considerable attention in 2022: (1) a new phase of the U.S.-China conflicts; (2) frequent environmental disasters and increased international disputes; (3) rapid progress energy transition; (4) response to the climate crisis; (5) advancement of virtual reality; (6) A.I. misuse and algorithm bias; (7) desocialization; (8) increase in social care works; (9) negotiation for a new wage system agreement; and (9) “mosaic family”. Less likable but influential emerging issues in his prediction include: (1) land publicity; (2) combination of energy independence and decentralization; (3) autonomy of robots and social consensus; (4) habitable zone in space; and (5) ecofascism. Highly likable and influential issues are issues currently occurring and expected to become more severe in the future. It is predicted that international disputes will be further intensified focusing on environmental preservation and technology competition; climate crisis responses and A.I. technology will lead to social confusion and concerns; a degree of independence will be driven by individualist society; and socially vulnerable groups will be more isolated. For less likable but influential issues, ecofacism may be emerged as a political reaction to environmental conservation while public domain, the influence of technology and human interactions may tend to expand. It is also predicted that crisis response may require publicity, social consensus and decentralization; calls for safe zones may increase with the radical development of technology; and a new trend of recognizing the space as a zone people can live in may be also emerged. “It is reasonable to understand most of the emerging issues raised as future changes including current discussions,” explains Dr. Park. “If we keep publicizing less likable but influential emerging issues, we will be able to respond to Black Swans such as the global financial crisis or pandemic.”

P.I : Park Seong-won

Date : 2021-12-02

[International Strategic Foresight] Changes in International Conflicts Viewed from Big Data (GDELT) (No. 6)

Dr. Park, Sung Jun (Associate Research Fellow) has found that transition in the conflict index, identified by GDELT, corresponds to the changes in international relations as understood by us to the certain extent, and captures more accurately the changes in conflict between two countries as compared with the tone information provided by the GDELT Event Database. In this report, he constructed a conflict index based on the average tone information and the number of events provided by GDELT Event Database, and observed changes in relations between countries using such an index. It was confirmed that: Korea-Japan disputes were drastically intensified due to Japan’s restriction on the export of high-tech materials used in semiconductors and displays in July 2019; Korea-China relations deteriorated considerably after Korea announced its intention to deploy THAAD and China imposed an unofficial boycott in the first half of 2017; South Korea-North Korea relations significantly deteriorated due to PMD mine incident in 2015, nuclear test and launch of satellites in 2016; U.S.-North Korea relations were most hostile in 2016 when America citizens were arrested in North Korea UN Security Council resolution was adopted to impose additional sanctions on North Korea, and North Korea has carried out the test launch of the long range ballistic missiles; U.S.-China relations deteriorated sharply by the military activities in the contested South China Sea, the closure of the Chinese consulate in Houston, and the closure of the U.S. consulate in Chengdu in 2020; and Australia-China conflict fully began in 2020 when Australia stood on the side of the United Stated and called for an investigation of COVID-19. “This study focused on the derivation and verification of conflict index. I expect that this index can be used to analyze and forecast international relations and the impact of conflicts between countries on the economy of such countries and worldwide,” explains Dr. Park.

P.I : Park, Sung Jun

Date : 2021-11-25

[National Future Strategic Insight] Implications of a Just Transition Policy through Opinions from Key Stakeholders over Coal Phase-out Conflict: Focus on Workers and Local Residents (No. 57)

This study aimed to draw implications for a just transition policy by collecting opinions of workers and local residents, who are key stakeholders involved in the major conflict issues related to coal phase-out. The survey participants were selected on a small scale, taking into consideration their understanding of coal phase-out policy and the representativeness of their opinions as stakeholders. The survey questionnaire was designed to inquire about their awareness of the climate crisis and coal phase-out policy, the major conflict issues surrounding coal phase-out, and the direction of the just transition policy. According to the survey results, both the workers and local residents, who are the main victims of coal phase-out policy, showed a high level of awareness regarding the climate crisis and coal phase-out policy. However, opinions differed on conflict issues and the direction of the just transition policy by each stakeholder group according to their positions and situations. Based on these findings, several implications were drawn, including the need for active involvement of the National Assembly in establishing and implementing a just transition policy in relation to coal phase-out, to lay a foundation for achieving carbon neutrality favorably.

P.I : Jeong Hoon

Date : 2021-11-24

[National Future Strategic Insight] Strategies for Reorganizing Welfare System Shared by Central and Local Governments for the Efficient Welfare Funding (No. 31)

Research Fellow Lee Sun-hwa has proposed an institutional reform plan for government subsidies in the welfare sector as a strategy to respond to the national challenges i.e. expanding welfare and strengthening autonomy. In this report, her proposal includes that (1) cash-benefit basic welfare projects requiring national standards, such as livelihood benefits and basic pension, should be promoted mainly by the central government at its own discretion and financial responsibility; (2) a decentralized framework should be introduced to expand the discretion of local governments for regional, diversified, on-site projects; (3) different welfare projects covering the same beneficiaries should be integrated or linked; and (4) projects with vague and indefinite purposes should be clarified for orientation with social consensus – they might be integrated if needed. Three alternative strategies were suggested to improve the government welfare funding system from the perspective of fiscal neutrality, in addition to the adjustment proposals for individual welfare subsidies: first, central grant programs for other sectors may be downscaled by the burden of welfare expenditure in the central government budget; second, the funding balance between welfare and education may be adjusted so that local governments can expand joint projects with local offices of education with savings from the cash-benefit welfares; and third, financial resources may be tuned within the subsidy budget of Ministry of Health and Welfare under the principle of that “cash benefits are centralized and social services are localized”. “The more diversified government functions, the more important it is to make decisions about the supply of public goods or to configure the supply scheme and delivery system,” said Lee. “Efficiency of welfare funding projects can be achieved by political and administrative decentralization in which the central and local governments build a new platform of inter-governmental authority and financial relationship for solving social and economic problems as lateral partners.”

P.I : Lee Sun-hwa

Date : 2021-11-17

[International Strategic Foresight] Future Warfare and Military-Technology Solidarity: Military Application of Artificial Intelligence and Military-Civil Fusion (No. 5)

Dr. Cha Jung-mi, the Director of Center for International Strategy, has alleged that 4.0 Industry innovation is changing the future warfare and the focus of global arms race between grate powers, especially centering on military application of artificial intelligence Amid the U.S.-China hegemony and 4.0 Industry, the technology-security fusion and the industry-national defense fusion are being rapidly intensified, as emerging technologies such as A.I. and space technology are dual-purpose technologies with both commercial and military uses. This study focused on a technological factor, i.e. emerging technologies in the era of 4.0 Industry, the prospect of future wars driven by changes in the international order due to the rise of China, and the military responses of the U.S. and China, with detailed analysis of global arms race between U.S. and China from the technological deterministic perspective that A.I. will be a game changer for the future hegemony, especially regarding military application of A.I., military innovation and warfare innovation ecosystem. 4.0 Industry global arms race is not limited to competitive acquisition of military capability anymore – it is supported in terms of technological hegemony. Emerging technologies designed by the private sector are reshaping the warfare innovation ecosystem with military-civil fusion, which is a system that simultaneously fulfills the economic and military purposes of accelerating technological innovation and increasing military personnel and material. Dr. Cha paid attention to the possibility of further intensification of the A.I. arms race between the U.S. and China. “Korea also needs to seek to establish our own military technology innovation ecosystem where military-civil cooperation can exert synergy as well as preparation for future wars,” explains Dr. Cha. “The government, military, industry, academia, and laboratory should have a discussion on ways to build an effective ecosystem beyond mere benchmarking, given that the U.S. and China are building their respective innovation ecosystems based on social and political bases.”

P.I : Cha Jung-mi

Date : 2021-11-11

[National Future Strategic Insight] Mid- to Long-Term Development in Energy Demand Management (No. 30)

Dr. Cho Hae-in (Associate Research Fellow) has made a statement that it is necessary to build up a monitoring/verification system and to prepare a financial compensation plan for ensuring demand management with mid- or long-term energy efficiency improvements, in relation to the “Energy Efficiency Resource Standard (EERS)”. The conventional energy transition policies are mainly focusing on how to increase energy to meet the demand, however, a paradigm is shifted to initiate a new energy consumption structure: low consumption and high efficiency. Korea has been implemented the EERS as a pilot project since 2018. Conducting a survey and interviews with energy providers with EERS compliance and supervisor agencies responsible for overall management, Dr. Cho analyzed the performance and practical problems of the pilot project. It was found that efficient EERS operation is difficult for both energy providers and supervisor agencies due to the absence of monitoring/verification systems and financial compensation. Consequently, she proposed a framework for monitoring and verification and a financial compensation plan including incentives or investment return facilities. “We need efforts to find a suitable strategy that can maximize the effectiveness of the current EERS business model by in-depth analysis and benchmarking of overseas successful cases,” explains Dr. Cho. “If energy providers are guaranteed a return on their investment and receive incentives based on performance, and also end consumers directly control and experience energy consumption, there will be a huge synergy effect in the implementation of the EERS project.”

P.I : Cho Hae-in

Date : 2021-11-04

[National Future Strategic Insight] Cryptocurrency and Changes in Financial System (No. 29)

Dr. Park, Sung Jun (Associate Research Fellow) has alleged that cryptocurrency is a form of asset, not a “currency”, thus it needs customized control and supervision accordingly, as well as interest in international implications of central bank digital currency (CBDC). With the rapid digital transformation of the economy, the proportion of e-payments has drastically elevated and innovation has taken place, with the advent of distributed leger, blockchain, and of course, cryptocurrencies. Among cryptos, stablecoins attempt to offer price stability and are backed by a reserve asset, which thus might be used in regular payment system. Recently, lots of studies on the CBDC have been positively performed and published. Based on these current trends and potential changes in a financial system, Dr. Park analyzed digital currencies and suggested policy directions our society should take in a place. According to his opinion, first, cryptocurrencies are in a form of asset, not “currencies”, thus they needs customized control and supervision accordingly, because that strong anonymity that most cryptocurrencies offer can serve as a simpler tool for crimes, such as money laundering, while international cooperation is widely believed to be essential for fights against money laundering and terrorist financing. Second, although it does not draw any attention in Korea yet, the stablecoins have no guarantees that they will work as designed but relatively higher risks of “runs”, whereby it is necessary to monitor stablecoins and relevant policies made by central banks in major counties and international organizations. Last but not least, he calls for attention to the international implication of the CBDC, because the CBDC has potential of leading to an innovative cross-border payment service, which requires attention from policy makers as there are many discussions about the impact of China’s digital yuan on the current dollar-centered international financial system. “Economy has demonstrated sharply rapid digital transformation while the demand for cash continues to decline,” said Dr. Park. “This report covers cryptocurrencies, central bank digital currency and changes in the international financial system.”

P.I : Park, Sung Jun

Date : 2021-10-21

[International Strategic Foresight] Cooperation for Disaster Risk Reduction for Post-Pandemic Peace on the Korean Peninsula (No. 4)

Dr. Kim Tae-kyung (Associate Research Fellow) had made a statement that South Korea can contribute to establishing multilateral cooperation for peace process on the Korean Peninsula with disaster risk reduction (DRR) arrangement in Northeast Asia in the current global situation where non-conventional security risks has been rising after the COVID-19 pandemic. This report is intended to identify changes in DRR-related perception and governance of North Korea under Kim Jong-Un, and to draw policy alternatives by envisioning the DRR collaboration for peace process on the Korean Peninsula. According to Dr. Kim’s study, two notable points were identified – first, North Korea is showing relatively high affinity for interaction with international organizations and multilateral mechanisms, as well as for adaptation of universal norms in the process of DRR governance, thanks to constant activities of international organizations and humanitarian networks in the late 1990s. Second, North Korea is showing activeness in establishing domestic and overseas DDR governance as preventive response to non-conventional security risks such as pandemic, climate change and natural disasters by reorganizing its own legal system. Consequently, it is Dr. Kim’s allegation that establishing a joint response within a multilateral framework via the UN agencies resident in North Korea will be worth considering in future DDR cooperation on the Korean Peninsula; for example, a multilateral DDR council owning to United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), or alternatively, discovery and support of an inter-regional emergency response across the Korean Peninsula and other regions with the aid of International Federation of Red Cross (IFRC), playing a critical role in DDR activities in North Korea. In his opinion, if DDR cooperation arrangement for the Korean Peninsula is made within the “Sendai Framework for Disaster Risk Reduction” which was adopted in 2015 Third UN World Conference on Disaster Risk Reduction, it may serve as a new driving force to overcome obstacles in the peace process and inter-Korean relations under the “emerging security” agenda. “Korea should make various efforts to cooperate with East Asian countries while supporting increased roles of civil society, academia, and professional groups to enhance knowledge and attention to DRR, as well as regional communication and cooperation,” insists Dr. Kim. “Based on the development of a multi-layered network that includes the private sector, we can implement the vision for joint DRR on the Korean Peninsula.”

P.I : Kim Tae-kyung

Date : 2021-10-14

[National Future Strategic Insight] Future Policies and the National Assembly in the Viewpoint of Chief Advisors (No. 28)

Research Fellow Park Hyeon-Seok conducted a survey for chief advisors of the 21st National Assembly on their opinions for future policies and the role of the National Assembly; they answered that the most urgent tasks are inequality and polarization and it is difficult to pay attention to mid- to long-term issues requiring a bipartisan agreement but compromised by political polarization. NAFI’s survey was performed with 373 staffs working in the National Assembly Office as respondents to investigate their recognition of future policies and the role of the National Assembly. Among the various agendas, most of chief advisors shared the recognition that inequality and polarization are the most urgent agendas, regardless of party, position, age and tenure. The answer ranked first (selected by 137 persons out of 368 respondents) was “resolving economic inequality and political/social polarization”, followed by “addressing aged society and low birth rate” selected by 46 staffs. As the reason why it is difficult to deal with long-term issues, 147 of the total respondents answered that “it is hard to pay attention to mid- to long-term issues requiring a bipartisan agreement but compromised by political polarization”; 115 staffs answered that “both nomination evaluation and assessment by media and civic organizations are mainly based on quantitative metrics centering on short-term legislative performance, thus it is difficult to approach the issues from a long-term perspective”. According to this report, the political polarization in the National Assembly led to lack of conversation between ruling and opposition parties and accordingly, they have lost the capacity to handle mid- to long-term agendas requiring bipartisan cooperation. Calls for “Working National Assembly” contributed to getting rid of so-called “plutocracy” and making a productive, practice-oriented National Assembly; on the other hand, the political environment has been built up in which it is difficult to deal with mid- to long-term agendas from a long-term perspective because most of them focus on short-term accomplishments only. “It shows that the National Assembly needs to be changed to ensure active approach to the mid- to long-term issues of the country,” said Dr. Park. “We need to find a new framework for evaluating the performance of the National Assembly so as to ensure fair evaluation for the efforts of lawmakers to resolve mid- to long-term issues with conflicts and the arduous negotiation between the ruling and opposition parties.”

P.I : Park Hyeon-Seok

Date : 2021-10-07

[Futures Brief] Economic Growth as Secular Religion and GDP as Magical Number: Seeking Alternatives (No. 3)

Dr. Lee Sang-jic (Associate Research Fellow) has asked why many people feel vaguely uncomfortable about “economic growth”, which yet maintains the absolute value in the Korean society. In this report, Dr. Lee (1) defined the meaning of “economic growth” with a numerical value, i.e. gross domestic product (GDP); (2) identified various attempts at home and abroad to compensate for the limitation of the term “GDP”; and (3) explored social conditions forcing economic growth and what is required to solve those conditions. He pointed out that although it is hard to explain a relationship between quality of life and economic growth measurable by GPD increase, many people still believe the GPD increase is the top priority in our society, while alternative indicators tried at home and abroad since 1970s did not exclude economic growth itself. This limitation is fundamentally due to modern monetary system where most of the money supply is created by private banks in the form of depts – in Dr. Lee’s opinion. The report proposed three alternatives: (1) the meaning of GDP and economic growth need to be considered more deeply; (2) alternative indicators should clearly reveal the tension between various values; and (3) we need to think how to get out of the dilemma of growth, accompanying with fundamental transformation of the modern monetary system. “In order for the Korean society to escape from the ‘growth dilemma’ that nobody can continue or stop, a fundamental shift in paradigm and systemic transformation are required,” emphasized Dr. Lee

P.I : Lee Sang-jic

Date : 2021-09-30