Korea-India economic ties slow to take off

First published in The Korea Herald. It has now been five years since the India-Korea Comprehensive Economic Partnership Agreement ― a de facto free trade agreement ― went into effect, but the trade statistics do not present a very rosy picture. It was widely anticipated that the CEPA, which came into effect in January 2010, would lead to more bilateral trade and investments. South Korea has abolished tariffs on 93 percent of Indian imports, and India has done the same on 75 percent of Korean imports. Besides, the agreement sought to increase the interactive trade account, as it includes investment in various sectors like goods, services and even intellectual property. However, according to the latest statistics released by the Korea International Trade Association, while bilateral trade...

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Curious case of Uber in Korea

First published in The Korea Herald. Over the past couple of years, the sharing economy ― a system built around the sharing of human and physical resources ― has caught the world by storm. While the practice of sharing goods has always been common between closed groups ― friends, family and neighbors ― now the concept has evolved into a profitable business model. It has been helped largely by the strides in information technology that led to the worldwide boom in Internet penetration and smartphone use. The sharing economy has many advantages. It can reduce costs for available goods, services and time. You can use a product or service only when necessary, and don’t have to deal with the normal headaches. On the other hand, an owner can unlock the potential value of an item, such as a room,...

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Corruption and business ethics in Korea

First published in The Korea Herald. On most occasions, the Korean government latches on to any new international report or study that commends the country, be it on competitiveness, ease of doing business, regulatory reforms or education. However, there has been remarkable silence from bureaucrats and government officials regarding the latest Corruption Perceptions Index recently released by Transparency International. In its much-awaited yearly report, the nongovernment organization ― calling itself the “global coalition against corruption,” with 100 national chapters and an international secretariat in Berlin ― gives a comparative list of corruption worldwide. The organization is widely recognized as a corruption crusader and has built up a solid reputation since it was established in...

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Regional agreements gaining steam

First published in The Korea Herald. While bilateral free trade agreements, as a means to further the market-opening and rule-making agenda, have been globally picking up steam, there have also been parallel efforts to usher in a plethora of regional trade agreements and economic unions. Given the uncertainty of the multilateral agreement under the ambit of the World Trade Organization, which has been dragging on for years, efforts to form regional agreements are picking up. Although many of them are overlapping, 2015 could see some progress being made on at least some of the deals. They will have a significant impact on global trade. It is an opportunity for countries that seek to diversify their trade partners to closely follow the deals that are being put in place, to get first-mover...

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Crucial year for tackling climate change

First published in The Korea Herald. Toward the end of 2014, there was incremental progress in global efforts to tackle the fallout of climate change. It is now expected that all countries will reach a broad consensus when they meet in Paris in November and December this year. The United Nations Climate Change Conference was held in Lima, Peru, from Dec. 1-12, to negotiate a global climate agreement. This was the 20th yearly session of the Conference of the Parties, or COP 20, to the 1992 U.N. Framework Convention on Climate Change, or UNFCC, and the 10th session of the Meeting of the Parties, or CMP 10, to the 1997 Kyoto Protocol. While this was a conference in the annual series, and was hailed as an important first step ― it resulted in a five-page text now officially known as the Lima...

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ICT evolving for consumers in 2015

First published in The Korea Herald. Over the last few years, the impact of information and communication technologies on society has been enormous. ICT has deeply affected and reshaped most parts of our society, while radically influencing the global economy. No one can predict with certainty what role it will play in the future, but we do know that it will be significant. One aspect of the growth of ICT in 2014 has undoubtedly been its entry into the “mobile era.” It is a tool that constitutes a new infrastructure, changing the way our societies function, while its technical applications give us totally new opportunities to develop new and better solutions to our existing problems. As the latest International Telecommunication Union publication “2014 Measuring the Information Society...

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Currency wars on the horizon

First published in The Korea Herald. Brazilian Finance Minister Guido Mantega popularized the term “currency war” in 2010 to describe policies employed at the time by major central banks to boost the competitiveness of their economies through weakening their currencies. As we enter 2015, the specter of currency wars appears to be once again looming on the horizon. In layman’s terms, currency wars are said to occur when countries seek to devalue their currency to gain a competitive advantage ― exports become more competitive while imports become more expensive, leading to a rise in aggregate demand, which helps boost economic growth and reduce unemployment. However, if one country seeks to become more competitive through devaluation, it means other countries become less competitive. Therefore,...

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Skidding on oil prices

First published in The Korea Herald. The biggest “energy story” in 2014 was no doubt the oil price crash, which many say has “upended the geopolitical chessboard.” Worth watching in 2015, therefore, is who will recover and dominate the play ― the Organization of Petroleum Exporting Countries, Russia’s President Vladimir Putin who is fighting with his back against the wall, or the U.S. shale companies who are allegedly being targeted by OPEC members. As the U.S. Energy Information Administration has noted in its latest outlook, “The recent declines in oil price and associated increases in oil price volatility have created a particularly uncertain forecasting environment, and several factors could cause oil prices to deviate significantly from current projections. Among these is the responsiveness...

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For world economy, a year of divergence

First published in The Korea Herald. As we step into 2015, it would appear that on the back of a U.S. economic recovery, the dark days of the financial crisis are behind us. As the largest economy, accounting for more than one-fifth of global gross domestic product, the health of the U.S. economy has been critical for steady growth in the rest of the world through trade, foreign investment, financial markets and capital flows. Until now. But, as recent developments have shown, going ahead, there are many more variables that will impact the global economy. Leave aside the fact that the International Monetary Fund has projected the global economy to grow by 3.8 percent in 2015, a little better than the estimated pace of 3.3 percent for the previous year. Europe continues to deleverage with...

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Millennium Development Goals: Not there yet

First published in The Korea Herald. The New Year is significant when it comes to the issue of sustainable economic growth and the promises made by world leaders 14 years ago that have not been fully kept. World leaders, in adopting the United Nations Millennium Declaration in 2000, pledged to create a more equitable world by 2015. However, today, more than ever before, it seems that the wealthiest individuals have become wealthier while the relative situation of people living in poverty has improved little. Disparities in education, health and other dimensions of human development still remain large despite marked progress in reducing the gaps. Various social groups suffer disproportionately from income poverty and inadequate access to quality services and, generally, disparities between...

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