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The Peninsula

10 Issues to Watch for on the Korean Peninsula in 2022

As 2021 began, the world was still in the depths of the pandemic and vaccines to protect against COVID-19 were only beginning to become available to the public in a small number of countries. As 2022 begins, the pandemic continues to impact lives and economies around the world but there are signs of recovery. Among the advanced economies, South Korea has recovered the fastest. In contrast, the North Korean economy continues to suffer.

Despite starting a vaccination program later than most developed economies, South Korea was able to vaccinate 80 percent of its population by November of last year. The vaccination program, in combination with an expansionary fiscal policy, a recovery in private consumption, and a revival in trade, helped to boost the South Korean economy by an estimated 4 percent in 2020.

North Korea has continued to struggle with the pandemic as it maintained border controls to limit the domestic spread of COVID-19. Pyongyang was offered six million vaccine doses by COVAX last year but declined to accept them. How North Korea begins to move past the pandemic will be a key issue for the Korean Peninsula in 2022. Rather than laying out a path to living with COVID, North Korea begins the new year with a policy focused on maintaining its COVID controls while trying to improve the access to food for its population.

The major story south of the DMZ in 2022 likely will be the presidential election. Much as the inauguration of Joe Biden brought an end to four years of an “America First” foreign policy and helped to reboot U.S.-Korea relations, the election will present an opportunity for South Koreans to vote for continuity or change. Moon Jae-in is signaling that he will continue to try to improve relations with North Korea until his successor is sworn into office in May.

With that in mind, here are 10 issues related to South Korean politics, U.S.-Korea relations, South Korea’s relations in the region, and North Korea to follow that will have an impact on the Korean peninsula in 2022:

South Korea’s Presidential Election

With Moon Jae-in’s single five-year term set to conclude in May, South Koreans will head to the polls in March to elect his successor. The two main candidates are former prosecutor general Yoon Suk-yeol of the conservative People’s Power Party and former Gyeonggi province governor Lee Jae-myung of the progressive Democratic Party.

Unlike presidential candidates in prior elections, neither of the two major party candidates this year has experience in the National Assembly and represent outside choices for their parties. Perhaps because of that lack of national level experience, both candidates have put forward relatively similar and traditional foreign policy platforms.

The election is likely to turn on domestic issues. After seeing housing prices jump under the Moon administration it is not surprising that polling indicates that that the top issue for South Koreans is real estate, followed by the perennially important issue of jobs.

One potential wild card in the race is perennial presidential candidate Ahn Cheol-soo, who has begun drawing support from young voters disenchanted with the two main candidates. Voters in their 20s and 30s are expected to be the main swing demographic in the election. Should Ahn choose to throw his support to one of the two main contenders, he could influence what is expected to be a tight race.

Political Polarization

South Koreans are becoming more polarized. A local government survey in 2019 revealed that Koreans viewed political affiliation as the source of the most severe social conflict. Correspondingly, studies show that the country’s two largest political parties are now characterized by high levels of internal ideological homogeneity and inter-party hostility. While a legitimate source of concern, these changes are also the natural consequences of rapid political, economic, and social changes over the past 60 years.

Dr. Darcie Draudt observed that Koreans are undergoing a historic shift in their perception of citizenship. From the 1960s to 1980s, the country’s authoritarian regimes imposed a social contract with the people that demanded concessions in political rights for economic opportunities. This relationship with the state underwent radical changes when political freedoms were restored in 1987 and large segments of society began experiencing economic precarity following the 1997 Asian Financial Crisis. As Koreans search for a new social contract, marginalized groups (including women) who had been sidelined in the broader push for democratization in the 1980s are starting to assert their rights.

Tellingly, these demographic gaps match partisan divisions: older generations who experienced crushing post-war poverty are likely to hold more conservative views while people who are in their 40s today and had participated in the pro-democracy movement are more likely to vote for progressive parties. Meanwhile, the youth – who have experienced neither absolute poverty or political violence – respond largely to material uncertainties and act as a swing vote.

While this flux has allowed deeply toxic politics to thrive in some circles, it is also one that has to be undertaken for Koreans to form a new concept of citizenship that more firmly embraces the ideals of a pluralistic democracy.

Gender and Generational Gaps

Gender stratification is becoming an increasingly serious issue in South Korea. While the country has made great technological and economic advancements, it ranks 108 out of 153 on the World Economic Forum Gender Gap report. Women earn less than men and are poorly represented in positions of political and economic power. However, due to intense social competition, high rates of unemployment and general dissatisfaction with the Moon Administration, Korean men in their 20s and 30s view gender equality as a zero-sum game. A survey conducted by the Korean Women’s Development Institute found that over 50% of Korean men in this age group feel hostile towards women.

More concerning is how this is bleeding into the political sphere. Opposition to feminism has become pervasive enough to shift more typically progressive demographics to the right. With the upcoming presidential election, politicians are eager to appeal to this voter base. Lee Jun Seok, chairman of the People Power Party, compared feminism to terrorism, and is very popular among young male voters. In an effort to counter declining approval ratings, presidential nominee Yoon Seok Yeol recently posted in favor of abolishing the Ministry of Gender Equality.

Combined with the disproportionate affects of the pandemic on women, many women’s rights activists fear that this surge in conservatism and anti-feminist sentiment years could set back the progress of women in South Korea for decades.

The Metaverse

With continuation of the pandemic and people spending more time online, utilization of the virtual space, metaverse, became a buzzword in technology and business, including in South Korea. As global tech companies such as Facebook (now Meta) and Microsoft expand their investment and resources in the metaverse, South Korea is also eyeing on becoming the next global leader in this new territory.

Naver Z Corporation’s metaverse platform, Zepeto, has been leading the social platform’s efforts to develop a virtual space for everything from social gatherings to collaboration with luxury fashion brands.. Other industries such as education, home shopping, arts, culture, and tourism are eying the metaverse as they expand their business and increase virtual engagement with consumers. At CES 2022, Hyundai Motor Company presented its vision for “metamobility,” a combination of mobility in the metaverse, expanding the virtual territory even further.

In 2021, South Korean government launched a metaverse alliance to facilitate the development of metaverse across industries. Earlier this year, the Ministry of ICT announced its goal to become the fifth largest country in the metaverse world by 2026 and laid out four major goals – launching the ecosystem for metaverse platforms, nurturing appropriate professionals, fostering companies and setting up a safe environment for all metaverse users.

Seoul Metropolitan Government became the first local government to announce its metaverse plan and could start rolling out in phases starting this year.

In March 2022, Sogang University will open its metaverse graduate school, which is the first of its kind in South Korea. From business to government, we will continue to hear more about the metaverse and related digitalization technologies in Korea in 2022.

New Leadership and Korea-Japan Relations

After a series of incidents starting in 2018 caused Korea-Japan relations to plummet, the resignation of former Japanese Prime Minister Abe Shinzo and inauguration of Suga Yoshihide in September 2020 slowed the freefall in ties last year. Now, with another leadership change in Tokyo last October and an upcoming election in South Korea this March, the relationship between the two neighbors could see another dramatic shift in 2022. Japanese Prime Minister Kishida Fumio has stressed the importance of stabilizing ties with South Korea but has placed the onus on Seoul to take the first steps by adhering to the 2015 agreement on “comfort women,” which South Korean President Moon Jae-in revoked in 2018. Both major party presidential candidates in South Korea have provided some reasons to be hopeful about improved relations this year. Both the ruling Democratic Party’s Lee Jae-myung and the conservative People Power Party candidate Yoon Seok-yeol stated they would seek to build on the vaunted 1998 Kim-Obuchi declaration. However, following in the footsteps of his conservative predecessors, Yoon is more enthusiastic about improving bilateral ties than the more skeptical Lee.  Nevertheless, with so many sticking points in the relationship, warming up Seoul-Tokyo ties will take time and we may only see small steps, if any, towards a better understanding this year.

U.S.-ROK Indo-Pacific Cooperation

In order to respond to growing challenges in the region, the Biden administration has shown a continued commitment to the policy of a free and open Indo-Pacific established by his predecessor as a top priority of U.S. foreign policy. The Republic of Korea (ROK) has pledged close cooperation with its ally through its own regional initiative called New Southern Policy based on the shared principles of openness, inclusiveness, transparency, and respect for international norms.

During the East Asian Summit in October 2021, President Biden announced an ‘Indo-Pacific Economic Framework (IPEF)’ to pursue shared objectives around the digital economy, technology, resilient supply chains, decarbonization and clean energy, infrastructure, and worker standards. Details of IPEF are unclear, but speculation looms large that the effort is to counter China. Chances are high that the ROK will cooperate with Washington’s initiatives in the region. By previously overcoming years of economic retaliation from China, there is a belief among Korean policymakers that they can be less afraid of future counteractions from China. Both major presidential candidates Lee and Yoon approved the values and approaches at the core of the U.S. Indo-Pacific strategy. However, the depth of engagement and the timetable for the ROK’s embrace of the IPEF and the larger U.S. Indo-Pacific strategy will depend on how the U.S.-China strategic rivalry unfolds in 2022.

10th Anniversary of KORUS FTA and Future of U.S.-Korea Economic Relations

March 15th will mark ten years since the U.S.-Korea Free Trade Agreement went into effect, a milestone to reflect on how the deal has benefited both countries. For Korea, goods exports to the U.S. are now up nearly 70 percent from pre-agreement levels. For the U.S., annual exports to Korea in goods have grown by nearly 30 percent as of last year and 40 percent in services in 2019—a more revealing metric as the pandemic continues to be a major drag on global services trade.

While the transition to the Biden administration has eased much of the underlying tension in the bilateral economic relationship initiated by the Trump White House, there are still major challenges ahead. In the new paradigm of U.S. politics after Trump’s election, both parties remain highly skeptical of trade agreements. Moreover, where the U.S. is most interested in working with Korea to shore up supply chains—notably in high-tech areas where there are also security concerns about China—has raised caution flags in Seoul. The semiconductor industry is hugely important to South Korea and any strategically motivated diversion in the supply chain could have significant negative economic consequences. There are many ways in which South Korea can still cooperate with an increasingly trade-skeptic U.S. in high-tech areas and benefit, such as Samsung’s $17 billion investment to build a new chip factory in Texas, but the dance between all of these considerations will shape the trajectory of U.S.-Korea economic relations in 2022.

30th Anniversary of the Republic of Korea-China Relations and Their Future Prospects

On August 24, 1992 in Beijing, the Republic of Korea (ROK) and the People’s Republic of China (PRC) established diplomatic relations in a joint statement confirming the One China principle and the peaceful reunification of the Korean Peninsula. The two countries have made significant progress in every area including politics, the economy, and culture over the past 30 years. However, they have also experienced major conflicts on both soft and hard security issues including trade disputes over garlic (1999-2001), an historical dispute over Northeast Project (2003-2004), as well as political disputes over North Korea’s assaults on Cheonan and Yeonpyeong Island (2010) and lastly ongoing military disputes over THAAD (2014-present).

How will Sino-South Korea relations would develop in 2022? The outlook is not grim. The ROK will have a presidential election in March. Both ruling party candidate Lee Jae-myung and major opposition party candidate Yoon Suk-yeol vowed to strengthen strategic cooperation with China on the basis of mutual respect. In the fall, the PRC will have its 20th Party Congress and likely approve President Xi’s third term. Both leaders will not want to deteriorate current bilateral relations further as their new terms begin.

The question is can the shared interest in maintaining the status quo hold in the face of worsening public opinion in each country toward the other and the U.S. – China strategic rivalry.

North Korea and the Pandemic

The pandemic has been harder on North Korea than on any country. Kim Jong-un has noted on numerous occasions that North Korea faces a food shortage. This is in part due to its border closure with China to prevent the spread of COVID-19 domestically. Over the last two years, trade between North Korea and China has fallen significantly. North Korean exports to China improved marginally to $57.9 million in 2021, but remain 73.1 percent below their 2019 levels. Imports from China have seen significant declines in food and agricultural inputs such as fertilizer. Overall, imports from China continued to decline in 2021 are 90 percent below their 2019 levels.

North Korea had few options to address the situation due to its limited access to vaccines. In 2021, the world struggled to produce the vaccines needed to vaccinate much of the global population, with shortages greatest outside of the world’s advanced economies.  For reasons that are unclear, North Korea declined the 6 million vaccines doses it was allotted from COVAX.

Will 2022 be different? Global COVID-19 vaccine production is expected to rise to a level that will allow for much of the world to be vaccinated by the end of the year.

North Korea has taken tentative steps to partially reopen its border and has begun testing missiles more frequently. If North Korea does reopen its border, how quickly will that undo the damage caused by the pandemic and its border closures?

An End to the Korean War

President Moon Jae-in called for an “End of War Declaration” in his September 21, 2021, address to the United Nations General Assembly. The Declaration had not appeared by the end of the year, so there likely will be pressure from the Blue House to issue it before Moon’s term ends in 2022. The Biden Administration has not rejected the proposal, saying that it takes seriously all suggestions from close allies, including South Korea, but has not endorsed it either. The issue could cause some friction if Washington fails to go along with the Declaration. Seoul has tried to allay Washington’s concerns by saying that the Declaration would have no legal or policy implications, it is simply to nudge North Korea to resume negotiations. Korean and American critics of the proposal say that it could pave the way for North Korea or China to urge an end to joint military exercises or even a withdrawal of U.S. forces from the Peninsula.  If peace has been achieved, why would they need to remain? For its part, North Korea has said that it would require concrete concessions for it to agree to an End of War Declaration. Pyongyang is demanding an end to ‘hostile policies,’ not an adjustment to the status of the Armistice.

Mark Tokola is Vice President at the Korea Economic Institute of America, Kyle Ferrier is Fellow and Director of Academic Affairs, Sang Kim is the Director of Public Affairs and Intern Coordinator, Mai Anna Pressley is Office Manager, Hae Kyung Ahn is Senior Advisor, Yong Kwon is the Director of Communications, and Troy Stangarone is Senior Director and Fellow. The views expressed here are the authors’ alone.

Photo from Meryl Ko’s photostream on flickr Creative Commons.

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