Korea's degree of dependence upon foreign trade is up to 98%, which ranks the most among the G20 countries. High degree of dependency does not necessarily mean a drawback, but it increases vulnerability to external economic shocks. In order to rectify...
Korea's degree of dependence upon foreign trade is up to 98%, which ranks the most among the G20 countries. High degree of dependency does not necessarily mean a drawback, but it increases vulnerability to external economic shocks. In order to rectify this high degree of dependency, the best solution is to switch the GDP policy to a GNP growth policy. In this new policy, Korea needs to find a strategic economic partner and seek an economic co-operation.
The world economy in the WTO system is based on limitless competition. As a result, economic integration has been promoted among regions, continents, and moreover among religious affiliations. This form of economic blocs raise the barrier against the non-members, which pushes Korea to find a detour. In order to counter this crises, Korea has accelerated on seeking an alternatives such as promoting Foreign Direct Investment(FDI), spurring the development of new technology, and securing new markets. After a careful examination, Indonesia has been selected as our main target for cooperation, who is the leader of ASEAN and the center for Islam culture and economics in Asia. Malaysia has a great growth potential as a center and hub for transportation and distribution, and Korea can benefit from the abundant resources and low labor costs of Malaysia.
Results of SWOT analysis show that the goal of Malaysia, which carries the banner of "Vision 2020," is to reach GDP per capita of fifteen thousand dollars through various processes; Green Industry, Enlarging the knowledge-based infrastructure, Development of Technology, and Development of Finances.
The Vision 2020 plan of Malaysia provides Korea with a great advantage and competitiveness over other countries. This is because Korea has a deep knowledge and experience on building knowledge-based infrastructure and a higher value-added business. Korea also have a high level of education and human resources as well as high-technology level in manufacturing area. Korea's metalwares, machinery, equipments, electronics, car industries have a great degree of competitiveness.
If Korea can transfer the experiences and technologies to Malaysia, it will be beneficial for the Malaysian government in prosecuting industry diversification from labor-intensive industry and natural resource based industry; and as a result, the outcome of economic cooperation will be a great success for both countries.
We can take an advantage of the excellent transportation and distribution infrastructure of Malaysian ports. Since our economy highly depends on exports and trade, retaining an outpost in the region can improve our trade effectiveness. This not only means that we are advancing to the Malaysian market, but also means that we can use Malaysia as a bridgehead for advancing into the southern Asian markets and also into the Islamic countries in the region. If we can build a positive connection with the Malaysian counterparts, who have a great influence in the area like ASEAN, and also in the Asian Islam affiliations, it will help us to advance further into the area.
But in order to utilize these opportunities, Korea needs to overcome the fact that Malaysia is one of the big centers for Islamic culture. Malaysia does guarantee freedom of religion, but Islam rules over the society and economic systems of Malaysia. 12% of the total financial assets are Islamic, and the government is planing to promote the rate up to 20%. And the finance and communication industries, which are the two main driving forces of Malaysia economic growth, have a monopoly structure.
This means that the companies who are planning to make business in this country ought to understand and also promote cultural exchange with the local people and companies. They would also have to learn the mechanisms of Islamic finances, and also enhance the relationship between the Islamic groups who control the grounds of these specific industries.
In addition, supporting the future industry of Malaysia is another desirable solution. One of the starting point could be concentrating on the energy issue, for example nuclear power or new regeneration energy areas. We can provide the technological support and also training opportunities in these areas.
This concludes that the cardinal direction for promoting economic cooperation with Malaysia is to comprehensively support the three main economic development strategy of Malaysian government : promoting Green Industry, knowledge-based infrastructure and Technology.
Our strong points, such as great knowledge and experience in IT and high-technology industries, and also a friendly attitude towards their culture and people will help us to promote economic cooperations between the two countries. Moreover, the support of our government in advancing to these markets will further enhance the possibility of our success in building a mutual confidence. The Korean government should devise a program that can promote our country images. This can be achieved by providing educational support, such as building education facilities or making educational contents. It can also promote the image through providing student exchange programs as well as scholar interchanges.
Only a sufficient and precise understanding of the Malaysian market as well as the people can minimize the adverse effects and lower the possibilities of misunderstandings. We also have to consider that we could have to modify various laws and regulations in order to meet the needs of the both sides and come into a successful negotiations. And we must remember that cooperation can only be reached by sincere efforts and thorough research and examinations.