Last year we saw significant changes on the Korean Peninsula, especially with the surprise death of Kim Jong-Il and the beginning of succession to Kim Jong-Un. With even more changes expected in 2012, it is important to understand which issues are worth following. In a post last month http://blog.keia.org/2012/01/12-things-on-the-korean-peninsula-to-watch-for-in-2012/, the Korea Economic Institute highlighted these 12 events as the most important issues to watch for in the Korean Peninsula during 2012.
1. The Transition and Public Events in North Korea: Kim Jong-un has been declared the successor to his father. The North Korean government is working hard to illustrate the unity of the nation and the loyalty of the elites to Kim Jong-un. There will likely be a formal meeting of the Workers’ Party of Korea where titles and positions will be made and adjusted.
2. Political Change in South Korea: South Korea will conduct elections for both the National Assembly and the presidency this year. Additionally, in April, all 299 seats of the National Assembly will be up for vote, with 245 in single-member districts and 54 seats determined through proportional representation.
3. Kim Jong-un and China: In the early days of the transition, China has thrown its support behind Kim Jong-un. Who from China visits North Korea, and especially if Kim visits the new leadership in China, will likely provide clues to the relationship between Pyongyang and Beijing, as well as how secure the new regime feels in its position. Given that China will undergo its own leadership transition this year, 2012 will likely set the tone for both sides going forward.
4. The Role of Social Media in South Korean Politics: Social media, including Twitter, are playing an increasingly prominent role in Korean political discourse. This suggests that the conversations that take place on Twitter in 2012 will play a significant variable in this year’s presidential election.
5. The Euro Crisis: Korea is heavily dependent upon trade for growth and with Europe being a major trading partner, the euro zone matters for Korea. If Europe is unable to restore market confidence and avoid a deepening of its debt crisis, a steep economic decline in Europe or the unraveling of the euro could hit the global economy hard. When it comes to Korea, the stats to think about are this, the EU accounted for 10.2 percent of Korea’s exports and 9.6 percent of its total trade through the first 11 months of 2011.
6. U.S. Defense Budget Cuts: The U.S. Department of Defense budget is expected to cut $260 billion over the next five years and more than $450 billion over the next decade. In the new budget strategy announcement on January 5, President Obama and Secretary of Defense Panetta presented a revamped U.S. military strategy with an emphasis on Asia and space and cyber capabilities, and preservation of missions in the Middle East. With a reduced defense budget, partner relationships will become more important. Although the 5% increase in the 2012 South Korean defense budget may offset the potential challenges in the U.S.-Korea military alliance, uncertainties continue as both countries enter an election year.
7. North Korea’s Interaction with the United States and South Korea: North Korea and the United States seemed to be on the verge of a deal over food aid and possibly moving forward on nuclear talks before Kim Jong-il’s death, and there are early indications these may start back up at some point. As for South Korea, Pyongyang has said that it will not deal with the current administration in Seoul, but 2012 will also bring fresh elections for the National Assembly in April and the presidency in December, key points to watch for in North-South relations.
8. Seoul Nuclear Security Summit: Seoul will be hosting the second Nuclear Security Summit in March with participation from over 50 national leaders. The Seoul NSS will elevate Korea as a world security leader. The NSS will be even more significant in light of Kim Jong-il’s death.
9. The Implementation of the KORUS FTA: Now that the United States and Korea have passed the KORUS FTA the two governments are looking to implement the agreement. The agreement should come into force early in the year, but might slip until after National Assembly elections in Korea for political reasons.
10. The Politics Around the KORUS FTA and U.S.-Korea Relations: Prior to the death of Kim Jong-il, the opposition in Korea was turning the FTA into a major campaign issue, calling on Korea to renegotiate certain provisions such as those relating to investor-state dispute settlement. Korea’s relationship with the United States is a complex one, and anti-Americanism has played a role in previous elections. While North Korea is now likely to become the major campaign issue, look for the FTA and Korea’s broader relationship with the United States to remain caught up in domestic politics for the time being.
11. South Korea-China FTA: China has become South Korea’s largest trading partner by a significant margin, with the two countries doing more than $200 billion in trade in the first eleven months of 2011. With the EU and KORUS FTA now concluded, Korea will look to start negotiations with its biggest trading partner in the next few months.
12. World Expo 2012 – Yeosu, Korea:From May to August, Korea will host the 2012 Expo in the port city of Yeosu. Hosting the Expo can be seen as a completion of Korea’s campaign as a world leader – the 2011 G-20 on economic issues, the 2012 Seoul Nuclear Security Summit on security issues, and the 2012 Expo on cultural and soft power issues.
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