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New Year's Greeting
 
"Peace Will Lay the Foundations For Economic Expansion For South Korea," Pres. Moon
"Peace will lay the foundations for economic expansion for South Korea," said President Moon Jae-in. In his New Year's speech on Jan. 2, 2019, at the Korea Federation of SMEs in Seoul, Moon said, "The peace that we have now is a tentative peace. In the new year, I will do my best to make the flow of peace an irreversible wave."
Moon said that once peace and complete denuclearization are achieved, an era in which "peace tows prosperity can be opened." He went on to highlight his plans for establishing a "community of peace and prosperity" that spans across Asia.
"When peace is established the economic design for the Korean Peninsula will be realized, rail network will be linked to Europe, and to the south, a community of peace and prosperity with the ASEAN and India will be established."
While Moon did touch on his admin-istration's push to establish peace with North Korea, the president dedicated much of his New Year's speech to economic issues, and emphasized the need for a new growth model and for innovation.
"We need innovation that creates value, and a new industrial policy that overcomes the limitations of our economic structure," Moon said, saying that South Korea needs to balance exports and domestic consumption.
Adding that South Korea needs a new economic development that leads, instead of following developed countries, and reduces economic polarization, Moon said his administration is seeking to bring about difficult changes.
"It will take time, and controversy is unavoidable. As it is a path never taken before, there will be uncertainties. There will be areas that the government misses, and did not think of. There are also voices of pain that say we must wait for the future. But this path of changing our economy is a path that we must take."
Emphasizing the need for industrial innovation, Moon said the government will execute related plans, including those for establishing 30,000 smart factories, smart industrial complexes and smart cities.
Adding that the country's research and development exceeded KR\20 trillion (US$17.9 billion) for the first time, Moon said the funds will be used to create jobs and support industrial innovation.
Moon also touched upon regulatory reform, saying he will establish an environ-ment that facilitates investment, and that the government will strengthen the social security net for workers.
President Moon was referring to his New Southern Policy and New Northern Policy, which aim to increase South Korea's economic and political relations with countries to the south and southwest, as well as north of the Korean Peninsula.
When President Moon called for "independent" and "balanced" diplomacy, it was an acknowledgement that the country has been swayed by major powers pursuing their own strategic interests on the divided peninsula.
Since Moon took office in May 2017, he has sought to expand Seoul's diplomacy beyond the four regional powers surrounding the Korean Peninsula - the United States, China, Japan and Russia - while maintaining close ties with them.
At the center of his vision is the New Southern Policy aimed at deepening ties with Southeast Asia, as part of Seoul's drive to widen its diplomatic horizons and curb reliance on the neighboring countries in terms of trade and security.
The policy aims to elevate its relations with the Association of Southeast Asian Nations and India to the level Seoul enjoys with its four major partners. The vision stands on the guiding principles of "3P" - building a community of people, prosperity and peace.
Seoul's need to shift its focus toward increasing ties with its Asian neighbors has been highlighted more significantly in recent years. The diplomatic row between Seoul and Beijing over the deployment of a U.S. anti-missile system led China to crack down on South Korean businesses in apparent retaliation. This year's trade war between the United States and China also took a toll on South Korea's export-driven economy.
South Korea's two major trading partners - the United States and China - accounted for 39% of its exports in 2018. Against this backdrop, the New Southern Policy could be a diplomatic tool to expand Seoul's space for diplomatic maneuvering, experts say.
Southeast Asia is South Korea's key partner in promoting peace and stability in the region as the world's two superpowers are increasingly competing to gain influence in the region. The United States pursues the Indo-Pacific strategy, and China pushes for its own One Belt One Road Initiative, with Asian countries feeling increasingly pressured to pick sides.
So far, the economic and people-to-people elements of the New Southern Policy have received relatively more attention, but the initiative is not just about making inroads into new markets and pursuing wider economic cooperation.
In the category of "peace," the policy outlines five tasks, which include seeking to hold more meetings between leaders of South Korea and the Asian countries, strengthening cooperation for peace and prosperity on the Korean Peninsula and broadening military and defense cooperation.
North Korea has traditionally had good relations with ASEAN countries. North Korea has embassies in eight member countries of ASEAN, except for Brunei and the Philippines. The ASEAN Regional Forum, the only security forum North Korea has attended since 2000, has been one of the few multilateral channels for the communist state's engagement with the outside world.
Over the past year, the Moon admin-istration has pushed to achieve denuclear-ization and peace on the Korean Peninsula through a flurry of dialogue with Pyongyang. In the process, Seoul has also strived to secure support from the four major powers, as well as ASEAN and India.
The Moon administration has seen some tangible results in its New Southern Policy drive, with bilateral trade volume rising 7.6% to US$160 billion in the first 10 months of the year from the same period last year. The number of visitors to the other side increased by 10% annually, exceeding 10 million this year.
To promote its New Southern Policy, Moon has visited Indonesia, the Philippines, Vietnam, Singapore and India in 2018, with plans to visit the remaining ASEAN member states in 2019.
"Even statistics show that ASEAN and India are important to us to the extent that our future is up to them," President Moon said at a Cabinet meeting last month. "We can also see the New Southern Policy is very crucial in expanding mutual economic cooperation and diversifying our markets."
Marking the 30th anniversary of Korea's relations with ASEAN, South Korea is set to host a Korea-ASEAN special summit next year, inviting leaders of the 10-member bloc. South Korea will be the first among ASEAN's dialogue partners to host a special summit three times. Japan and China hosted two such summits each, while the US Russia, India and Australia have hosted one each.
The ASEAN bloc, with a population of 630 million, is South Korea's second-largest trading partner, with the two-way trade volume totaling US$149.1 billion in 2017. With ASEAN, South Korea plans to increase two-way volume to US$200 billion and the number of visitors to 15 million by 2020.
India - home to 1.3 billion people - is predicted to become the world's third-largest economic powerhouse by 2024. South Korea seeks to expand their bilateral trade, which is estimated at about US$20 billion, to US$50 billion by 2030.★