Can South Korea save globalization?
Geun Lee sets out a plan for countries to prosper under the threat of pandemic
Employees of Hyundai Card, the credit card company, sit behind protective screens as they eat in the canteen of their Seoul office
Crises of a global scale, such as the oil shock of 1973 and the 2008 financial crisis, trigger reforms that allow countries to respond more effectively if and when the crisis returns.
The first oil shock, which saw crude prices quadruple, changed energy policies, consumption patterns and social structures in energy-scarce countries. The world thereafter was fundamentally different, with countries never returning to the pre-1973 paradigms.
The same can be said of Asian countries after the 1997 Asian financial crisis, and most of the world after the 2008 banking crisis. Shocks force people and governments to reallocate resources and, over time, these changes become the new normal.
The world after the coronavirus will not be the same as before, not least because countries will re-assign resources to building new defences against second and third waves of the pandemic. Public health and medical systems will be strengthened, the expansion of the digital economy to encompass a wider range of activities will accelerate, spacing policies in the public and private sectors will change and privacy may be compromised for the sake of the public good.
In the past, we have always embraced ‘more’ globalization rather than ‘less’ as a solution to crises. The post-coronavirus world, however, could see globalization heading in a different direction. Many pundits argue that globalization will shrink as pandemic risks force a rearrangement of international value chains, bringing the manufacture of goods closer to home.
These predictions sound persuasive, as countries have closed their borders and people have been locked down in their homes. Never in recent memory have such restrictive measures been taken to address a global crisis. International cooperation was always the first line of defence.
Since February 2020, however, international cooperation has been notably absent, except for brief online conversations among the leaders of the G7 and G20 countries.
Physical movement across borders has been widely banned. Public health systems varied too widely from country to country to even attempt policy coordination. Unprepared for a pandemic of this scale, countries found themselves too short of strategic medical materials to think about sharing with others. In fact, the primary behaviour of nations during the coronavirus crisis has been in line with what realist thinkers in the field of international relations have expected of anarchy: prioritizing self-help. For a moment, the global wheel of connectivity stopped spinning.
Globalization has been under attack in recent years, bringing back the spectre of nationalism in many countries, particularly in Europe and the United States.
Britain has left the European Union, and so-called far-right groups have gained increasing influence in many parts of Europe, lamenting job losses and cultural disintegration allegedly caused by globalization. The Trump administration’s slogan of ‘Make America Great Again’ and its efforts to build a wall along the US-Mexican border have also rung a nationalistic alarm bell.
If these sentiments are coupled with fears of a future pandemic originating in the wet markets of Asia or Africa, for example, we may find it difficult to restart globalization. Defences against such diseases would probably rely on lockdown or shutdown policies. Will the coronavirus crisis therefore be a tipping point towards a post-globalization era in which people become hesitant to cross national borders?
Saving globalization
Compared with previous challenges in the era of globalization, the COVID-19 crisis is starkly different. Globalization is about the density and quality of global connectivity. A lethal virus thrives on these very same factors. It finds more hosts by traveling around the world, making the first line of defence against the pandemic to cut off this connectivity. At the time of writing, most countries, including the G7 advanced economies, have been fighting COVID-19 by shutting down their borders and by ordering citizens to comply with lockdowns and self-quarantine procedures. Many factories have stopped operating, restaurants have been closed or reduced to offering takeaway meals, airlines are hardly visible and people cannot go to large-scale cultural or sporting events. Trade routes and global value chains have become fragile, and tourist spots are desolate.
The way out of the pandemic tunnel must, therefore, be to find a containment model that can be applied to an open economy so that countries do not need to shut it down until effective vaccines can be mass produced. Otherwise, the global economy will repeat stop-and-go cycles whenever a new pandemic emerges.
International policy coordination is only possible and viable when such an open and liberal epidemic control model is available to all nations simultaneously. If only a select few can follow this model while others have no choice but to shut down, the global economy will still freeze. To reduce this risk, investors and governments will naturally restructure value chains to bring them closer to home, and factories will increase inventories and stockpiles of strategic materials and commodities. This will lead to losses in efficiency and profits, and an accumulation of inconveniences for consumers.
South Korea’s experience
In a new environment characterized by the threat of pandemics, countries will need two capabilities in order to build a safe place to do business and conduct a normal life.
The first is a capability to contain epidemics through open, transparent and minimally restrictive measures. In other words, a government needs to be able to manage a disease while letting people engage in daily activities with the fewest possible restrictions. To avoid a sudden shutdown of the wider global economy, it is imperative that industrial nations all possess an open control system at the same time.
The second is a country’s resilience to return to normality as fast as possible. Obviously, this has much to do with rapid flattening of the epidemic curve until effective vaccines are introduced. It allows for self- quarantine and social distancing regulations to be loosened quickly. Again, this serves to reduce a nation’s future risks and boost its attractiveness.
In the post-coronavirus world, every nation’s competitiveness and soft power will depend greatly upon these two capabilities. It is not an over-simplification to presume that countries that can achieve this are likely to also be strong democracies with robust welfare systems, information technologies, soft and hard innovations, human resources and public-private partnerships.
It is worth looking at South Korea’s experience in overcoming the COVID-19 crisis. It has been fairly successful in rapidly flattening the curve without adopting a restrictive or suppressive mass-quarantine strategy or issuing a nationwide lockdown or lengthy stay-at-home order.
The South Korean model consists of a few key elements. First, as an affluent country, most of its people can afford a smartphone, and it has a fast digital infrastructure with high penetration rates, and the capability to produce and distribute huge amounts of personal protective equipment such as face masks and disinfectant, a large number of hospitals, well-trained medical personnel, and globally competitive biology and technology companies that can rapidly develop test kits and contact-tracing apps. In addition, South Korean parents’ lavish spending on education has created a society that understands what the government is doing and saying, and knows how to interpret useful information.
Luck also played a part. The country’s experience of a MERS – Middle East Respiratory Syndrome – outbreak from May to July 2015, as well as punitive demotions of high-ranking public health officials at the time for early mishandling of the epidemic (the same public health officials working against COVID-19 today) helped Korea expand its testing capabilities and upgrade overall preparedness.
Secondly, Korea’s strategy combines an open control system with contact-tracing technologies. Here, open refers not only to open national borders, but to open companies, restaurants and homes, excluding spots of confirmed infections. A few companies and restaurants temporarily closed their doors for quarantine and disinfection, and people who contracted the virus or were in close contact with someone who had were made to stay at home until they could be proved to be clear of infection.
An increasing number of people worked from home, and schools and churches moved online. Nonetheless, a majority of South Korea’s private companies, restaurants and public facilities were allowed to remain open on condition people strictly followed government guidelines regarding face masks, social distancing, self-isolation periods and temperature checks. Of course, the economy is well below business-as-usual projections and unemployment is rapidly rising. The International Monetary Fund’s projection for South Korea’s 2020 economic growth rate is -1.2 per cent, down by 3.4 per cent points from the 2.2 per cent projected in February, but still the highest among the 37 OECD countries.
This sort of open control system requires contact-tracing technologies that enable authorities to pinpoint ‘dangerous areas’. If a country lacks this system, and therefore has no clear picture of where the disease has and will spread, a long-term lockdown policy might be the best alternative.
Lastly, the government should be able to legitimately obtain access to, and make use of, personal information. Even if a country possesses all the hardware and technologies required for contact tracing, nothing can be done without this data. To collect this the government must have access to sensitive personal details, such as credit card usage and location information. Obviously, this is the most controversial element of the South Korean model because a heavy hand can result in the government encroaching upon the privacy and human rights of its citizens. What matters, therefore, is citizen consent through democratic processes.
In the case of South Korea, the Infectious Disease Control and Prevention Act was revised after the MERS outbreak in 2015. Article 76-2 of the Act specifies that, if necessary to block the spread of infectious diseases, the Minister of Health and Welfare or the Director of the Korea Centres for Disease Control and Prevention may request that a range of central agencies, local governments and other institutions provide information about patients with diseases, or who are likely to be infected by them, and they must comply. This includes location data. The same article makes clear, however, that no information should be used for any purposes other than controlling infectious diseases, and at all such information should be destroyed once the relevant tasks have been completed.
Of course, having a law or legal justification does not always guarantee privacy, particularly when a country is under crisis. Yet intense discussion of privacy issues in South Korea has continued during the COVID-19 crisis, and the government has been careful not to encroach upon human rights when using location-based information. For example, when new cases of infection were traced to nightclubs popular among the gay community, health authorities tried to respect the sensitivity of this information. The voices of minority groups were clearly heard. Ultimately, it will be the strength of democratic institutions, tradition and culture that will protect the rights of people.
The South Korean model, if it continues to prove successful, provides hope that the world can sustain globalization in the face of pandemics if countries reallocate national resources to build open, technology-centered disease control and prevention systems. The countries that can recover rapidly from a pandemic crisis without oppressive lockdown measures will be able to attract foreign investment and tourists and become hubs of diplomatic activity. If the more advanced economies compete to attain these advantages, the world will stay open and liberal, and globalization will be saved.
To date, the South Korean model has been the only viable approach to holding a democratic national election at the peak of a pandemic. The general election held on April 15 recorded a 66.2 per cent turnout, the highest this century. Voters wore face masks, underwent temperature checks, disinfected their hands before and after voting, wore plastic gloves and abided by social distancing rules. There is no reported case of infection traced to the election, and South Korea’s National Assembly is working normally.
The South Korean model has proved that it can preserve democracy and protect the global economy. If the predominant model relies only on lockdowns or shutdowns, the future of the global economy will be precarious. And if a country relies on an open system that makes very little use of contact tracing, the time required to return to normality after an epidemic will be long, damaging national competitiveness. In the meantime, it is very likely that other countries will rely on closed borders to contain potential spread of disease.
A multilateral grand strategy
We may never go back to the pre-COVID-19 world. Countries may rewind globalization back to its level in the middle of the last century. Global value chains may become shorter and less complex. Nationalist forces may gain increasing political momentum and the European Union may disintegrate further. More conflicts might arise as multilateral institutions and US global leadership fail to bind countries together as tightly as before.
However, prediction is one thing, and creative response another. If we can actively engage in people-to-people exchanges, globalization will bring more prosperity and mutual understanding. Now is the ideal time to think about how we can save globalization through a new global leadership paradigm, rather than idly watching how issues unfold. Perhaps the post-coronavirus era will require a multilateral grand strategy led by a group of countries that can afford an open, liberal pandemic control and prevention system to allow the globalization process to restart.
Globalization will never regain its momentum unless a majority of countries adopt such systems in combination with trace-tracking technologies. Otherwise, when the next pandemic arrives, some countries will stay open while many others close their doors. Those who can afford to develop these systems, therefore, need to form an international coalition, staying open together even during a pandemic by sharing funds, technologies, medical facilities, and know-how, and coordinating different national policies.
Liberal, democratic and high-tech countries may lead the way at first, and should then rapidly invite other countries to join. Initially the members for this grouping may turn out to be medium-sized countries, since some of the larger countries by population size have not distinguished themselves in their response to COVID-19. We can tentatively call this new international coalition the Creative X (it could be C7 or C9 initially, for example), with the membership expanding over time.
This new multilateral grand strategy also requires a new foreign aid policy aimed at the lower-income world. The provision of a pandemic response system will be as important to these countries as economic development. This will require more robust infrastructure, human resources, technology and know-how in relation to pandemic control and prevention.
Otherwise, recurrent epidemics will undermine their development potential. At the same time, ineffective pandemic control and prevention systems in lower-income countries will invite authoritarian or totalitarian responses.
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