by Shelby Grasser
On Tuesday, April 8th, Dr. Il SaKong (MBA ’66, Ph.D. ’69), chairman and CEO of the Institute for Global Economics and the former finance minister of the Republic of Korea, visited UCLA Anderson with his expectations for the direction of the Asian economy. SaKong presented to a full house, focusing on Korea, China, Japan and the global economic phenomenon known as the “pivot to Asia.” Though Asia is encountering numerous challenges, the general trend is upward, and SaKong predicted an even brighter future.
Dr. SaKong reminisced that when he attended UCLA the annual income for Korean families was US $100. Their main exports included fabric, clothing and other rough goods. But over the past few decades, and especially after the Asian economic crisis of 1997, the Korean market has fortified itself by shifting to a knowledge-based economy. Now, any Samsung smart phone, LG electronic device or Hyundai or Kia car comes from South Korea. The economy is capable of weathering a global crisis, but the government hopes to develop policies to increase the lower-than-average female employment percentage.
SaKong also spoke about China’s growth over the past three and a half decades; though, it has substantially decreased since 2011 due to the current credit squeeze. China must establish a solid foundation for sustainable growth, strengthen the value of the RMB, minimize environmental degradation and improve citizens’ quality of life through health care and public education.
Unlike China’s economic prosperity, Japan is currently suffering through a prolonged deflation and SaKong suggested that this might be a result of poor leadership and energy costs from the Fukishima nuclear disaster. Prime Minister Abe has started a new economic agenda known as “Abenomics” (short term policy goals and a long-term sustainability plan) in late 2012, though SaKong is doubtful that substantial change will occur anytime soon under Abe.
Dr. SaKong’s optimistic vision promised a more robust future economy for Asia and their trading partners in the west, as long as the Asian countries practice due diligence and carry out the necessary reforms. It was fascinating to hear firsthand how far these nations, which only a few decades prior were poverty-stricken and war-torn, have come. Asia is now budding as a global leader and an economic powerhouse, and, with good trade and friendship, the United States can increase economically along with Asia. He concluded on a light note, encouraging students that, “The Asian economy will play a continuously important role as it grows faster than the rest of the world. I am optimistic about the future of Asia, so please invest in Asia.”