EFN Asia 38: Report on Globalization and Inequality, Jeju Forum 2014

This is the Rapporteur's Report for the panel discussion sponsored by Economic Freedom Network (EFN) Asia last May 29, 2014, at the Jeju Forum for Peace and Prosperity, Haevichi Hotel & Resort, Jeju island, S. Korea. Thanks to Pett Jurapaiboon, EFN Asia Regional Program Officer, for sharing this with me.

I am adding photos from the FNF East and Southeast Asia fb page. In this photo, from left: Peter, Sethaput, Dep. Minister Dang, Choi.

Name of Session	Globalization and Inequality	Session Number	p46
Time	15:40–17:00	Room	5-F

Moderator: Prof. Dr. Stella Quimbo, Professor, University of the Philippines

Presenter: H.E. Dang Huy Dong, Deputy Minister, Ministry of Planning and Investment, Vietnam

Discussants:

1. Prof. Dr. Choi Byung Il, Ewha Womans University, Korea,

2. Dr. Sethaput Suthiwat-Narueput, Executive Chairman, Thailand Future Foundation,

3. Peter Wong, Executive Director, The Lion Rock Institute, Hong Kong

Keywords:

Robin Hood Tax (Take it from the haves, transfer it to the have-nots), income of labor vs. income of capital,   Doha Round, high-tax countries such as the Scandinavian ones, difference between inequality and poverty, welfare society, inequality of justice and of opportunity, sense of fairness, tradable and non-tradable sectors, “To big to fail”, inclusivity, Good governance, transparency, Piketty-Phenomenon

Opening remarks by Dr. Rainer Adam (RA), Regional Director of the Friedrich Naumann Foundation for Freedom, Bangkok:

According to RA the fundamental value of liberalism is freedom. He criticizes Thomas Piketty whose suggestion of a global tax on wealth to solve the problems of inequality (i.) he calls a “Robin Hood tax”.

Congratulatory speech by Rolf Mafael (RM), German Ambassador to the ROK:

Amb. RM points out that the session’s topic has two dimensions: a domestic one and an international one. He refers to a recently published study of the German Bertelsmann Foundation on i.. His suggestion to reduce it: to promote the integration of more countries in the global economy by completing the Doha Round.

- Name of Presenter: Dang Huy Dong (DHD)

- Synopsis: Globalization (g.) is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. There are many reasons for economic inequality within societies: of bad schools, single motherhood, "de-industrialisation", bad behavior by poor young men etc. G. however can decrease inequality. Having joined the global labor force, hundreds of millions of people in developing countries have won the chance to escape squalor and poverty. Regarding this, Southeast and East-Asia as a region which has benefited tremendously from g., should play a much stronger advocacy role for freer market and more g.

- Name of 1^st Discussant: Choi Byung Il (CBI)

- Synopsis: The absolute number of the world’s poor has stopped rising since 1950s and has fallen in recent decades, thanks to the rapid growth in emerging economies, most notably China and India. People climbed their social ladders from the poor to the middle class, and to the rich. This process continued to work its way, and helped to diminish inequality in a national economy. CBI reminds not to mistake inequality for poverty. Moreover he emphasizes that the aim of a society can’t be equality. Politics should now design a financial system to ensure that an economy does not become hostage to the big financial institution. As witnessed in the 2008 crisis, ‘privatization of success, and socialization of failure’ is against market principle.

- Name of Discussant: Sethaput Suthiwat-Narueput (SSN)

- Synopsis: There is no better argument that g. is beneficial than to compare South- with North-Korea. I. has often little or nothing to do with g.. Differences in income stem largely from things like access to quality education. An even bigger problem than the i. of income is the one of justice. In Southeast Asia for example, wealth has tended to be concentrated in non-tradable or highly regulated sectors. By opening up these sectors to greater competition, g. could help create a more level playing field. The best instruments to reduce i.: the fight against corruption, the liberalization of the market and the strengthening of the rule of law.

- Name of Discussant: Peter Wong (PW)

- Synopsis: There have often been attempts to eliminate inequality, for example the extreme form of egalitarianism in Mao’s China. All failed while the world over the past 60 years has seen inequality declining. A hot topic of the discussion on g. are the low skilled workers. How to protect them -who already have enjoyed basics like uninterrupted electricity supply, clean water, shelters, more than adequate protein intake- in the developed world? Is it justifiable and moral to reverse globalization such that the end result is sending back little girls in Indian, for instance, from factories back to brothels? In general: The Scandinavian system of social welfare often serves as a role model. But according to PW Asian countries can’t adapt than.

- Q1 (Name of Questioner): How could the respective countries of the speakers make the best use out of the g.? (Stella Quimbo, SQ. The question goes to the whole panel.)

- A1 (Name):

According to CBI the ROK has a very restricted labor market. Conflicts between management and trade unions are the normal case. Moreover the outgoing investment is bigger than the incoming. G. has been accepted as the engine of the economic success for a long time. That feeling is coming to an end.

DHD stresses that the government must ensure that people have access to opportunities. The keyword is inclusivity which for him is a precondition to avoid inequality. Other keywords are Good governance and transparency.

For SSN the crucial point is the access to education. Moreover he deplores that the financial situation of Thailand’s MPs is much better than the one of the people they represent.

PW claims to reduce the number of market regulations effected by the state.

- Q2 (Name of Questioner): Your comments on Thomas Pikatty’s demand for a global tax on wealth? (SQ)

- A2 (Name): Too complicate! (DHD) A stupid idea! (SSN) Already his diagnosis is wrong! (PW)

Rapporteur           Dr. Lars-André Richter   
   

Affiliation/Title      Friedrich Naumann Foundation for Freedom,

Resident Representative

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Peter Wong, in one of the official dinners at the Forum. Former Australia PM Julia Gillard joined them in the table.

See also: 
EFN Asia 22: Dealing with Economic Nationalism, Jeju Forum, June 03, 2013 

EFN Asia 34: Chatib Basri on Subsidy and Protectionism for the Poor, January 25, 2014 
EFN Asia 35: Rainer Adam and Economic Freedom in Asia, March 11, 2014

EFN Asia 36: Pett J and Secretariat Work, April 25, 2014
EFN Asia 37: Jeju Forum 2014, On Globalization and Inequality, May 29, 2014

Globalization, Mobility and Inequality, February 18, 2014

EFN Asia 23: More Photos at Jeju Forum

Our panel, the EFN Asia and FNF panel, during the recently concluded Jeju Forum for Peace and Prosperity, May 29-31, 2013, was held in the afternoon of Day 2, May 30. While some panels have mostly if not entirely Korean speakers and facilitator, our panel has speakers and moderator from six countries. Two from Malaysia, Wan Saiful Wan Jan (moderator) of IDEAS and Tricia Yeoh of Institute Rakyat, two from China, Feng Xingyuan and Liu Junning, main speaker from Cambodia, Sam Rainsy. Other discussants were from Vietnam, Pham Chi Lan; from India, Barun Mitra of Liberty Institute, and Choi Byung-Il from S. Korea. I was the Rapporteur, that's seven countries represented.

The audience was big, mostly Korean university students, then other Korean and international participants.

The Resident Representative of the Friedrich Naumann Foundation for Freedom (FNF) in Korea, Lars Andre Richter, a German, gave a brief opening remarks -- that's eight countries already in our panel, really an international panel. Lars introduced what the FNF and EFN Asia are, their activities to promote freedom and liberty around the world, especially in Asia.

The group photo after the panel. German Ambassador to Korea, Rolf Mafael, gave the closing remarks. In the photo below, he is 5th from left. He was supposed to give a short closing remarks, perhaps 1 or 2 minutes, but he enjoyed listening to the panel and spoke for about five minutes. The audience like his talk because he gave a European, specifically German, perspective on the subject of economic nationalism. See my Rapporteur's Report about the panel.

On our first night at the forum, May 29, we were the last group to leave the dinner table. Before finally leaving the grand ballroom, we had a group photo, below. We were 13 people who travelled from Seoul that afternoon, including two staff of FNF Korea, Sungeun Lim and Ms. Kim, and Pett Jurapaiboon, the Reginal Program Officer of EFN Asia, based in Bangkok. In this photo below, only Sam Rainsy was absent because he went ahead.

On the second night, another dinner at the grand ballroom. The Jeju Forum organizers showed the EFN Asia video on the stage several times, wow. Barun Mitra and Pett Jurapaiboon with me, the EFN video on our background as it was being shown.

The third and farewell dinner, May 31. This was taken by one of the young staff of the Forum, Ms. Summer Kim.

The previous day, Ms. Kim and her two other fellow young staff interviewed me. They have read my previous articles about the Forum, weeks before we attended the event and they said they liked it. They asked me how I came to participate in the forum, I said it was EFN Asia and FNF which brought us to the event. They also asked if I have any comment how the event was organized, I said that everything was running smoothly, I have zero complaint, they and the Forum organizers are very efficient. Ms. Kim also sent this photo, minutes before the video interview.

Once again, thanks to EFN Asia and the FNF for hosting that panel and for bringing me and other panel participants to Seoul and Jeju. It was a great learning experience, as usual.

See also my four other articles about our activities in Korea last week:

Chung ho Kim, Freedom Factory Ltd., May 28, 2013

EFN Asia 20: Liberals Meet Liberals in Seoul, May 29, 2013 

EFN Asia 21: On Think Tank Independence, Jeju Forum, May 31, 2013 

EFN Asia 22: Dealing with Economic Nationalism, Jeju Forum, June 03, 2013

EFN Asia 21: On Think Tank Independence, Jeju Forum

Jeju -- Today is our third day here in the Jeju Forum for Peace and Prosperity held in this big and sprawling Haevichi Hotel&Resort, southern island of South Korea. I am one of the 13 people from the EFN Asia and FNF Korea team who came here from Seoul last Wednesday, led by Lars Andre Richter, the Country Representative of FNF Korea (5th from left), and Pett Jurapaiboon of EFN Asia (4th from right). Our group photo on our first night here. Only Sam Rainsy from Cambodia not present here.

On Day 1 (May 29) afternoon, I attended session [2-A], "Making Ideas Work: Challenges and Opportunities for Think Tanks in Asia".

The moderator was LEE, Chung Hee, Professor, Hankuk University of Foreign Studies, and the Presenter was YI, Seong-Woo, Researcher, Jeju Peace Institute. 

The four discussants were:

KANG, Kyung-Tae, Professor, Silla University, S. Korea
Kawaguchi, Shuji, Researcher, Mitsubishi Research Institute (MRI), Japan
WANG, Yao, General Director, Boao Forum, China
Michael YEOH, Manager, Asia Strategy & Leadership Institute.Research Center (ASLI), Malaysia

Dr. Yi mentioned at the start that the University of Pennsylvania's Think Tanks and Civil Society Program (TTCSP) has listed two Japanese and three Chinese institutions in the world’s 50 best think tanks, and none from Korea. So the Koreans are wondering how to strengthen the competitiveness of their think tanks. 

Among the factors identified to attain this is autonomy of think tanks from big businesses and government funding, consistent research topics and direction and strengthen specialization, balance relevance, influence and independence, and involve civil society.

Among the slides he showed, is on Missions of Universities (knowledge production and consumption, teaching) and Institutes (knowledge production and consumption, advising). Their shared mission is Research.

Mr. Kang said that the Samsung Economic Research Institute (SERI) is perhaps the best think tank in Korea, with wide range of research areas from engineering to economics, especially after the 1997 financial crisis, it expanded its research work beyond science and engineering. But SERI is for Samsung mainly, not for the entire country. 

The Korea Development Institute (KDI) was powerful in the 80s but not so now.

Mr. Kawaguchi said that their think tank also has varied research areas but the bulk is on engineering, 58 percent of total resources devoted to various engineering R&D, then 20 percent for basic science, 11 percent economics, and 5 percent each on law and politics, and sociology. I was wondering why Mitsubishi would be interested in sociology, perhaps to help them understand consumer behavior in other countries and cultures.

He added that think tanks in Japan, started in 1970s. The bureaucracy drove Japan's growth after WW2 as the bureaucrats made more initiatives than the politicians. Among the other influential Japanese think tanks he mentioned are the Japan Institute of International Affairs, Institute for International Policy Studies, International House of Japan, Research Institute for Peace and Security, and Japan Center for International Exchange.

He also noted that in the US model of think tanks, they are mostly privately funded, independent from government. In developing countries though, they are mostly supported or funded by governments.

Mr. Yeoh of ASLI in Malysia said that those think tanks that have clear strategic vision are more successful. They have active engagement with many sectors, public, private and civil society. They have good communications strategy in mainstream and social media. And have good monitoring and feedback mechanism to trace their effectiveness.

In addition, successful independent think tanks focus more on applied research, leave basic research to universities. They are able to maintain their independence by getting funding from different and diverse sources. In particular, they should not get any funding from government.

Among the specialized areas that think tanks should deal and do more research are on regional and trade integration, environmental studies, CC, inclusive growth, disease control, etc.

There was a short open forum after the discussants have spoken. I was the last to make a comment/question from the audience as time was running out. I said that governments now are the main creators of economic uncertainties and instability, like what is happening in Europe, the US fiscal cliff, Japan, etc. Their huge and rising public debt is the main generator of such instability. Government think tanks including the multilaterals like the WB, IMF, ADB, are the rah-rah boys of more spending, with recent magic words like "inclusive growth" and fighting inequality, on top of fighting climate change. 

Thus, think tanks should be more independent from government, and check further expansion of government spending and roles.
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See also: 

EFN Asia 18: Jeju Forum's Economic Panels, April 19, 2013 

Business 360 7: Jeju Forum for Peace, May 10, 2013 

EFN Asia 19: Chatib Basri as New Finance Minister of Indonesia, May 21, 2013 

Chung ho Kim, Freedom Factory Ltd., May 28, 2013

EFN Asia 20: Liberals Meet Liberals in Seoul, May 29, 2013

EFN Asia 20: Liberals Meet Liberals in Seoul

Here now in Jeju, S. Korea. Below is my article written when we were still in Seoul this morning, posted today in the EFN Asia website.
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Seoul -- Liberalism is a political ideology that advocates liberating the individual from excessive and unnecessary coercion. Such coercion includes over-regulation and taxation of individuals and private enterprises, or prohibiting people where and to whom they can freely trade their goods and services. People who subscribe to this ideology are called liberals in Europe and Asia. In the US, the term was hijacked to mean the opposite, the lovers of more state coercion. So they are called libertarians in the US.

So liberalism is a great ideology. And liberals and libertarians are generally great people for giving prominence to individual freedom, individual responsibility, free market, free trade, tolerance of diversity, and rule of law.

Last night was a great evening billed “Liberals meet Liberals” organized by the Friedrich Naumann Foundation for Freedom (FNF) Korea. It was held at Koreana Hotel in the heart of the capital city of South Korea. A small but intimate gathering of participants from China, India, Germany, Korea, Malaysia, Philippines, Thailand, and Vietnam.

Dr. Lars Andre Richter, the Resident Representative of FNF Korea gave an inspiring introduction of the work being done by his office to promote freedom. Then Minister and Head of Mission, German Embassy in Korea, Johannes Regenbrecht, gave a short talk that the German government is supporting initiatives to promote freedom and democracy worldwide. Jaykun Yoo, CEO of Christian Global Network TV also gave a short talk on the value of promoting liberal ideas to the public.

Pett Jarupaiboon, Regional Program Officer of Economic Freedom Network (EFN) Asia, gave an introduction of EFN Asia and what it is doing. He showed a video about the network, produced by Asia Freedom TV and the network, wow.

The main talk was given by Dr. Chung-ho Kim, Professor of Economics at Yonsei University in Seoul. He used to be the President of the Center for Free Enterprise (CFE) and is now putting up a new free market think tank, the Freedom Factory Ltd. See an earlier article about him here.

Dr. Kim’s lecture was entitled “The Challenge for Liberals in Korea” and he gave a short rap before his talk, to the delight of the audience. No wonder he is called the “Freedom Rapper” with several short videos in youtube.

The big challenge for liberals and libertarians in Korea is that many people have accepted the strong state intervention philosophy, even among intellectuals and academics. The usual lectures do not appeal much even to the young people. So what they did, they produced several youtube clips about freedom and liberty, in rap music with dance component. This has attracted the attention of many people in Korea, especially among the youth.

He showed that before, there were only about three of them in Seoul promoting libertarianism. This has changed now as thousands of people, the young and university students in particular, are now are attending his lectures about liberalism and the libertarian philosophy. So there is hope.

A few weeks ago, he announced in facebook and other social media that he is inviting investors from the public to put up a new independent and free market think tank, the Freedom Factory Ltd. As of last night, he has received emails from 150 people, many he does not know personally, expressing support to invest. Their combined pledge has topped $70,000 already and more should come.

Dr. Kim is introducing new schemes in putting up and funding a free market think tank. And he is spreading the philosophy to more and more people. The open forum that followed was very lively, that the event moderator, Tricia Yeoh of Rakyat Institut in Malaysia, has to stopped more questions as dinner was becoming late.

Lars Andre gave a toast to freedom before dinner was served. And over dinner, discussions continued in each table. Food was nice.

When liberals meet liberals, they naturally share ideas and stories how to further promote freedom and liberty. There is always hope, there are always new ways and schemes, to advance the philosophy of liberalism.

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See also:
EFN Asia 16: Participation in Jeju Forum for Peace 2013, March 19, 2013 

EFN Asia 17: Zubair Malik as President of FPCCI, April 05, 2013 

EFN Asia 18: Jeju Forum's Economic Panels, April 19, 2013 

EFN Asia 19: Chatib Basri as New Finance Minister of Indonesia, May 21, 2013 

Chung ho Kim, Freedom Factory Ltd., May 28, 2013