The Global Financial Crisis had a catastrophic effect on Central Asian economies, which had been growing rapidly up to that point. The economic growth rate in Kazakhstan was over 10% annually from 2001 to 2007, but nose-dived to 3.2% in 2008, and the country would record minus growth in 2009. The sharp recession of the economies of Central Asian countries caused by the global financial crisis was the result of Central Asian countries having weak economic structures that were vulnerable to the external factors. Central Asian countries made an effort to transform their Soviet-style, centrally-planned economies to market economies starting in 1991, but had experienced difficulties in the rest of the 90s. Their economies began growing actively from early 2000s, yet it was growth driven by heavy dependence on natural resources such as petroleum, gas, nonferrous metals, and raw cotton. The exports of natural resources depends upon the world economic situation, and the lack of the demand for the natural resources following the crisis had a destructive impact on Central Asian economies, as the Crisis caused a drastic contraction of the world economy, which greatly reduced the demand for natural resources. In order to overcome the Global Financial Crisis, Central Asian countries are focusing on economic recovery and the stimulation of exports not through increasing investment in natural resources for a short-term strategy, but make an effort to build a sustainable system for economic development. A 'sustainable' development strategy for Central Asian countries means that they want to improve the structure of their economies, that are overly reliant upon exports of natural resources. This new development strategy following the Global Financial Crisis is rapidly changing the trading and investment environment in Central Asia. The purpose of this book is the study of the strategic approach to the rapidly-changing trading and investment environments of Central Asian countries. Chapter 2 analyzes the impact of the Global Financial Crisis on Central Asian countries, the possibility of their economic growth, and their new development strategy. Chapter 3, 4 are concerned with the study of the investment environment from the perspective of finance and logistics, and the search for investment strategies. Chapter 5, 6 looks at market opening strategies for Kazakhstan and Uzbekistan, the two representative Central Asian countries. Chapter 7 studies various cases of Korean investments, and Chapter 8 searches for possible strategies and new approaches for trade and investment to Central Asian countries after the Global Financial Crisis. New strategies for Korea's advance into Central Asia are as follows: First, the package strategy for natural resources has to be strengthened. These strategies are especially applicable to Central Asian countries, which have weak SOC infrastructure and manufacturing industry. As for details of the strategy, the exchange of the plant and natural resources would be very effective. Korea already signed contracts for the exploitation of the Surgil gas field and construction of the oil and gas complexes in Uzbekistan. And the contract for the construction project of the Balkhash Power Station in Kazakhstan can be considered part of a package strategy. Furthermore, neighboring countries like Azerbaijan and Turkmenistan are placing orders for plants in spite of the Global Financial Crisis, which makes application of the Korean model for 'exchange of natural resources and plant' that much more hopeful. Second, the Korea Investment Fund for Korean companies intending to enter the Central Asia market must be created. 'Natural Resources-Plants package model' needs a great amount of money for the development of natural resources and construction of plants. Therefore we need to devise a plan for suppling the money for the project. Third, there is a need to expand actively into logistic and financial markets, which have existed as obstacles for the investment of Korea. Central Asia's financial market is premature, but has a highly-rated growth potential. Korean financial agencies are already achieving notable successes in Central Asia thanks to advanced financial technologies, risk management, and by securing customer confidence. The Korea Development Bank in Uzbekistan and Kookmin Bank in Kazakhstan adapted successfully to local markets and are ready to move forward to a new stage. Other commercial banks are advised to follow suit and invest actively in the Central Asian market. Fourth, the Korean government should take aggressive measures, to show that official attention is being given to the service market concerning the business environment in Central Asian countries. Kazakhstan is currently a member of a customs union formed with Russia and Belarus, and is also trying to get the membership for WTO. It is necessary for Korea to occupy advance positions ahead of the competition in service sectors such as IT, finance, medicine and transportation. In order to achieve this goal, it is desirable that Korea take the initiative in agreeing to a CEPA with Kazakhstan and Uzbekistan which already have formed strategic partnerships with Korea. To enhance cooperation in trade with Central Asian countries, there is a need to strengthen investment and cooperation in the Special Economic Zones. In particular, Korea's participation in 'Navoi FIEZ' is highly recommended, which Uzbekistan is driving forward at the government level. Korea needs access not simply through strategies on all the various possible industries, but through strategy focused on competitive high technologies, asking the Uzbek government for market-friendly investment atmosphere in currency exchange and customs service. Fifth, elements of soft power such as experience in economic development and the Korean Wave should be enhanced. Korea is regarded as one of the role models to Central Asian countries and they consider Korea to be an ideal partner that is not politically imposing. Moreover, to strengthen cooperation in the private sector, the Korean government needs to encourage introduction of various development models in a diverse field that includes economy, medicine, education, culture, etc. Sixth, Korea should take the initiative in Green Growth. Despite their huge endowments of natural resources, Central Asia suffers from desertification and shortage of water caused by the global warming. Once Korea is able to show its capabilities in reforestation, desalination and green energy recycling, Koreans will be able to secure support from the locals and find new potential for economic growth. Seventh, Korea should also look towards countries like Turkmenistan and Azerbaijan as areas holding future promise, aside from Kazakhstan and Uzbekistan where her investment has hitherto been centered. In Turkmenistan, there is much room to take advantage of its resources and Korean participation in plant export and construction is greatly anticipated. Since Azerbaijan has already accepted Korea's know-how in IT and New Town Construction, the Korean government should sustain a more aggressive strategy. In addition, the Korean government must support medium-size and small companies in expanding into Kyrgizstan and Tajikistan through overseas assistance and KSP. Lastly, Korea has to enlarge exchange of human resources with Central Asian countries. The ethnic Koreans living in that area will be especially very helpful in establishing the Korean Entrepreneur Network to gain reliable information and to help companies obtain localization. Sustainable and stable relationship with Central Asia is possible when the relations are developed in all social and cultural fields beyond simple economic cooperation. Since Korean and Central Asia share much in terms of common cultural and ethnic heritage because of their common Altaic roots, it is easier for Korea to expand exchange in cultural, social, and human resources with those countries. This will make for a more reliable relationship and help establish more successful economic relations.

Korea imports most of its energy resources from the Middle East. In particular, the region supplies Korea with 80 percent of its oil. Yet, this region is unstable due to various political, territorial, and religious issues. Under these circumstances, the Korean government perceives the need to diversify its sources of energy resources and is attempting to secure these resources in regions such as Central Asia, Russia, Latin America, and Africa. The Central Asian region contains abundant natural resources. In particular, four countries in the region; namely, Kazakhstan, Uzbekistan, Turkmenistan, and Azerbaijan possess large amount of oil and gas. The Korean government and corporations have sought to secure these resources. But these efforts were not so successful compared with those by other countries such as Russia, China, the United States, and Europe. This does not necessarily mean that prospects for Korea are bleak. The country only recently began to invest in Central Asia's oil and gas industry. Therefore, if Seoul conceives an appropriate long-term strategy followed by consistent implementation, there is much likelihood of success in this region. To improve this chance, Korea needs to fully understand Central Asia's present conditions such as its energy resources, its transportation routes, tax systems, and investment environments. This report suggests several policy guidelines for improving Korea's chances of success in the Central Asia region. First, Korea needs to promote political ties with Central Asian countries. To do this, the Korean government must not only employ summit diplomacy, but also maintain regular contacts with officials and opinion leaders from those countries. These contacts should include people in diverse spheres such as energy, academia, and art. Second, the Korean government and corporations need to find out in detail what Central Asian countries want. The Central Asia republics are attempting to draw benchmarks from the Korean developmental model and hope to improve technology in the various industries. Recently, the Korean government began to extend invitations for programs for Central Asian officials and scholars, with the intention of improving their understanding of various Korean development policies. These programs should be greatly expanded. Third, Korea should make good use of opportunities in the area of Central Asian countries' construction and plant (building) industry, as those countries are attempting to develop downstream industry; for example, building oil refineries. In the case of gas-abundant Uzbekistan and Turkmenistan, they want to build petrochemical plants. These represent excellent opportunities for Korean corporations to participate in this region's downstream industry. Fourth, Korea needs to develop a separate strategy for each energy-abundant Central Asian country (Kazakhstan, Uzbekistan, Turkmenistan, and Azerbaijan). The geopolitical situations in the Central Asia region is changing rapidly. While Russia's influence is diminishing, China's influence is increasing and each Central Asian country is becoming more assertive in its foreign policy. Korea should fully understand these developments and take a different approach for each Central Asian country. Fifth, Korea should consider entrance to Central Asian countries' oil and gas industry in collaboration with other states. For example, Korea can participate together with Azerbaijan in other Central Asian countries' energy industry. Moreover, Korea can penetrate this industry in partnership with Russian or Chinese national oil companies. Sixth, Korea should systematically manage information regarding Central Asia. Information collected by various organizations including the government, corporations, and research institutes should be shared and exchanged. In particular, stories of Korean corporations' success or failure in Central Asian countries' oil and gas industry should be disseminated. This is likely to minimize risk associated with investing in those countries.

The recent full-blown global financial crisis, triggered by the bankruptcy of Lehman Brothers, has been called the worst financial crisis since World War II. Since China's financial institutions have been relatively isolated from the global financial system, the initial impact from the global financial crisis were not so severe. Consumption in most developed countries has, however, shrunk in the aftermath of the global financial crisis. As a result, China's export industries suffered from sluggish overseas demand, meaning that the current global economic crisis clearly caused some serious damage to the Chinese economy. Amidst an unprecedented and distressing economic situation, China's policymakers quickly came up with stimulus packages of RMB 4 trillion for two years. This stimulus package effectively boosted the Chinese economy, achieving the target growth rate of 8% in 2009. It means that in the midst of a severe global economic recession, only China was able to achieve meaningful economic growth. On the other hand, the US which was once touted as the world's main growth engine, has stagnated. The unemployment rate has recently hit double digits and the status of dollar has been weakened as trust in the dollar as the key currency has been undermined. In addition, a rising China is becoming one of the world's most influential buyers at the market for oil and other natural resources. With cash flowing from huge foreign exchange reserves, China is in a comfortable position to buy oil and other strategically important resources in the world. The other example of the rise of China can be seen in the automobile industry. China was expected to produce over 13 million vehicles in 2009, becoming the world's largest automobile producer and consumer. In the automobile industry, some Chinese automakers are eager to acquire brands and technologies from foreign firms as the domestic auto industry struggles to produce high-end vehicles and break into markets of developed nations. At this point of time, it seems uncertain what the world's political and economic landscape would look like after the end of the current global economic crisis. It is, however, clearly certain that China would be the only winner in the midst of the current global economic crisis and that China will join the ranks of the great powers in world politics and economy. As illustrated above, the main purpose of these books is to analyze the rise of China and to seek out the various implications for Korea-China relations. All 22 topics were selected in order to elicit detailed strategies for Korea facing various circumstances related to the rise of China. To give some examples, Korean policymakers are recommended to maintain stable relations with China in a consistent and predictable way. Also, it will be critically important to seek a balance between Korea's relations with the US and China in the future. With respect to economic relations, Korea should not be reluctant to explore China's potentially immense domestic market and to expand the exchange between the two countries. However, Korean policymakers must urgently find ways to reverse the current overdependency of the Korean economy upon China. In conclusion, more efforts should be made to improve bilateral relations between Korea and China, politically and economically because China is fast emerging from the status of a regional power to become one of the world's powerhouses.

The recent full-blown global financial crisis, triggered by the bankruptcy of Lehman Brothers, has been called the worst financial crisis since World War II. Since China's financial institutions have been relatively isolated from the global financial system, the initial impact from the global financial crisis were not so severe. Consumption in most developed countries has, however, shrunk in the aftermath of the global financial crisis. As a result, China's export industries suffered from sluggish overseas demand, meaning that the current global economic crisis clearly caused some serious damage to the Chinese economy.
Amidst an unprecedented and distressing economic situation, China's policymakers quickly came up with stimulus packages of RMB 4 trillion for two years. This stimulus package effectively boosted the Chinese economy, achieving the target growth rate of 8% in 2009. It means that in the midst of a severe global economic recession, only China was able to achieve meaningful economic growth.
On the other hand, the US which was once touted as the world's main growth engine, has stagnated. The unemployment rate has recently hit double digits and the status of dollar has been weakened as trust in the dollar as the key currency has been undermined.
In addition, a rising China is becoming one of the world's most influential buyers at the market for oil and other natural resources. With cash flowing from huge foreign exchange reserves, China is in a comfortable position to buy oil and other strategically important resources in the world. The other example of the rise of China can be seen in the automobile industry. China was expected to produce over 13 million vehicles in 2009, becoming the world's largest automobile producer and consumer. In the automobile industry, some Chinese automakers are eager to acquire brands and technologies from foreign firms as the domestic auto industry struggles to produce high-end vehicles and break into markets of developed nations.
At this point of time, it seems uncertain what the world's political and economic landscape would look like after the end of the current global economic crisis. It is, however, clearly certain that China would be the only winner in the midst of the current global economic crisis and that China will join the ranks of the great powers in world politics and economy.
As illustrated above, the main purpose of these books is to analyze the rise of China and to seek out the various implications for Korea-China relations. All 22 topics were selected in order to elicit detailed strategies for Korea facing various circumstances related to the rise of China.
To give some examples, Korean policymakers are recommended to maintain stable relations with China in a consistent and predictable way. Also, it will be critically important to seek a balance between Korea's relations with the US and China in the future. With respect to economic relations, Korea should not be reluctant to explore China's potentially immense domestic market and to expand the exchange between the two countries. However, Korean policymakers must urgently find ways to reverse the current overdependency of the Korean economy upon China.
In conclusion, more efforts should be made to improve bilateral relations between Korea and China, politically and economically because China is fast emerging from the status of a regional power to become one of the world's powerhouses.

The recent full-blown global financial crisis, triggered by the bankruptcy of Lehman Brothers, has been called the worst financial crisis since World War II. Since China's financial institutions have been relatively isolated from the global financial system, the initial impact from the global financial crisis were not so severe. Consumption in most developed countries has, however, shrunk in the aftermath of the global financial crisis. As a result, China's export industries suffered from sluggish overseas demand, meaning that the current global economic crisis clearly caused some serious damage to the Chinese economy.
Amidst an unprecedented and distressing economic situation, China's policymakers quickly came up with stimulus packages of RMB 4 trillion for two years. This stimulus package effectively boosted the Chinese economy, achieving the target growth rate of 8% in 2009. It means that in the midst of a severe global economic recession, only China was able to achieve meaningful economic growth.
On the other hand, the US which was once touted as the world's main growth engine, has stagnated. The unemployment rate has recently hit double digits and the status of dollar has been weakened as trust in the dollar as the key currency has been undermined.
In addition, a rising China is becoming one of the world's most influential buyers at the market for oil and other natural resources. With cash flowing from huge foreign exchange reserves, China is in a comfortable position to buy oil and other strategically important resources in the world. The other example of the rise of China can be seen in the automobile industry. China was expected to produce over 13 million vehicles in 2009, becoming the world's largest automobile producer and consumer. In the automobile industry, some Chinese automakers are eager to acquire brands and technologies from foreign firms as the domestic auto industry struggles to produce high-end vehicles and break into markets of developed nations.
At this point of time, it seems uncertain what the world's political and economic landscape would look like after the end of the current global economic crisis. It is, however, clearly certain that China would be the only winner in the midst of the current global economic crisis and that China will join the ranks of the great powers in world politics and economy.
As illustrated above, the main purpose of these books is to analyze the rise of China and to seek out the various implications for Korea-China relations. All 22 topics were selected in order to elicit detailed strategies for Korea facing various circumstances related to the rise of China.
To give some examples, Korean policymakers are recommended to maintain stable relations with China in a consistent and predictable way. Also, it will be critically important to seek a balance between Korea's relations with the US and China in the future. With respect to economic relations, Korea should not be reluctant to explore China's potentially immense domestic market and to expand the exchange between the two countries. However, Korean policymakers must urgently find ways to reverse the current overdependency of the Korean economy upon China.
In conclusion, more efforts should be made to improve bilateral relations between Korea and China, politically and economically because China is fast emerging from the status of a regional power to become one of the world's powerhouses.

Acknowledgements

Notes on the Contributors

1 Introduction/Yonghyup Oh

2 Global Imbalances, Twin Crises and the FinancialStability Role of Monetary PolicyHyun-Song Shin
1. Introduction
2. Twin Crises in Emerging Countries
3. Securitization and Global Imbalances
4. Financial System Perspective
5. Policies to Deal with Emerging Country Twin Crises
6. Lessons for Monetary Policy

3 Crisis-Era Protectionism and the G20: Prospect and Retrospect/Simon J. Evenett
1. Introduction
2. The G20, commercial policymaking, and protectionism
3. The resort to protectionism since the first G-20 summit in November 2008
4. The G-20's contribution to “fighting protectionism”: A preliminary assessment
5. Possible commercial policy roles for the G-20 in 2010
6. Concluding remarks

4 Proliferation of FTAs and the WTO/Shujiro Urata
1. Introduction
2. Growing Bilateralism and Regionalism in the World and in East Asia
3. FTAs and Global Trade Liberalization under the WTO
4. Economic Impacts of FTAs
5. Multilateralizing FTAs
6. Concluding Remarks

5 Regulatory Reform after the Crisis: Opportunities and Pitfalls/Thorsten Beck
1. Introduction
2. Restricting or harnessing markets―searching for a new approach
3. Failure resolution schemes―the core of regulatory reform
4. Regulatory reform―the global dimension
5. Concluding remarks

6 Global Crisis and Currency Competition in the Asia-Pacific Region/Seung-Gwan Baek and Yonghyup Oh
1. Introduction
2. Why would Asia-Pacific economies want to internationalize their currencies?
3. Determinants of international currency status
4. Policy implications
5. Concluding remarks

7 Epilogue: What policies for the G-20?

The ongoing financial crisis and global economic downturn is reshaping the global economic and financial architecture represented by the surge of the G-20. This book addresses the core policy agenda for the G-20 process. The G-20 process is launched and the last three meetings, without any enforcement mechanism, have helped identifying the problems such that the economies were induced to coordinate on actions of macroeconomic recovery and minimize egoistic actions. The large scale global liquidity injections during the peak of the crisis and fiscal stimulus packages executed by governments were remarkably well coordinated in timing. Now as the world is recovering from the crisis, early actions of exit strategies are discouraged as the G-20 expresses concerns on the right timing.

This book is an early and timely attempt to provide proposals for policy makers and academia alike what should be considered as important policy agenda for future G-20 forums. The five themes studied in this book tackle some of the most important economic agenda in the fields of trade, macroeconomics and finance.

The contributors of the book analyses the situation leading the crisis and major macroeconomic responses required to overcome the current global economic problems Hyun-Song Shin (Chapter 2) who highlights the causes of the crisis with fresh look and proposes policy responses to deal with global imbalances. Simon J. Evenett (Chapter 3) shows one aspect of the global economic down fall. He shows that protectionist measures have actually increased during the crisis. Thorsten Beck (Chapter 4) addresses financial regulatory reforms, one of the most important agenda of the G-20 process. He highlights the roles and challenges emerging markets could face in international financial reforms. Shujiro Urata (Chapter 5) addresses the issue of free trade, another important issue in the G-20 forum. He warns that the FTAs have protectionist characters. The G-20 system will address mainly global issues, but in so doing the forum must take into account the regional interests, because the member countries will have to deal with both regional and global issues. Seung-Gwan Baek and Yonghyup Oh (Chapter 6) address a regional problem, for which a solution should be found not just by a global cooperation.

The book also includes comments of keynote speakers, discussants, panelists and other participants who expressed their views at the seminar on the G-20 progress organized jointly by the CEPR and the KIEP, in Seoul, on 20 November, 2009. They include Svein Andresen, director-general of Financial Stability Board (FSB) who expressed his wish that the G-20 forum should support FSB's reforms. He also made a remark that a global liquidity standard is part of the works that the FSB is now preparing. SaKong Il, chair of the Korea's G-20 advisory group, stresses that sustainable and balanced economic growth should be a major objective the future G-20 summit forums should address. Richard Portes, president of CEPR, says that the G-20 is the premier forum whose role and responsibility will be very different from the G-7/G-8 meetings. Wook Chae, president of KIEP, emphasizes the importance of outreaching to the non-members. Vitor Gaspar of European Commission shares this view and further stresses the importance of social cohesion as another important economic issue to be addressed in the G-20 process.

This study delineates major contents of the 4th amendment in the modality concerning the agricultural sector, which was the most recently released and proposes directions on how to formulate strategic country schedules based on the results after their evaluation.
Ever since agricultural negotiations were included as a theme of the Doha Development Agenda in 2001, modality negotiations on opening markets and reducing agricultural subsidies have continued for 9 years. Even though DDA negotiations in the agricultural sector have proceeded slowly, most people evaluate that it is now time for a conclusion to be drawn, if major countries are willing to settle politically. As mentioned in previous modality amendments, issues in agriculture have been settled already to a considerable degree. Even though differences between developed and developing countries in the core issues such as reducing agricultural subsidies, number and treatment of sensitive and special products and Special Safeguard Mechanism still remain; the differences have been bridged sufficiently for the negotiation and the 4th modality amendment, which was recently released, and revealed specific figures as single ones for subsidies and tariff reductions.
Each member country is to submit its own country schedule if the modality is settled. Therefore, it is necessary for us to prepare Korea's own country schedule to meet the demand for submission.
First, we need to establish categories with as much detail as possible to secure flexibility in providing agricultural subsidies for products for domestic support in the future. In this case, we have detailed a total of 56 products including 8 grains, 17 vegetables, 7 livestock products, 4 other crops, 9 fruits, 4 forest products, 2 mushrooms, 3 flowering plants and 2 medicinal crops.
In case of establishing product-specific AMS limits, it is the best ① to establish with average performance between 1995 and 2000 for rice, barley, corn and rape and ② to establish with performance for the recent 2 years for soy and malting barley and ③ to establish with 10% of the production amount between 1995 and 2000 for the rest of the products if Korea gains its status as a developed country. Also, it is the most reasonable for product-specific AMS limits to be established with 20% of average production amount between 1995 and 2004 if Korea remains a developing country.
Also, the de minimis may not be decided in advance because it is based on a certain ratio of production amount for each product in the said year. However, there is a need to notify if 5 or 10% of the production amount is used for basic ratio for the de minimis.
In addition, it is desirable to select a Blue Box which does not require production(New Blue Box). It is optimum for products with extremely low AMS limits to be established as Blue Box products and for the rest to be established with AMS products in case of establishing Blue Box limits for products. Particularly, rice should be shifted to the New Blue Box, rather than AMS, to increase flexibility in managing AMS.
Finally, it is necessary for the DDA country schedule to be in harmony with tariff reduction schedules in the contracted FTAs. Most major agricultural and livestock products in Korea may be protected to a substantial degree with sensitive and special products proposed in the 4th modality amendment. However, it may cause inefficient border protection, as well as difficulties in import management in case that the tariff reduction schedules in the contracted FTAs are different from those in the WTO. Therefore, it is desirable for tariff lines with small portion of imports from the contracted FTA counterparts to Korea to be independent of tariff reduction schedules, in accordance with DDA agricultural negotiations. However, it is reasonable for tariff lines accounting for most of imports from contracted FTA counterparts to Korea to coincide with the schedules in the contracted FTAs, rather than making independent tariff reduction schedules to accord with DDA agricultural negotiations.

A precipitous decline in birth rates is presently forcing Korea to seriously consider increasing the number of foreign employees in its economy. However, inflow of low income laborers would delay extinction of marginal firms, which will not only keep the Korean economy from converting to a high value-added form, but also give rise to many social problems.
In order to prevent such an eventuality, it is imperative that foreign manpower coming into the Korean labor market consist mainly of highly-skilled experts and professionals. Nevertheless, the focus of Korea's policy on foreign workers has hitherto been on unskilled workers, while systematic study of expert foreign workers has so far been lacking. This study is based on the idea that active use of expert workers from overseas is necessary to raise the Korean economy to a new level, and that the most effective way of accomplishing that goal is to link the policy of attracting foreign students with similar plans for expert foreign workers.
In this study, we will learn about the present state of foreign workers in Korea and policies on their employment, and those for attracting foreign students. Based on examples from the US and Japan, a search was conducted for methods on how to facilitate attracting foreign students for work as experts in the Korean labor market. To increase the proportion of foreign experts in the Korean labor market, this study suggests a more flexible visa policy and more job fairs for foreign students in order to draw in elite foreign students to the Korean labor market. Because of various limitations, this study should be considered an initial, preliminary research presenting ways on how foreign students can work comfortably as experts in Korean labor market. Therefore, a more systematic and analytical investigation on the issue would be necessary in the future.